In an uncertain world, the threat to Australia’s prosperity is real. That’s why productivity is more than just a buzzword: it’s the way of the future.

Productivity is a hot topic in business and always in the news. Yet there is much confusion around what this buzzword actually means. It’s talked about conceptually, but there is widespread misunderstanding about how to improve it.

It’s often assumed that productivity is a passing catchphrase, and will disappear like many business concept fads do. Yet productivity is distinctly related to Australia’s declining income growth, and will not disappear.

The angst that is being felt regarding the decline in prospects for the millennials is a significant outcome of low wage growth that is not keeping up with inflation. Wage, or income growth, has been completely overwhelmed by housing price growth. Though a number of factors have driven the housing affordability crisis, low wage growth is one of them and the productivity challenge is a key part of the picture.

For leaders and corporates alike, productivity can vastly improve lives — but for this to occur, it needs to be experienced at both the personal and business level. It’s not enough to just talk about productivity in macro terms such as regulations, tax policies and international trade.

6 principles about productivity & how to make it work:

1. Productivity is not about working harder or longer

Contrary to popular belief, productivity describes how to work fewer hours with less effort. Working overtime doesn’t increase productivity and neither does taking a pay cut. Both these measures may drive down costs, but they are unrelated to productivity.

Productivity is about maximising your time, skills, and energy, like getting all your work done by lunchtime and taking the afternoon off. It’s about doubling your income while giving your customers a price reduction at the same time. Fir example, if you run a small business and you work really long hours all the time, including weekends, you are not productive. Rather, you are missing out on a vital work-life balance.

So take an honest look at where you spend your time and introduce some discipline into what you do. Treat activities like exercise, meeting with friends and spending time with family as valid, value-adding tasks in your day. Believe me; most of what you do when you surrender these activities does not add value.

2. Productivity can help solve organisational issues

Maximising your own productivity can help you overcome and eliminate problems within your team. Such problems often mean disappointed customers, stressed employees and added costs. When there is a genuine lift in productivity, you will see cost reductions in your organisation, as well as a less stressful workplace.

If you introduce the concept of prevention into your work environment, productivity improvement will follow. Think about the customer service problems you recently experienced and the time and effort you went to in solving them. Then talk to your team about a process change that will stop the problem happening again. For example, if a product was not in stock, review with your supplier what to change to have it in stock in future, such as changing re-order levels.

3. To maximise productivity, first understand and define your process

Before you can leverage productivity in measurable ways, it’s critical to understand what your process does, what your customers want, and how you can deliver that product or service. You must be able to measure it; particularly when it comes to output and your customers’ requirements for quality, service and/or delivery. A good, honest look at this may reveal significant opportunities, such as variable service levels.

Once you have defined your processes, put them in writing, then review every other thing you do that is not part of your process and seek to eliminate some of it.  Some things are an unavoidable overhead, such as adhering to government dictated regulations – but you should challenge the rest.

4. Throughout the process, don’t ignore technology

While you’re reassessing internal structures and service offerings, it’s almost certain that your competitors will be improving their own offerings through technology. To stay ahead of the curve, consider ways in which new technology platforms can enable higher productivity and performance for your organisation.

Powerful disruptive forces are at work against traditional ways of doing things. For example, if you drive a taxi or manage a hotel, you will be experiencing this right now. A bus company that kept bus conductors would not be in business in our modern society today, and the possibility of driverless buses is no longer in the realm of science fiction.

5. Metrics are absolutely vital to productivity

Many leaders and corporates see lost productivity as normal because they don’t separate operating problems from normal processes. Things go wrong so regularly that the problems are now embedded in the process.

To combat this, put metrics into your process with a blue sky approach, and the opportunities will appear. These sorts of standards are possible if you have no problems or barriers whatsoever so that if you don’t meet them, you know that something has gone wrong and you can isolate it and deal with it.

Remember that metrics that highlight problems will be more difficult to get because variance (the gap between what you planned for and what actually happened) can be confronting.  If you have a business environment where most energy goes into dealing with the person who made a mistake rather than what process changes can be done to reduce future mistakes, variance to plan will be difficult to obtain. We see world’s best practice in the airline industry. Because human error causes fatalities, enormous effort is put into making it impossible for human error to have an effect.

6. Create behavioural change to drive productivity

Once you have made the necessary measurements, it’s time to implement new strategies and start taking action. Some of your variances will be difficult or virtually impossible to fix, while others will be straightforward and simple. Think outside the box and solutions may appear unexpectedly.

As part of this action plan, think about the behavioural changes necessary to succeed. At the heart of productivity are people — their emotions, relationships, personalities, skillsets, and so on. Tools, technology, and process redesign all play their part, but in the end, if human beings are involved, it’s the behavioural model you adopt that can make or break productivity.


Productivity is loaded with meaning because it has a profound impact upon people’s lives. In our current market economy, the challenge for all of us is to become more productive both as individuals and at an organisational level. Both now and in the future, improving productivity is one of the most significant interventions that protects our job prospects and enables lasting business success.