Exploring Management Buzzwords: Productivity

Exploring Management Buzzwords: Productivity

This is the nineteenth in a series of essays that addresses management topics. The first ten explored "hot button" issues; the next ten explore management "buzzwords." I base these essays on countless provocative lectures and irreverent discussions as a nutty professor of Business Administration.

In an earlier essay I teased by relating the word "productivity" to buzzwords like efficiency, but I postponed explaining it. Here I will catch up on that.

I noted that productivity can be expressed as a formula, Productivity = Output / Input. The outputs and inputs are, respectively, the products and services that are an organization's purpose, and the costs of the resources consumed. In other words the organization can be seen from the systems point of view, where on the whole, resources are transformed into valued products and services.

To say that productivity = outputs / inputs, then, is simplistic. By simplistic I mean simple to the point of losing its day-to-day, practical meaning. In your everyday work life, when you hear discussions about the organization's productivity, do you get an image of a system transformation consuming resources and producing valued outputs? If so, good! If not, that's okay. There are many ways of expressing it in common language and the connection to theory may not be obvious.

When your boss talks to you about it, it usually means that s/he's concerned about production levels, and may not have the denominator anywhere in his/her conscious mind. But I would posit that even then, the supervisor or manager is implicitly holding the denominator constant, as if to say "look folks, considering we only have so much money in our budget this year, we need to squeeze every ounce of service out of that budget that we can." That is exactly the same thing as saying "let's improve our output-to-input ratio, holding inputs constant."