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Outputs To Outcomes: Why It’s Time To Stop Measuring Productivity

Initially used to measure the link between exploited resources and final results in the industrial production process, the concept of productivity is the most widely used economic indicator. It is also sorely out-of-date.

photo from above of a woman on the floor working on her computer

Working from home

Alexis Gaches

Two hundred and fifty years after the beginning of industrialization, a new revolution is on: the digital one. If the automation of almost all production has led workers to turn to knowledge-based jobs, the concept of productivity is still anchored in management culture. But it is time to question the relevance of an evaluation of intellectual work through the prism of productivity.

Let’s take the example of a writer able to write two mediocre books in the same amount of time they would need to write one very good book. Two books means twice as much output, so a higher productivity rate. But since one good book sells better, their publisher will likely prefer quality over quantity. In this case, applying a productionist approach would be counterproductive.

Better to satisfy a client than to time work

The same logic applies on the scale of services and the digital economy. A digital development agency working to improve an e-commerce app for one of its clients could decide to measure the team’s performances on the basis of purely quantitative parameters.

If the team is rewarded for the delivery speed and the number of modifications made on the program, it will be encouraged to deliver multiple minor features that do not improve the buying experience of the final user and do not make the product more attractive. The team could have invested in more long-term, in-depth creative work — riskier but more satisfying for the client.

Outcomes at the core of management thinking

If productivity has always been reliable to measure the results of the use of technological and financial resources, it has never been a good management tool to evaluate human impact. What measure should then be used instead ?

Health and happiness are necessary ingredients to produce quality work and carry out objectives

This question can be answered by moving from a model based on efficiency to another model, centered around efficacy, differentiating between the notion of outputs (immediately quantifiable results) and outcomes (bigger scale results that can be observed over time on the basis of predefined objectives).

For example: Instead of ordering five articles a month from a marketing manager, they should be asked to contribute to the increase of web traffic, no matter the number of articles published, and assess their work based on the result depending on this objective. One of the advantages of this approach lives in its capacity to stimulate creativity and innovation. If we impose short-term quantitative results instead of setting impactful strategic objectives in the long run, we significantly reduce creative possibilities.

It is important to establish with coworkers a relationship that puts the individual at the center

Alex Kotliarskyi

Looking back on the work done

This management method is a better fit for the new flexible and decentralized work mode. It allows the creation of fluid, adaptable processes, a more strategic management of resources, a responsibilization of collaborators that makes for transversal team dynamics.

In this context, measuring improvement means analyzing growth rates. Are there fewer service breakdowns over time ? Is the rate of new client acquisition staying stable or improving each year ? If these indicators improve, it means there is gradual progress. Quality-wise, it is recommended to plan retrospectives to reflect on the work done, learn lessons from it and apply them in the future.

Productionist approach does not work anymore

Health and happiness are not variables usually included in improving productivity, but they are necessary ingredients to produce quality work and carry out objectives. It is, for example, possible to use as indicators the analysis of the number of planned days off in comparison to the number of those unplanned, or the amount of overtime.

It is important to establish with coworkers a relationship that puts the individual at the center, rather than the project, because it is on this foundation that we will be able to build a work environment that favors quality. This paradigm should have been changed 20 years ago, at the dawn of the digital revolution, but it is not too late to make the change today.

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FOCUS: Russia-Ukraine War

Backfired! How Russia's Playing Games With Gas Prices Became A Big Problem For Its War

A complex compensation mechanism for fuel companies, currency devaluation, increased demand due to the war, logistics disruptions, and stuttering production growth have combined to trigger price rises and deepening shortages at home in the Russian energy market. That is a real risk for the war in Ukraine.

photo at night of workers at a gas plant

Workers in the Murmansk region of Russia overlook Novatek's gravity-based structure platform for production of liquefied natural gas

Vladimir Smirnov/TASS/ZUMA
Ekaterina Mereminskaya

Updated Sep. 20, 2023 at 3:20 p.m.

In Russia, reports of gasoline and diesel shortages have been making headlines in the country for several months, raising concerns about energy supply. The situation escalated in September when a major diesel shortage hit annexed Crimea. Even before that, farmers in the southern regions of Russia had raised concerns regarding fuel shortages for their combines.

“We’ll have to stop the harvest! It will be a total catastrophe!” agriculture minister Dmitry Patrushev had warned at the time. “We should temporarily halt the export of petroleum products now until we have stabilized the situation on the domestic market.”

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage.

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As the crisis deepens, experts are highlighting the unintended consequences of government intervention in fuel pricing and distribution.

The Russian government has long sought to control the prices of essential commodities, including gasoline and diesel. These commodities are considered "signalling products", according to Sergei Vakulenko, an oil and gas expert and fellow at the Carnegie Endowment. Entrepreneurs often interpret rising gasoline prices as a signal to adjust their pricing strategies, reasoning that if even gasoline, a staple, is becoming more expensive, they too should raise their prices.

The specter of the 2018 fuel crisis, where gasoline prices in Russia surged at twice the rate of other commodities, haunts the authorities. As a result, they implemented a mechanism to control these prices and ensure a steady supply. Known as the "fuel damper," this mechanism seeks to balance the profitability of selling fuel in both domestic and foreign markets.

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