There was a time when the findings and conclusions of the “father of scientific management” Frederick Winslow Taylor (1856–1915) were hotly debated in countries throughout the industrialized world. Taylor set out his views in a book published in 1911 titled The Principles of Scientific Management. Those views not only helped to shape mass production, but also for a long time they exerted extensive influence over the organization of labor in the twentieth century. Taylor’s main concern was always how to boost labor productivity. By using time-and-motion studies, he ascertained the most effective deployment of a worker, while at the same time examining the tools that worker used, which were sometimes subsequently redesigned to help boost efficiency. His suggestion that the labor process be broken down into small steps of set duration entailing precise movements created the conditions required for rationalization and assembly line work.
The successes achieved by applying his findings and their continued development by Henry Ford into so-called Fordism in the auto industry brought Taylor to the notice of many labor practitioners. He was both a pioneer in labor organization and at the same time a radical advocate of a management approach based on enforced methods and checks. According to his “scientific management” (dubbed Taylorism), a production process required no initiative whatsoever on the part of the workers involved. The instructions issued by management were stipulated in almost painful detail and had to be followed to the letter. In other words, people had to go about their work like machines, without thinking.
The worldwide debate about Taylorism ranged from uncritical imitation and great admiration to indignant rejection.
Many entrepreneurs, as well as political leaders like Lenin or Mussolini, believed that in Taylorism they had found the ideal way to boost productivity. Others maintained that what they regarded as an inhumane method merely led to the ruthless exploitation of the work-force. Charlie Chaplin clearly agreed more with the latter, lampooning assembly line work in his movie Modern Times. But when Taylor died in 1915, many companies were busily implementing the measures he had advocated.
Taylor’s convictions can be properly understood only against the backdrop of the age in which he lived. Nowadays his radical views on labor productivity tend to be condemned for obvious reasons. Nonetheless, Taylor is to be credited with being among the first people to think about how labor can be productively organized. Today our answers to that question differ from the conclusions he reached, but the question about how to optimize productivity is more important than ever. Every organization and every individual human being can constantly improve productivity. To ensure that this happens in the twenty-first century, which points need to be borne in mind?
Today the focus needs to be on boosting the productivity of the knowledge worker and the productivity of knowledge. Therein lies major potential; the question is how to tap into it. In the rest of this chapter we concentrate on these issues, whereby productivity should be understood in the sense of Total Factor Productivity (TFP), the variables of which include not only the above-mentioned productivity of knowledge, but also the productivity of labor, of time, and of capital. The points set out below could facilitate the initiation of a debate on this topic within your organization.
In this day and age, most major productivity gains should be sought in the productivity of knowledge workers, not in manual labor or so much in the other factors contributing to productivity. The first consequence of this is that existing knowledge needs to be harnessed to enhance the productivity of knowledge. Doing this in practice requires an organization to systematically ask itself how the productivity of knowledge can be increased and what kind of fresh know-how should be accumulated and in what way. Incidentally, deciding where knowledge needs to be accumulated will also determine where innovations are ultimately achieved. So it is well worth investing sufficient time in such decisions. Never lose sight of the productivity of knowledge workers, though; after all, it is they who bring knowledge into your organization and apply it there.
All knowledge workers have specialized knowledge, and it is the specific combination of their skills and knowledge that distinguishes them, even if they are active in the same domain. Knowledge workers should know more about their individual specialist area than others in their organization. After all, this is what they are paid for. In this respect, knowledge workers are above all responsible for the state of their knowledge and must therefore keep learning all the time and also assume responsibility for their productivity.
While in the industrial age a job’s title, by virtue of the available technologies and products associated with it, dictated what the respective worker was required to do and also how to go about the tasks, in today’s society precisely the opposite applies: Job incumbents have to organize large parts of their work themselves, since it is they who determine what to do and how to do it. In short, they largely manage themselves.
Even though there are probably as many ways of working as there are people, there is nonetheless one generally applicable “secret” for ensuring that work is productive and effective: concentration on a single task. People interested in optimizing productivity must organize their activities around a few key tasks and set aside lengthy, consecutive blocks of time to work on them undisturbed. However, it is important not to overlook the fact that knowledge work can also entail manual tasks, as is the case when knowledge workers use tools and implements, for example. True professionals practice applying tools and equipment so that they can put their training to good use whenever called upon and work effectively even under stressful conditions or severe time constraints. For doctors, pilots, soldiers, athletes, and musicians the need for such training is self-evident. It is always worth reconsidering where in your organization manual labor is essential and which skills, tools, equipment, and aids could help to boost productivity.
As explained above, it is knowledge workers who offer the main potential for boosting productivity, and they essentially manage themselves. This is why the skill needed by knowledge workers to boost their own productivity is management knowledge, first and foremost self-management knowledge. Organizations that value good knowledge of and adeptness in self-management will have a pronounced edge in terms of productivity. In fact, let us take this a step further. In an organization that builds up management knowledge at all levels in its hierarchy and accumulates a suitable level of management knowledge at each level, with respect to managing the organization, managing innovations, and managing people, people will prove more productive and will at the same time more effectively contribute toward the attainment of the organization’s shared objectives.
Costs arising from systematically training staff in management knowledge very soon pay for themselves through the edge they generate in terms of productivity, the more effective deployment of employees, and the resulting greater overall efficiency of the organization as a whole. These things in turn create, almost as a by-product, a corporate culture of effectiveness and professionalism, which makes work not only efficient and more functionally reliable, but also more pleasant. And those who have worked with real professionals within or outside their organization will know how gratifying true professionalism can be.
Productivity gains will not always be strictly measurable, but they should be readily assessable. If productivity can be measured, however, it is best to use value creation as your parameter. Labor productivity will be the value created per employee, capital productivity will be the value created per invested monetary unit, and time productivity will be the value created per unit of time.
Always be on the lookout for ways of further boosting productivity, even if the results of doing so are less directly visible. Make it possible for all employees to contribute to your organization’s knowledge base. Exploit all the possibilities offered by modern technology, but also create opportunities for face-to-face discussions, especially regarding issues affecting multiple divisions or departments. Holding interdisciplinary closed-door meetings that focus on your greatest challenges can be an exceptionally fruitful way of harnessing knowledge.
Everyone talks about “knowledge organizations,” but very few people systematically apply the latest findings. Someone who has thought very extensively about how knowledge can be productively harnessed in his own organization is Bill Gates. He and his fellow Microsoft executives invested a great deal of time and energy in creating an organization in which all employees could contribute to the company’s knowledge base. Of course, countless companies say this is their objective, but at Microsoft it genuinely is. Gates has long held the view that: “Smart people anywhere in the company should have the power to drive an initiative.”1 Back in the early 1990s, the Internet had not yet become Microsoft’s top priority, but when a Microsoft worker visited Cornell University and noticed that the Internet was being used for far more than computer applications, as soon as he returned to the company he wrote a dramatic e-mail stating that if nobody heeded him and unless Microsoft immediately shifted its strategy with respect to the Internet, the company would be driven straight into bankruptcy. That e-mail ultimately reached Bill Gates, prompting a complete U-turn in Microsoft’s approach. Gates subsequently attributed the company’s drastic strategic change of direction to the author of the e-mail and other Microsoft employees. Just how long term and far reaching the resulting turnaround really was is clear from something Gates said only a few years later: “If we go out of business, it won’t be because we’re not focused on the Internet. It’ll be because we’re too focused on the Internet.”2
It is clearly worthwhile to seek ways of harnessing the knowledge of a company’s employees. Making the available knowledge productive will be one of the decisive factors that determines the success of your business and the success of its managers.
What do you need to do to become more productive? By when do you plan to achieve this?
Which specific steps can you take within your organization to make knowledge more productive?
Discuss with your colleagues where you see opportunities for making your organization more productive.