Published on January 23, 2018 @ 4:01 pm

News Goldilocks and the Productivity Bear

What to expect in the evolving workplace and productivity in the U.S.

By Julian Phillips, EVP, Whitlock
julian@whitlock.com
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As Janet Yellen prepared for her retirement as the Chair of The Federal Reserve, her legacy was already being defined by the financial press touting that the US would sustain “Goldilocks” status well into 2018 and beyond. According to all indicators, the markets are strong, interest rates and inflation checked, corporate profitability and global economic recovery are all underway. Surely as her likeminded fictional heroine also discovered, there was nothing to be gained by blowing hot and cold, everything about “just right” would do just nicely. This surefooted confidence has encouraged the “bulls” on the New York stock exchanges in recent months, but lurking menacingly in the shadows is a “bear”, who could break up the furniture if we don’t get to grips with him, and his name is Productivity.

Whitlock-Modern-Industrial-1280x263

Data from the Bureau of Labor shows our overall business productivity growth is lower than any period since the recession of the 80’s, with wages growth and other indicators significantly below target since the troubled times of 2008. In other words, this data shows that despite all our recent advances with higher education, technology, automation and business process, we are not transforming the sustainable economy from old to new fast enough and the promise of higher living standards and meaningful work for everyone has not materialized, yet.

For those in the business of providing technology solutions to equip corporations for this transformation, these headline statistics might seem bleak, but like everything else in life, we must look at the context. Is it that “innovation” is failing to make productivity breakthroughs, or is it possible we are measuring the wrong things? Could it be that we have entered a different era where traditional “industrial” measurements of productivity are no longer relevant?

Probably the greatest period of industrial productivity advances was post war until the 1990s, typified by the Toyota Production System (TPS) which eventually morphed into “lean methodology” adopted by corporations the world over. Lean, emphasized efficiency, elimination of waste, process and departmental dependency. As a result, the workplace reflected this mantra; office space was designed to reflect industrial efficiency with columns and rows, everything in its place and everything with purpose. Technology was built to last and IT departments grew massively with system silos, ERPs and inhouse development. This was the Modern Industrial period.

Whitlock-Digital-EnlightenmentBut on January 9th, 2007, the World lurched into a new period, Digital Enlightenment. Steve Jobs’ announcement of the iPhone did more than herald the metamorphosis of Apple into the World’s most valuable company, it began a period which has dramatically changed the way people work both in and away from the office. Just as millennials were getting their feet under the mahogany tables of middle management monotony, they were handed a device and a way of life which gave them a platform to leap over their baby boomer brethren. Although teleworking had been around for a while, it had never delivered on its promises, but the Smartphone was the all-powerful and the workplace became centered around the concept “i” and “me”. Bring your own device, bring your own ideas, bring yourself and your 1400 Facebook friends to work. Like all other enlightenment periods before it, this was an exceptional time for invention; Startups took out behemoths in media publishing, personal transportation, retail, banking, hoteling and automotive manufacturing. Unlike the Modern Industrial period where productivity was measured in dollars and minutes saved, the Digital Enlightenment period will be remembered for staggering corporate valuations, both negative but more so positive; the acceptance of times gone by and the promise of things to come.

As we enter 2018, the productivity bear is making his ominous presence known in our traditional economic indicators. But perhaps we are in a changing state, progressing towards a new era where efficiency, invention AND proven financial models will measure corporate success. There are rapidly increasing signs that “execution” is the new watchword. Where once Apple was applauded for changing the way we act, Amazon is being rewarded by acting faster and driving a positive return. Are we entering the age of new technology adoption, where getting stuff done, and making best use of our resources, will drive corporate behavior?

Whitlock-Power-of-the-TeamThe Digital Enlightenment period highlighted the importance of attracting and retaining the best talent in the market, but with the pool becoming relatively smaller, perhaps we should focus on getting the best return from the talent we already have? On the premise that “it takes a village to…” and that richness and diversity of thought creates better decisions, maybe it’s the Power of the Team, that will finally unlock the conundrum of productivity?

The prevalence of team collaboration “to get stuff done” is not just within the office, but across the enterprise globally, with customers, vendors, partners and yes, bots armed with powerful AI and big data. The Bureau of Labor has yet to crack the code on productivity in this new era.

The implications for those of us that design office buildings, workspaces, furniture, connectivity, audiovisual and collaboration technologies are clear; we can no longer work in silos providing functional performance and expect to offer value.

So what can the marketplace expect to see more of over the next few years? Smart buildings and office environments for sure, everything on the network, lots of big data and sensors galore, but not simply because we want to reduce energy waste and save money (those are Modern Industrial measurements). The new hybrid work environments will draw people into the office or virtual environments to huddle, brainstorm, ideate, make bold decisions and take positive action. The “real time” measurements will not be “how many people attended how many meetings to start on time” but more of “what did we achieve today and what’s our goal for tomorrow?”.

Audiovisual and collaboration technology will be everywhere, but not because we want people to lock themselves away in conference rooms and watch endless presentations from the guy at the front, but because we want the whole team standing up, interacting with data, solving problems and acting with those in their space and with those remotely participating as one team.

And finally, we should expect to see the true fusion of the analog world (buildings, furniture, people) with the digital world (devices, connectivity and software). The days of functional performance (best building, best people, best device) are over; the days of integrated work flow and performance (best experience, best decision and best outcome) are here. This reveals the direction that Microsoft is headed with Teams and its Surface Devices (including the Surface Hub) and also Cisco’s vision with Spark.

With exceptional confidence, this will be the era of the Modern Workplace and perhaps this is where our archaic protagonist, Productivity, will achieve his “Goldilocks” moment and everything will be just about right.

Epilogue

Photo of Julian Phillips
Julian Phillips, EVP at Whitlock

This new era of teaming and a new version of productivity will also have businesses like ours driving new partnerships to achieve the Modern Workspace nirvana. We all need to get on board together to succeed, and make the work place fun, effective and functional again. This means the technology specialists, architects, workspace designers, furniture manufacturers, network providers, software companies and API developers should all get more comfortable in the same room, and on the same real or virtual chairs. This takes new thinking, new skills, new talent and no small amount of investment and management resolve to achieve results.

This revitalized focus on merging, teaming and solving our customers’ challenges will morph our companies from simply integrators, to potentially Solution Aggregators. And with all this and a bit of that, perhaps one day, we can lay that Productivity bear to rest.

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