Is your organization productive? A leader’s guide

Leading Off

Keep up the good work ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 
Leading Off

Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms

Welcome to the latest edition of Leading Off. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com.

—Alex and Axel

An individual may feel “productive” after finishing a difficult task at work. But evaluating the productivity of entire organizations is much more complex. At its simplest level, productivity measures output relative to input. But the rise of factors such as automation, generative AI (gen AI), and remote and hybrid work makes the ratio of inputs to outputs harder to calculate. With productivity levels slowing among advanced economies, amid a climate of geopolitical disruptions and environmental concerns, leaders may be facing increased urgency to boost productivity within their own organizations. This week, we examine some strategies to make the operational improvements that, taken together, could help companies become more productive.

An image linking to the web page “Breaking operational barriers to peak productivity” on McKinsey.com.

New technologies hold out the promise of improving productivity, but they may not be effective without a commitment to operational excellence, according to McKinsey senior partner Richard Sellschop and colleagues. Our research over the past 20 years has shown that high-performing companies score highly on five essential components of operational excellence and are better able to realize value from advanced technologies. For example, one of these five elements is building a management system that reinforces innovation. Yet few organizations put this into practice by encouraging innovative behaviors, such as frequent contact with managers that enables workers to continually improve a company’s operations. In a recent survey on operational excellence, only 21 percent of employees say they have check-ins with their leaders at least once a week.

An image linking to the web page “Unpacking the mysteries of productivity” on McKinsey.com.

“At the micro level, if you’re a company, productivity is one of the best predictors of the fortunes of your business,” says University of Chicago professor and economist Chad Syverson in an episode of McKinsey’s Forward Thinking podcast. “The more productive businesses are much more likely to survive.” He adds that AI may be able to reverse the productivity slowdown in many advanced economies. Between its potential applications in a variety of situations and sectors and its ability to complement other technology investments—including intangible assets, such as managerial skills, talent, and processes—AI could be “the best candidate for a new general-purpose technology we’ve had in decades,” says Syverson. “It’s made me more optimistic that we will end the productivity growth slowdown than anything else that’s happened since I started looking deeply at the slowdown ten years ago.”

An image linking to the web page “Working nine to thrive” on McKinsey.com.

Measuring personal productivity can be a tricky business. Some workers may feel more productive by following their own “ultradian” rhythms (that is, adjusting work to periods of high and low alertness during the day), focusing on high-priority projects exclusively, or choosing the operating model—remote, hybrid, or always in-person—that works best for them and their teams. Some employees may feel obligated to fill their downtime with meaningless tasks that managers assign just to keep their teams looking busy. According to research led by McKinsey senior partner Patrick Simon and colleagues, employers could address six modifiable factors of health to improve employee well-being—and increase productivity as a result. “One of the top contributors to productivity at work is an individual’s sense of self-efficacy—an employee’s belief that they can cope with difficult or changing situations,” note the McKinsey experts. “Self-efficacy can be improved through interventions, suggesting that employers can target self-efficacy to improve employee productivity.”

Lead productively.

— Edited by Rama Ramaswami, senior editor, New York

Share these insights

Did you enjoy this newsletter? Forward it to colleagues and friends so they can subscribe too. Was this issue forwarded to you? Sign up for it and sample our 40+ other free email subscriptions here.

This email contains information about McKinsey’s research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy.

You received this email because you subscribed to the Leading Off newsletter.

Manage subscriptions | Unsubscribe

Copyright © 2024 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007


by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 02:08 - 28 Oct 2024