Productivity @ Work

Singapore's productivity is lacking and according to sources cited in the link actual shrank in 2009 by 14.2 percent. Throwing in more hours (while being at the top of the world already) won't fix it, since productivity is (also) measured by "output per hour" and an increased output due to more hours worked won't change that. Our prime minister thinks that Singapore's productivity level is only 60%-70% of its potential. So in the typical hands-on-the-government-will-do Singaporean way a Productivity Portal has been created by the Singapore Government.
The site start with the introduction What is productivity: " Technically, productivity is the ratio of output to input. It is a measure of how efficiently and effectively a business or an economy uses inputs such as labour and capital to produce outputs such as goods and services" (emphasis from original source). Looking at the definition of productivity we meet two familiar terms: efficiency and effectiveness. Remember ISO 9241-11: " extent to which a product can be used by specified users to achieve specified goals with effectiveness, efficiency and satisfaction in a specified context of use." (emphasis mine).
So productivity and usability share their core properties. Making applications work well thus is not just a "nice-to-have" but an essential component of productivity improvements to accelerate value creation. Interestingly when calculating "value created" labour cost don't reduce the value, but are part of it, a refreshing departure from seeing workers as cost factors only. The website puts " Value Added = Sales of Output ($) - Total Cost ($) of Purchased Material and Services" (so your subcontractor _is_ a cost only). My friend Eric Mack states:
" Value created = Knowledge _ Methodology _ Tools". In IT we tend to focus on the tools, think to have some good grasp of knowledge but we are lacking in methodology. Sometime I wonder if we are caught in the The Knowing-Doing Gap . GTD is one method and there is no such thing as "no methodology" (at least if you count "I ignore tasks until someone screams" as methodology). Later this year there will be a conference focusing on productivity in Singapore.

Posted by Stephan H Wissel on 14 February 2011 | Comments (5) | categories: Business

posted by Stephan H. Wissel on Tuesday 15 February 2011 AD:
@ Ethann: Yes absolutely once you include "pleasure generated" in your measurement

@Ian: I only partly agree. I agree that services has a huge growth potential and needs to be looked after. I disagree that the measurement is wrong.
All the knowledge you generate serves at the end the purpose of writing a bill to someone. It doesn't, for the matter of measurement, matter if you use the knowledge to improve your production or to render a service. The measurement of revenue per worker is fully accurate for services too. Once you include "intellective capital" and not only $$ you have your bases covered.
So I don't see what is wrong with that.
Of course what is really tricky: how to measure intellectual capital? Is it an abstract value or shadowed by licence fees or it it just that fluffy stuff that allows me to write a bigger bill for every hour of service I render?
Emoticon biggrin.gif

stw

posted by Ian Randall on Tuesday 15 February 2011 AD:
Measuring productivity by limiting the focus to Labour and Capital is so "Industrial Era" thinking.

In the "Knowledge Era", we need to come up with some new methods of measuring productivity that recognise both the quantity and quality of value being created in an increasingly service-oriented world.

Currently there is an explosive growth of middle class consumers across all of the Asian Region, and Singapore is well placed geographically and socially to exploit this opportunity. But the biggest growth potential for Singapore is the demand for services by the new middle class, particularly in China, India and other countries in the region.

But, Singapore's biggest asset is your large well educated population. That is what needs to be exploited more fully to fuel the next phase of massive economic growth for Singapore.

posted by Ethann Castell on Tuesday 15 February 2011 AD:
Is attending a conference on productivity the best use of peoples time? :)

posted by Ian Randall on Wednesday 16 February 2011 AD:
Spoken like someone who's organisation charges by the hour.

Other charging models allow for charging practices such as a success fee, or a charge based on the % of costs reduced or profits increased.

Other models include in-kind contributions where no hard cost or monetary value actually passes between the parties, (which is very popular in RD projects involving multiple partners).

Even bartering is a common way of exchanging value for services rendered and a huge unregulated market.

Sending an invoice is only one way to measure and exchange value.

posted by Stephan H. Wissel on Wednesday 16 February 2011 AD:
@Ian: What has the charging model to do with productivity? I don't get the point you are trying to make. An economic activity has an output. They typical measurement of this output is money and even barter deals can be assigned a monetary value - and if you are properly incorporated you must assign a value for tax purposed. Then you have a measurable output in money and you are back to your measurement. And if you charge x% of achieved cost reduction, your improved knowledge will realize better savings thus a higher bill. So your productivity (revenue per consultant) increases.
Of course you are free to measure "knowledge productivity". To do so you need to measure the amount of knowledge acquired (assign it a unit of knols?) and then divide your net profit by that. This however doesn't change capital or labor productivity measurement.