In case you haven’t heard – or think differently – overall productivity growth is declining!

The Sydney Morning Herald’s Muriel Muroi reports that the 1990’s rate of 3% annual improvement had dropped since 2010 to just over 1%. She says we as a country sharply increased our total working hours last year but they on their own did not increase our productivity. Opening up the economy and adopting new technology have been credited with much of the earlier growth spurt, but technology and economic advances have less relative impact these days. Economists recommend continuing to invest in technology and ‘human capital’, but they cost!

What can we do?

Productivity is measured as output per person per hour, so it can be increased by producing the same output with fewer (or less expensive) resources, or by producing more with what we’ve got.

You could simply attack your cost base by outsourcing some of your work to lower-cost suppliers, reducing resources allocated to particular tasks to force productivity to occur mathematically, or withholding pay rises until productivity eventuates. While such methods may work in the short term, they just don’t give any real or long-lasting positive lift. Why would staff ever do their best or contribute ideas if they feel insecure in their jobs, underpaid, and unvalued?

On a more positive note, Frederick Herzberg told us many years ago that the greatest gains in motivation will be gained via increasing responsibility and authority. While some workers have no desire for formal responsibility or authority, research shows that most workers want clarity regarding what they’re being asked to do, and at least some input to how the work is to be done.

Our recent research at GMCL shows that clarity in job design and task allocation, along with belief in our capacity to do those tasks are also big drivers of effort and results.

The magic ingredient?

The magic ingredient then is Discretionary Effort: that is, each staff member chooses – consciously or subconsciously – to allocate greater “effort” without having to be told to. Note that they can also choose to allocate less effort, and Ben Harmer (also of the SMH) reports a critical mass of workers pulling back on their discretionary effort over the Work From Home issue.

Discretionary Effort (or, DE) implies working harder (quantity of hours), but also encompasses working smarter, that is, working harder mentally, concentrating harder, allocating the best-quality time in our day to key tasks, minimising distractions, and keeping our eyes and ears open for opportunities.

The main driver of DE is motivation, these days referred to as ‘engagement’, and is measured as Discretionary Effort. And where do staff get this motivation from? DE has been shown to be significantly influenced by managers – via their decisions and behaviours: decisions regarding how work is allocated across resources, and behaviours such as how managers treat each and every member of their team. As noted above, managers can sub/consciously create either positive or negative motivation via these decisions and behaviours.

While higher level managers need to set and maintain the organisation culture, and coach their lower-level managers, first level managers and team leaders will need to ask questions of their staff to identify their preferences and motivators. Those managers will then be able to explain work relevance (internal supply chain and external environment), task allocation, standards, and support, and to align those to each person to maximum their “buy-in”.

While some workers have always found motivation in “serving the greater good”, according to Mark McCrindle, relevance is even more important to younger staff members! Relevance typically refers to our contribution to the external community and environment, though it can also refer to the supply chain, as per Jan Carlzon of Scandinavian Airlines, who once told staff “If you’re not (directly) serving the customer, your job is to be serving someone who is”.

What are the outcomes and benefits?

What if every staff member went to work every day thinking, “I know what I’ll be doing, I know how to do it without mucking it up, I know I’ll get the tools and info I need, that I’ll be working in safe conditions (blue or white collar), and I’ll be paid reasonably to do that. Let’s go.” Such clarity would bring repeatable, quality work plus occasional ideas of how to do things differently … productivity gains without managers having to do all the thinking? Who’d have thought?

What’s more, the cost in hard dollars is minor. All it takes is additional effort by managers initially to generate additional effort by staff, and a desire to be more staff-oriented in their managerial approach. Maybe some training for managers to be better at both outbound and inbound communication?

Teaching the magic ingredient

So, how well do your first-level managers know each of their direct reports – what they like and dislike, and how they might engage more deliberately? How well equipped are your managers to lead such a bottom-up approach instead of traditional top-down management?

Fortunately, the ingredients for good management are teachable. It might well be the best leveraged investment that organisations can make. It does not require an MBA, and nor can AI do it for you. It requires more than knowledge – it requires awareness, techniques, skills, confidence, commitment and proactivity. It can also be coached and reinforced up and down the line.

So, if you want to raise your productivity, you would do well to start with having managers do what it takes to promote Discretionary Effort. It’s not magic, but it is a powerful ingredient that can lead to dramatic bang for buck.