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Better Thinking Boosts Productivity & Profits

By Steve Bareham |

"Does investment in people really improve productivity? At my corporation, Motorola, where we invest about seven percent of our payroll in the training and development of our employees we get an average of 20 percent per year productivity improvement as measured over the last five years."

Ed Bales, former CEO of Motorola Corporation, USA

Productivity and profits are two of the most pressing concerns for business people but can a connection be made between these two desirables and the ways people think? This is a crucial point for people concerned with human resource development, because unless a convincing case can be made for such a connection, it is unlikely that most business and organizational leaders will devote the time or risk the financial resources that are required to commit to a new focus for rank-and-file intellectual development.

Higher order thinking (HOT) skills are by far and away the most important drivers of our economies, and these skills range from astute strategic planning in the boardroom to the creativity that enables technology and manufacturing firms to anticipate and to remain proactive to marketplace needs.

The World Economic Forum believes that future prosperity for industrialized nations depends on innovation. The words "innovation," and "innovate" mean to do things in new ways, and to generate new ideas and methods—clearly, if innovation is the key to continued economic success across North America, the focus must be on how we think and on how our thinking can be used to stimulate productivity.

First, What is Productivity?
Productivity is a word much bandied about today. Interestingly, though, few people have a real understanding of what it means, and significantly, most would be hard pressed to measure productivity in their own workplace. So, if we're going to talk about improving productivity, it seems advisable to first explore what productivity is and to suggest ways of measuring it.

Productivity here refers to labor productivity, the amount of output per hour worked. Productivity is used to measure the relative efficiency of an organization in terms of labor costs versus realized revenues. For example, Company A has 10 fulltime employees who each work 35 hours per week and revenues last year totaled $1 million; compare this to Company B with 20 fulltime employees also working 35 hours each per week; Company B also grossed $1 million. Clearly, all things being equal, Company A could be said to enjoy higher better productivity per employee.

In practice, in the work world, productivity is measured in many ways, and it can present a confusing theoretical, statistical, and methodological morass that is too complex and lengthy to cover in this feature. Readers who are interested in pursuing productivity study or research in the interest of achieving higher performance workplaces can access information in most business libraries or via the Internet.

The following steps, however, are a useful introduction to some productivity concepts; they were developed by the National Association of Manufacturers (NAM), Washington, DC, and they make clear the connections between higher order thinking and improved employee performance that can lead to higher productivity and thus, to improved profits.

Steps to a High Performance Workplace
NAM defines a high performance workplace as one that:

  • empowers workers to make decisions about their work so they can improve quality and efficiency (good decision making is a higher order thinking skill)
  • enhances communication and builds trust between management and workers to ensure worker support of company values (communications training involves the acquisition and application of HOT skills)
  • focuses on the quality of products and services as the prime strategy to win and keep customers (visioning, planning, and implementation to achieve high quality requires HOT skills)
  • makes the company a learning organization in which worker training and education are seen as continuous investments in productivity—so that employees have the knowledge and abilities they need to be able to contribute more effectively.
    Although the NAM description of the high performance workplace does not make specific reference to improved thinking, if we examine the high performance components from just the first point, and if we draw inferences from what is written and suggested, the linkages to better thinking skills become apparent:
  • "empowers..." - being empowered requires HOT planning and evaluative skills if good outcomes are to result
  • " make decisions..." - good decision-making requires HOT skills to comprehend planning, anticipation of outcomes, comparisons between alternatives, etc.
  • "...improve quality and efficiency..." - assessment, creativity, research, evaluation, refinement are all required for HOT thinking.
The critical consideration here is that empowerment, decision making and the ability to bring about improvements in quality and efficiency would be empty, meaningless rhetoric if employees lacked HOT skills.

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