Monday, November 21st, 2016
According to the economics of the industrial age, it’s simple: Money spent creates output. If you use less labor or your system creates more output, your factory is being more efficient.
Machines can be more productive than people because once they’re set up, they create more output per dollar spent. Lowering labor costs is the goal of the competitive industrialist, because in the short run, cutting wages increases productivity.
This is a race to the bottom, with the goal of cutting costs as low as possible as your competitors work to do the same.
The new high productivity calculation, though, is very different: Decide what you’re going to do next, and then do it. Make good decisions about what’s next and you thrive. Innovation drives the connection economy, not low cost.
The decision about what to do next is even more important than the labor spent executing it. A modern productive worker is someone who does a great job in figuring out what to do next.
Don’t confuse motion and progress. A rocking horse keeps moving but doesn’t make any progress.
Summing-up: Redefine productivity. It’s not about how much you get done, it’s about the impact you’re having.