Tuesday, September 23, 2008

The wrong way to increase productivity

When we tighten our belt in these trying times, we thought of doing more with less or But there is a right way and a wrong way to accomplish this.

According to a report by the International Labor Organization,1 U.S. workers are the world's most productive, followed by Irish. But when productivity is measured by hours worked, then Norway is ahead of U.S.

When we look at the average annual increase in productivity, U.S. is lacking behind Western Europe and Japan.

“The difference in rankings can be explained by the fact that annual working hours per person employed are considerably higher in the United States than in the majority of European economies,” the report said.

That means U.S. productivity gain is based on increase in the hours worked per week by individuals and we are eroding the hard earned gains we made in the 1960's and 1970's.

This cannot continue. We all have limited number of hours per day and it's well known that beyond a certain number of hours worked, productivity goes down. If we continue the current trend, U.S. will be slipping behind other nations.

So increase in productivity has to come from other sources such as the strategic use of one's time and appropriate leverage of technology.

Computers has shown to be a great tool that helped in the 1990's and earlier 2000's. What is the next technology wave that can continue this trend? I believe it will be collaborative and team work. That's why IBM, Microsoft and Cisco are talking about tools for collaboration and team work.

1 (http://www.nytimes.com/2007/09/04/business/worldbusiness/04output.html?fta=y)

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