Want to Improve Productivity? Hire Better Managers

Want to Improve Productivity? Hire Better Managers

Want to Improve Productivity? Hire Better Managers

The FINANCIAL -- Although many people are talking about the end of the recession and a post-recovery economy, the truth is that productivity in the U.S. and worldwide has remained stagnant for decades.

The conclusion of Gallup's No Recovery report found that real GDP per capita growth has slowed from highs of 3% in the 1960s to only 0.5% in 2016.

What does that kind of slow economic growth mean for individuals? One common standard for measuring prosperity is the belief that the lives of our children will be better than our own. For most people, it is a humble wish. They don't want to become millionaires; they just want to know they are "getting ahead" and that the future is bright for the next generation.

A 2.5% to 3% rate of growth in productivity will lead to a doubling of the standard of living within 30 years, in other words, in one generation. A 1% growth rate will take three generations to reach the same gains. And we are hardly meeting that standard if we accurately measure productivity.

As Gallup Senior Economist Jonathan Rothwell writes, "Using multifactor productivity, it is clear that no period since 1973 has approached the 1948 to 1973 period in terms of efficiency growth."

What Can We Do to Raise Productivity (and Prosperity)?

There are many explanations for our stagnant productivity. Some suggest it's due to a lack of major technological or scientific breakthroughs. Our own No Recovery report argues that certain sectors (education, housing and healthcare) have been consuming economic growth while not providing better outcomes.

Many people are working to increase productivity through digitization and globalization efforts, and through the optimization of natural resources and capital, both financial and human. Better transportation infrastructure and affordable housing would also help.

But these projects are complex and typically require large private and public capital investments.

What if there was a way to boost productivity that cost significantly less? Something that got to the heart of the problem in a direct and tangible way?

What if we could change the way people worked?

Old Boss vs. New Boss

When we think of the term "management," we think of control. For the past 30 to 40 years, that was the idea of management: controlling and supervising processes and people.

The manager was the senior, experienced person who knew how to do things right and how everything was supposed to fit together. Advancement by seniority made sense because experience mattered a great deal.

And yet today, when it comes to the biggest problems in business, the manager doesn't know the answer. Nobody knows the answer. There is no process.

Managers must hire people who are smarter than themselves and unleash them to do things nobody has ever done before. Managers are charged with creating things that don't yet exist. They can't simply copy their past experiences.

Even more so, customers and employees no longer sit still and accept what they are given -- which means managers must be more flexible and creative when it comes to problem-solving. Carrot-and-stick methods of motivation just don't work anymore, primarily because most routine work has been automated.

In short, the world has changed, but too many organizations still have a management philosophy from the days of the assembly line.