East Coast discovers productivity

Have you ever noticed how trends don’t matter until they hit the East Coast? We could have two feet of snow and be buried from Minneapolis to Manitowoc to Milwaukee and it’s barely mentioned on the national news. When that same storm reaches Boston or New York and threatens to “dump” six inches, suddenly it’s a major meteorological event. It’s always amusing to me.

Well, it’s happening again, and this time it’s around a more critical issue.

The body gap makes productivity increases critical for ongoing economic growth. Here in Wisconsin, we’ve known that for years, but the folks out east are just now seeing this as an issue. Recent articles published by the Wall Street Journal, New York Times, and The Brookings Institution all highlighted productivity as a critical element of future growth. Productivity is finally on their radar screens, but these discussions frame the issue incompletely, either strictly as a policy issue or a problem without a solution. For them, productivity growth of 3%–5% is a huge success. Anything more is impossible.

Wisconsinites know better. We understand the urgency in solving this problem and what we need to do. Even modest economic growth requires 30%–40% productivity growth — a level not seen since World War II. It’s a tough task and requires hard, focused work to make it a reality.

Transformational productivity can sound a bit like Don Quixote singing “The Impossible Dream.” It’s a tough goal but not impossible. I was skeptical at first, but learned that if we raise the performance of firms in the lowest three quartiles to the same levels as the top quartile companies, we can accomplish almost our entire goal. That tells me we know what to do. We’re not inventing anything new. We can certainly make this transformation happen.

It takes a different approach to create transformational productivity. The usual one-size-fits-all programs generate improvements in the 5% neighborhood. Better results require operation-specific action — in effect, a door-to-door campaign to identify the most leveraged opportunities to apply the best solutions. This is tough work because it is not scalable and requires guides with broad expertise to reach its potential. That’s not the way we usually work.

It’s also unusual because technology is not the lead actor in this drama. In most companies, the most leveraged opportunities start with a clear understanding of critical activities and a re-evaluation of current work systems. Tightening those systems makes them more efficient and builds clarity and engagement around how the organization creates true value for its customers.

This work builds a foundation that makes technology more effective. The process eliminates unnecessary work, rather than automating it. The clear process that emerges makes it possible to find and apply the right technology at the right time in the right place to be most effective, eliminating much of the guesswork around the proper actions. It also reduces risk as new solutions take less time to implement and reach their intended ROIs.



The quest for transformational productivity causes some interesting shifts. Accomplishing these higher productivity levels is a journey, not a specific destination. In this journey, expertise becomes more critical than ever — even as specific experts lose leverage. These journeys require guides with the expertise to connect to the resources and ideas necessary in this new ecosystem. Guides find the path, while experts are needed for the “snake bites” along the way. The evolution will be exciting and generate incredible results for our manufacturers.

Future economic growth requires transformational productivity improvements to overcome the stagnation in workforce growth. Creating this level of productivity requires hard work around new approaches, focused on individual operations. Technology facilitates these efforts, building on the foundation of solid and efficient value-creation processes.

Transformational productivity provides a terrific opening for Wisconsin manufacturers to position their operations for the future. Let’s make sure we take full advantage of this opening to create new opportunities for Wisconsin’s economy.

Click here to sign up for the free IB ezine — your twice-weekly resource for local business news, analysis, voices, and the names you need to know. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.