Articles

Organisation Impact on Productivity

In Uncategorized on November 15, 2010 by Tim Aikens

Much of the time we think in terms of productivity as a ratio of output per unit input.  That’s fine, but what about some of the less tangible aspects of productivity?  For a start, how much does your organisation encourage, enhance or destroy productivity?

Let’s start with organisation structure. For most of us this is the hierarchy or chain of command from the top down through to the lowest level of the organisation.  Now think of two managers in the middle of an organisation.  One has two subordinates who each manage three supervisors.  The other has five subordinates who each manage five supervisors.  Who is the more productive?  The natural and sensible conclusion is the latter – assuming that they have equal jobs and responsibilities.  It also seems to be fairly common sense.  Yet there are still an awful lot of organisations in both public and private sector where you see one manager reporting to a boss who then reports to his boss and so on – a series of one on one reporting.  Why does this still happen in a world where competition is intense and performance paramount?   I honestly don’t know.  As a consultant, I am glad that such common sense appears to be in short supply, otherwise I might be out of a job!  I can, however, think of a few reasons.  People move on, get promoted, technology changes and all too often the organisation reflects the available people.  Consequently structure gets out of hand and becomes less than effective unless it is always under review.

Another area where organisation has an impact on productivity is in decision making.  If one level in the organisation has the ability to make a decision on an issue, where is the benefit in bringing other levels into the process?  Now, admittedly there is often benefit in a consensus  based or collegiate approach. But often this is an excuse for prevarication or spreading the risk should things go wrong!  The extended process of decision making costs more, takes more time and rarely leads to a better decision, so why do it?  Part of the answer is above. Another aspect is lack of clarity about who gets to make decisions, but much more importantly a lack of clarity about what level of decision a particular level of management should take.  For example if the Chief Executive takes the decisions that affect the business from three years into the future and beyond, the next level down should focus on decisions affecting the business from say one to three years, the next level down from six months to one year and so on. Think of the clarity this would give to management roles and how much more effective they would be!

Is your organisation structured to be productive?  It’s probably about time you took a look!

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