The Productivity Drive

The government has invested heavily in the drive towards greater productivity.  Local companies have benefitted from a whole slew of government assistance schemes like the Productivity and Innovation Credit (PIC), the Capability Development Grant (CDG), and more recently the WorkPro Grant.  Despite these efforts, productivity seems to be elusive.  Recent statistics from the Singapore Department of Statistics indicate that Annual Growth in Value Added Per Worker shrunk by 0.2% in 2015, and increased by 1.0% in 2016.  This against a backdrop of average annual wage increases of about 4% each in 2015 and 2016.

 

The Elusive Outcomes

A possible reason for this is that past job redesign efforts have been very narrowly focussed and did not effectively address root cause problems, eliminate inefficiencies, or make processes more optimal.  Consider for example the introduction of electronic ordering systems that are so common today thanks to generous grants from the government and clever marketing by technology companies.  The new systems require customers to self-order, and is supposed to free up the service staff to perform more value added service.  However, a careful look at many FnB outlets suggest that while the customer is busy self-ordering, the service staff are just standing idly by.  Thus, there is no real productivity gain.  Conversely, service levels drop (self service versus full service), costs increase (cost of purchase and maintenance and replacement), and turnover can be slower – some experiments have shown that it actually takes longer for customers to order through an electronic system than to order through the service staff.  This is especially so when customizations to the orders are required.  In this instance, it is clear that the process has been redeisgned without a corresponding redesign of the job.  The end result is a failure to achieve productivity gains.

The Pitfalls of Non-Systemic Redesign

Redesigning tasks and jobs without a systemic view of the entire value chain may cause certain factors or components to be overlooked.  Let’s visit another example – introducing an RFID inventory management solution at a retail outlet may address the issue of a time-consuming task.  However, it does not necessarily mean that the freed up time would result in improved sales or improved customer satisfaction.  Similarly, a focus on redesigning the job of the Sales Assistant ‘to do more with less’ may not address the business needs of the retailer who needs to contend with the rise of online shopping platforms.

It is clear that the optimization of a particular task or role may not necessarily lead to an improvement in overall outcomes.

Benefits of Systemic Redesign

Job and process redesign cannot be dealt with in isolation – these have to be addressed in concert for full benefits to be realized.  In the above illustration, the holistic approach to redesign allows the retailer to revisit fundamental models such as ‘Is this the best way to sell my products?’.

This fundamental line of investigation can lead to transformational change.  For example, introducing a new hybrid online-physical concept store can allow the retailer to display and keep less inventory at its stores; Sales Assistants can be supported with a database of the retailer’s latest offerings for the season, and can be better equipped for improved interaction with shoppers.  The retailer is able to improve the entire situation by reducing the need for expensive retail floor space, while potentially increasing footfall and sales.

Overall, there is a real potential for revenues to increase through smarter use of technology and by changing the way in which products are presented and sold to the customer.  This increased revenue, with potentially lower costs, translates into more sales per employee (one definition of productivity), and can justify a sustainable and meaningful increase in salaries for Sales Assistants (perhaps they can be called personal shoppers now?)

We should all took a step back to really consider what we want to achieve out of redesign before we give in to the temptation to purchase and apply the next piece of fancy technology.  A holistic approach to job and process redesign may be the key to real and sustainable productivity gains.