Does Your Organization Drag? Three Secret Ingredients for Higher Productivity

Does Your Organization Drag? Three Secret Ingredients for Higher Productivity

 

Does Your Organization Drag? Three Secret Ingredients for Higher Productivity

 

Want to be more productive tomorrow? Zero in on your organization’s time, its talent, and its energy.

In their new book, TIME | TALENT | ENERGY: Overcome Organizational Drag and Unleash Your Team’s Productive Power, Bain & Company partner Michael Mankins and his co-author Eric Garton identify the specific causes of organizational drag – otherwise known as the collection of institutional factors that slow things down, decrease output and performance, and drain people’s energy.

The book claims that the average company loses more than 25 percent of its productive power to organizational drag. This is often an inevitable complication of companies getting larger and instituting more processes and procedures. According to Harvard Business Review, organizational drag costs the economy more than $3 trillion each year in lost output.

As Mankins told writer Stephanie Vozza at Fast Company, the most common processes relate to expense management. “At most companies, there are spending limits and audits, and employees are tracked,” he says. “At Netflix, however, there is no expense policy. The only policy is, ‘Act in the best interest of Netflix.’ The company is telling employees, ‘We assume you are not here to rip off the company, and we’re not going to put in place processes that consume human capital, waste time, and zap energy.’ They tell employees to assume their best judgment, and they can be more productive if they’re not held back.”

This, Mankins claims, is why companies like Netflix are 40 percent more productive and have profit margins that are 30 to 50 percent higher than industry averages. Apparently, most organizations start off with roughly the same number of high performers, but organizations with less drag produce far more every day – and the difference compounds every year.

One secret of companies with less organizational drag involves putting a majority of star performers on mission-critical projects that are essential to the business. Another relates to the development of inspiring leaders. As Mankins says in the Fast Company piece, Dell recognized the productivity difference between inspired and average teams. “Sales teams led by an inspiring leader are 6 percent more productive than those that have an average leader. If you extrapolate that 6 percent it accounts for an extra $1 billion in annual revenue.”

In the book, Mankins and Garton suggest the following strategies for liberating employees’ time, talent, and energy, and consequently eliminating organizational drag:

Understand Exactly How Time is Spent

Software is now available to track meetings and other activities that eat up staff hours. Because time is money, it should be treated as such. This means being vigilant about creating and sticking to time budgets, and practicing good meeting management.

Connect Everything to Your Mission

Make sure your “reason for being” translates into an effective employee value proposition and that your people are engaged and motivated by your mission. Help employees understand how their daily work relates to the big picture and do what you can to ensure that they “head in” as opposed to “back in” to work in the morning. This will be easier if you deliberately develop leaders who are capable of inspiring their people AND getting results.

Eliminate Needless Bureaucracy

Strive to create a high-autonomy organization without losing benefits of scalability and repeatability. Strike the optimal balance between autonomy and organizational needs, and ask yourself whether you have fallen victim to unnecessary processes, micromanaging, and overly prescriptive rule books. Count the nodes – or intersections – in your organization. Are individual employees empowered to make decisions, or are they held up by the number of nodes through which they must pass? Examine your operating model carefully, looking at structure, accountabilities, governance, and methods. Your goal should be to simplify wherever possible!

 

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