The Real Meaning Of Productivity

What is the real meaning of Productivity? The classic meaning was when a business produced more with the same amount of inputs- labor and/or capital they were more productive. That meaning has changed. Now the real meaning is producing the same amount of output with less labor. Which means that you get more ‘productive’ by firing workers, and thus Wall Street loves you and boosts your stock price.

This phenomena is aided and abetted by the Wolves vs.. Sheep argument that I have posted on. The wolves fire the sheep and somehow manage to get away with it. The sheep even believe the story they are told. That it is government regulations, or unfair trade, or some other vague force . that is responsible for their being on the unemployment line. The fact that the wolves have stock options and get richer by firing them somehow isn’t a factor.

And the effects of this re-definition of productivity doesn’t end with the downsized. Those who survive find themselves doing more work for the same, or sometimes less pay. If you complain, you’re gone.

This started in manufacturing , in the 80’s for the most part. But it has spread now to the office and everywhere. If you can find Stanley Bing's article “The 0 % Solution” for Fortune Magazine a few years ago (unfortunately I don’t know the issue date) you can see his take on the meaning of productivity.

He and I are not alone. Shoshana Zuboff wrote about the discrepancy between our progress from subjects to citizens in comparison to our status as wage slaves or serfs. (“Evolving”- Fast Company May 2004)

Well, complaining about how the world sucks may be fun, but not particularly useful. How do we deal with this? Is there an answer?

I have some ideas, but want to mention a more discouraging viewpoint first. If you check out “Business Has Not Found Its Copernicus” you will see Michael Skapinker of The Financial Times comments.

I think this problem can be addressed, but I am not Copernicus so I will put these ideas out there and hopefully get some feedback and see what can be developed.

I think a network needs to be created. A network of businesses that follow a different set of rules. A network of more ethically motivated businesses. That are not only driven by the old paradigm of maximizing profits. Companies that value their employees, and their customers at least as much as they do their profits.

How would this network work? I suggest that a set of rules be established and companies can join only if they follow them. They would then get the advantage of having the equivalent of The Good Housekeeping Seal of Approval.

Some of the features of this network would be: Flex-Time for employees; P/T work with benefits like the Dutch do so well; Some version of the business structure advocated in “The Share Economy by Martin L Weitzman Harvard Business Press 1984“ ; A limit on the spread between the CEO’s salary and the lowest worker salary; Awareness of the needs of Sustainability; a “Social Contract”; perhaps worker ownership.

These are not brand new ideas. And I am sure that various companies and organizations out there follow some or all of them. But, to me, they are invisible. The mainstream media does not talk about them. I guess they are not “News”.

That's why I think a network, or organization may be necessary. To bring all these people together to help one another, to publicize their approach, and to, hopefully, cause change to happen.

The bottom line is: Will this work? In the current form of market capitalism makes it hard to see it happening. The existing models that are followed will probably out-compete since they (wolves) and the sheep consumers are focused on lowest price, not best overall value.

And if it did begin to succeed, how would the competition respond? By absorbing some or all of these practices? (The Borg?) Or by trying to drive them out of business with predatory pricing and other anti-competitive practices that the regulators, depending on who runs the government, might overlook.

I don’t think it will be easy. But I think the time is right to start trying this or some other similar approach. The current business economic model is in disrepute and vulnerable for the first time in 30 years. We need to strike now.