The Seductive 10x Productivity Myth . . .
The myths of productivity have always fascinated me.
Not least because I received some harsh lessons on them from mentors and leaders in firms I worked in when I was younger and greener . . . (even younger and greener 😉)
The first was the myth of aggregation – 15 minutes time saved daily for 10,000 people is NOT a 3% enterprise-wide cost saving.
It rarely hits the P&L. In the words of a CFO that taught me a lot “We will never see the savings. People will have just have another cup of coffee or find something more interesting to do”.
Work productivity itself is not the end game.
The goal is to increase revenue and/or reduce costs for the enterprise whilst optimizing cash and working capital.
Everything else is a means to an end.
In this frame of mind, I was drawn to a post from Ben Torben-Nielsen.
He wrote of an advertisement he had seen for a half-day AI workshop.
The promise? 10x productivity.
With a wry smile (I imagine) Ben reframes that claim literally;
- A full week of work, done before lunch
- Ten times the output from the same team
- Ten times the P&L impact
“You can buy the 10x slide today. Delivering it, unfortunately, is sold separately.”
The same old truth is at play here – seeing a task that used to take 10 minutes that now be done in 1 minute does not correlate to 10x productivity.
Certainly not 10x “economic productivity”, the efficiency with which a business turns inputs into outputs and boosts top-line revenue or shrinks costs, resulting in increased profit.
Revenue Generation and Cost Optimization.
The 10x productivity myth is based on real examples, so what’s the problem?
- The examples tend to be outliers, shared for dramatic effect.
- More importantly, tasks are not jobs and tasks are not business cycles (end-to-end processes).
- Tasks are, indeed, work, but not all work is created equal.
- Our first responsibility is to identify the work that should not be done, just eliminated, not automated.
The other fascinating challenge with changing “the shape of work” is, to quote Newton’s Third Law of Motion (see, I DID go to school! 😉), “every action has an equal and opposite reaction” . . .
There are always unanticipated consequences, usually related to the “human factor” . . .
We need to focus less on the need for fewer workers (the implication of greater productivity) and focus more on increasing customer value to drive top line revenue AND eliminate unnecessary wastage and cost through genuine efficiency and effectiveness.
The recently reported IKEA example is an interesting one. By focussing on the customer service process and impact, they identified previously hidden customer demand signals. They made the customer service process more efficient with automation and AI, AND created a new $1.4bn revenue stream to capture unmet customer demand. All delivered by 8,500 newly retrained customer service team members, now as revenue-generating interior design advisors. Kudos!
Work needs to be reconfigured end-to-end, not by fixing individual symptoms.
It has become clear that genuine enterprise P&L impact requires business transformation beyond purely optimizing tasks or groups of functional silo activities, or even “polishing with AI”.
Enterprise P&L impact requires a “value stream” or “End-to-End Business Process” perspective.
These end-to-end processes, or business cycles, operate across all units of our business, with key tasks often out of sight.
Success in driving enterprise P&L impact is critical. The 10/20/70 Rule helps to guide our thinking . . . .
- 10% Algorithms
- 20% Tech and Data
- 70% People and End-to-End Process
You can read more on “Driving Enterprise P&L Impact with Digital & AI – The Missing Link” here . . .
You can read the “10x Productivity” post by Ben Torben-Nielsen here . . .
Thanks for reading . . .
The Seductive 10x Productivity Myth . . .
