5 Ways to Blast through the Productivity “Sound Barrier”: Trading Pipes for Platforms
3 December 2015
We are in an age where the vast majority of large organisations in developed economies are struggling to find ways to seriously boost productivity. The recent OECD reporton the future of productivity identifies the growing gap between those super-productive organisations and the rest.
They highlight ICT playing a key role in the future of productivity. The now ubiquitous “digital disruption” phrase, in the USA in particular, is providing real-life examples of the productivity boom enjoyed by successful digital platform businesses.
Businesses like Ebay, Amazon, AirBnB, Uber, Facebook, Linkedin and the like have already blasted through the productivity “sound barrier” with their relatively small staff and high impact business models. But what about those established large businesses that are often the target of these upstart platform providers? How can they match these productivity behemoths in the marketplace?
Through our organisational network analysis work we have taken hundreds of organisational x-rays of traditional organisations over the past decade or more. Many of these firms are looking to collaboration for a step change productivity boost. Organisational network analysis identifies how work is really happening, under the cloak of the formal organisation chart, by surfacing the real people to people dependencies. Importantly it identifies the true internal influencer, many of whom are invisible to formal line management. The over-riding theme that we see is the predominance of productivity silos. In essence the formal business units are collaborating intensely within their own walls, but with precious little connectivity between them. In most cases the productivity of one business unit can be totally undermined by the productivity aims of another. Regularly firm KPIs will even encourage internal competition. Its not surprising that the OECD has found that for the majority of organisations, productivity growth is stagnating. We found that when organisations leveraged their identified internal influencers, at all levels, good stuff happens and happen fast.
Lets reflect a little on how we got here in the first place. Before the “age of the platform” the big productivity toolsets were engineering toolsets. Total Quality Management, Six Sigma, Lean Manufacturing, Business Process Management were designed to bring well-engineered systematic methods to productivity enhancement. As useful as they have been, we are now in marginal returns territory. No productivity sound barrier will even be approached by pushing these familiar themes. Where we are seeing sound barrier breaking productivity is in the world of “platforms” that facilitate human initiative to connect and produce.
Here is the crux of the problem: Compliance versus Initiative.
Sangeet Paul Choudary elegantly describes this as “Pipes vs Platforms”. Traditional firms work as pipes, trying to push as much through the pipe to the customer, as cheaply as possible. This requires people to essentially “comply” with codified business processes to achieve this. Boosting productivity in the pipe means more rules and bigger, more expensive pipes. But here is the rub. The rules rarely work in all situations. The pipes regularly leak. Increasing and costly overheads are required to manage these leaks, But it’s a losing battle. So what we get is flip flopping between departments in the service centre; off spec products sitting in the warehouse with nowhere to go; continuous delays waiting for the only person who knows what to do to come back off leave; falling through the cracks is now more like toppling into the crevice.
But it doesn’t have to be like this. How is it that Buutzorg, the Dutch neighborhood nursing organisation can grow to a very profitable market dominating 7,000+ employees in 7 years, with no “pipe” style business process management in place? Indeed how have all of the successful platform companies like Uber, AirBnB, Ebay, Amazon achieved their success with scant regard for the “accepted” productivity tools mentioned? The key is that they have leveraged human initiative. They have established platforms on which individuals can leverage their own collective initiative to succeed in the work they want to do. Its not a world without rules though. The rules however are designed not for compliance to a pre-determined process, but for sustaining productive interactions in a busy digital marketplace.
But what about you; stuck in an old world bureaucratic organisation, being weighed down by increasingly onerous compliance regimes and time-wasting overheads to your main work? Should you just leave for greener pastures? One school of thought suggests that “too big to let fail” is exactly the wrong thing for governments to support; as these organisations will never be able to change sufficiently to meet the required productivity levels. But pragmatically, if 90% of the world’s firms sit in this space we need to find another way to break through that sound barrier.
Here are my recommendations for both organisations and individuals who feel trapped in that productivity wasteland:
- For business processes requiring human judgment, change the management style from pipe to platform i.e. remove the process rules and let people self manage.
- If a process can be automated with 0% chance of failure, automate aggressively.
- As an individual, work to be a linchpin. This does not mean to become a bottleneck, in fact the exact opposite. Be seen as the “go to” person that can get things done. Ask for forgiveness rather than permission. Once you have achieved this status, help as many others around you to do the same.
- Find the linchpins in your organisations and leverage them ahead of any formal processes.
- Finally, value relationships over processes. In the longer run breakthrough, sustainable productivity is a human centered trait.
See you on the other side of that sound barrier!