Friday, October 26, 2012

Redefining Productivity

As Seth Godin noted in a recent blog post, we are redefining productivity. I believe this is tied to the evolution of our economy over the last forty years.

1. Industrial Economy
Industrial economies are judged by throughput. Fewer dollars in; more product out. Successful companies are those that consistently lower production costs, whether through automation or lowering total fixed and variable (mostly labor-related) costs.

2. Globalization
Cheaper shipping and increasingly available workforces led to global outsourcing – again focused on containing costs even when it may impact quality control. Not surprisingly, the successful players are those that make the best decisions to take advantage of this new expanded (and cheaper) labor force.

3. The Connected Economy
Networked workforces, dynamic teams lead to a shift in focus.  Making the best decision about what to do next becomes more important. Finding the right dynamic team – and innovative thinking – becomes the key to success. You may not have the lowest cost offering; but you have the most innovative.

4. The UX Economy
With networked communication in our pockets, the consumer focuses on the best and most consistently good user experience. Successful brands focus beyond turning visitors into customers; they focus on turning customers into loyal brand advocates… by consistently being better than expectations.

Consider the rapid growth of Big Data as a multi-billion dollar industry dominated by the U.S. with technologies that allow the innovative development of new products and services using data research that years or even months ago could not have seemed feasible, are now not only conceivable but remarkably inexpensive.

In 2002 Zappos was an online shoe company that decided to offer great customer service. Today it is a brand known for good service that just happens to sell shoes (which Amazon bought for $1.2 billion).

A decade ago, the mobile phone market was dominated by foreign players, from Scandinavia to Southeast Asia. In 2007 Apple launched the iPhone and 2008 saw Google’s Android phone. Today this market is dominated by Google and Apple.

Productivity no longer has the same dictionary meaning as it did when viewed only through the lens of the Industrial Age. This is the Connected Economy – where information is one touch away. If I don’t like what I see on your shelf I will comparison shop and purchase it online, or look for friend’s reviews and recommendations. We have to start thinking in terms of value-added innovation, and provide an educated workforce ready to compete in that economy.