3 Big Things That Drive Productivity

The Productivity Problem

The UK is second bottom in the G7 for productivity. This could be the factor that decides, more than anything else, how easily the UK’s public sector deficit can be reduced. If we want higher living standards and faster real wage growth, one of the key determining factors will be productivity. And productivity growth in the UK has been extremely weak since the Great Recession.

This is a topic so complex it confounds even the most expert economists, and it’s one I’ll be returning to in the coming weeks and months. This week I want to raise a very simple question about how we make our teams and organisations productive.


The Value Paradox

There’s a great TED talk by Dan Pink, in which he discusses motivation, creativity and productivity. He gives an example of two groups of people, asked to solve a puzzle. The first group were told they would be timed, to ‘establish norms.. for how long it typically takes someone to solve this kind of problem.’  The second group were offered monetary rewards, based on how quickly they solved the puzzle compared to their peers. The second group took 3.5 minutes longer to solve the puzzle.

Pink jokes: ‘This makes no sense, right? I mean, I’m an American, I believe in free markets… If you want people to perform better, you reward them. Right? Bonuses, commission, their own reality TV show…’

The Nightmare Scenario

Imagine an organisation that pays higher than the industry average and offers a better benefits package and more annual leave. Surely, that organisation would have higher productivity than the industry average? And surely, that organisation would attract and retain the best performing individuals in its industry?
What if it didn’t? I could show you an organisation or two where the exact opposite is true.
They pay more, reward better and have lower productivity, higher sickness absence, lower performance and, whilst staff retention is relatively high, they struggle to attract and retain the best players in their sector.

So, what’s going on?

Pink goes on to recount experiments done by Dan Ariely at MIT, where people were again rewarded for their performance in a range of games and puzzles. ‘People offered the medium rewards did no better than people offered the small rewards… people offered the highest rewards… did the worst of all.’

There’s clearly a point up to which monetary reward for good work matters. But, I know from personal experience that it’s not everything.

When I was earning the highest salary of my career, I was the most miserable. I was demotivated, frustrated and unhappy. This might have had something to do with it. Yes, I am still sore about the table. But, there’s something in this worth exploring.

Beyond the carrot and stick

Pink is spot on when he points on that ‘there is a mismatch here between what science knows and what business does.’ Science is starting understand that people’s motivations are much more complex  than the ‘sweeter carrot’ or the ‘sharper stick’ can deliver.

Everything in my experience tells me that this is absolutely right. I was part of the team that set up the welfare to work business in a large outsourcing company. I was given a tonne of responsibility, lots of autonomy to deliver and we were very clear that we were there to get more people back into work than ever before. I’d never had more pressure in my career, but I had lots of agency, I was learning new stuff every day and I felt like I was part of something much, much bigger than myself. I’d never been more motivated.

A new operating model

Pink distils this into three elements around which a new operating system for our businesses should revolve around:

1. Autonomy – the urge to direct our own lives
2. Mastery – the desire to get better and better at something that matters

3. Purpose – the yearning to do what we do in the service of something larger than ourselves

So, questions for us to think about as we go about our business this week.


Does your organisation give its people any or all of those three things? How does it do that?
If the answer is no, what would your organisation look like if it did?
And what could you do today, no matter the level you work at, to gain more autonomy, more mastery and more purpose in your work?

It’s where you and your business will find the biggest gains in productivity.

 I’d love to hear from you in the comments below, on Twitter or on LinkedIn.