January 19, 2005

Excerpts: Contagious Success - Part IV

By: 800-CEO-READ @ 1:37 PM – Filed under: Management & Workplace Culture

3. Productivity Plus Innovation Drive High Performance
There is an important difference between productivity and high performance, although the two concepts are often used interchangeably. I suspect that is why 77 percent of the respondents in our study said that they consider their workgroup to be a high-performing unit within their company, when only 10 percent could provide evidence that this was so.
In recent years, some economists have argued that relying on productivity numbers to measure performance is misleading and potentially counterproductive. Based on an industrial model, productivity is still calculated as the number of units produced in a given period of time by a worker. But in a knowledge-based economy in which the service sector employs 80 percent of the workforce, productivity is much more difficult to measure. In addition, the ubiquity of e-mail, cell phones, laptop computers, and other communication technology makes it possible for professional and managerial workers to work from their cars, their homes, and even the beachand those hours are not captured when measuring productivity.
Managers who solely emphasize productivity tend to drive out the capacity in their workers to engage in innovation and creativity. Knowledge workers, by definition, cannot provide full value to their organization simply through productivity increases. To increase shareholder value and sustain profitability, companies should foster creativity. Innovation combined with productivity leads to high performance.