How can this be?  Productivity is supposed to be a good thing.  Productivity is the measure of how much a business produces divided by the number of workers, so if productivity goes up a business should make more money.  How can this be a talent killer?

Think about the definition again.  One way to “juice” productivity is to lay off workers.  In the short term, productivity goes up (and investors usually cheer as the stock price rises) until the burden of producing weighs too heavily on a workforce that is too lean.  Another way to increase productivity is to sell more, take on big orders, without fully staffing for the increased demand.  This will also lift productivity–for a a short while.  You can cheapen the brand, cut development or innovation, or manage by dictate:  management declares a super-stretch result that leaves everyone scrambling to “hit the number.”

All of these examples (which are far too common) involve a focus on the short-term, some degree of manipulation, and a failure to deal with longer-term consequences.  And those are what is killing good talent practices in business.  How?  By treating people like human resources, not people who can contribute to the company if given the opportunity.  By failing to invest in sustainable gains in revenue, growth and productivity.  By stressing out workers, you give them an incentive to go to your competition.

The path to illusory productivity involves short-term thinking, shifting the burden to workers, or some kind of management shell game that hides the real dynamics–for a while.  These kinds of productivity gains are what is killing good talent in American business.

Not all productivity has to come with these tradeoffs.  There are other ways to grow productivity that promote good talent management:  through more employee engagement; by investing in training and skill development; through analyzing business processes and cutting out the waste and rework; by building a valued brand and unique culture that is hard or impossible to duplicate elsewhere.  The productivity that results from these kinds of practices is sustainable for the business and it tends to engender more loyalty and trust in the workforce.

Which kind of productivity is your company focused on ?  Let me know by leaving a comment.

I owe inspiration for the headline and article to Henry Mintzberg, management professor and contrarian thinker at McGill University in Montreal (see his article in Harvard Business Review July 2007).