September 6, 2008

Killing Productivity -- Good Work vs. Good Worker

There are many enemies of productivity in the workplace. Email has become one of the biggest and certainly most talked about distractions from the work we have to do. Other natural enemies include office gossip, unclear direction on tasks, poor management and bad fit for the job.
However, one enemy that strikes me as the biggest waste of time and energy is poor quality of work. Being involved in some action, production or work that is not up to the standard necessary has a cost. This usually means that the original work must then be redone. As Vice-President of the American Society of Training and Development, we found one of the biggest causes of poor work is limited or non-existent task training in the first place.
There you have the central issue of the death of productivity. Because when the product is crap, everyone knows it and eventually, it must be done over correctly or suffer the judgment of your customer. And what a cost that is.
As we say, you never get a chance to correct a first impression and here is one that proved that saying as correct. In fact, their mistake inspired this blog.
I had just received an elaborate mailing on the value of direct mail from the United States Postal Service. It was quite an investment on their part. A big cardboard mailer was overflowing with an oversized fancy brochure, a neat T-shirt and an enthusiastic letter from the Post Office manager of Creative Marketing. After all this investment, the letter began with my name misspelled and ended with the “free” T-shirt two sizes too small.
Over the years, I have concluded that not doing something is better than sending out something poorly executed. If I was making a decision about using direct mail, how persuasive would that Post Office appeal be to me? Why would I believe that my promotion would be any better?
Our current love of outsourcing has some unforeseen costs as well. As companies rush abroad to cut back-office document processing costs, one fact often gets forgotten in the fray. Costs of small increases in error rates are enormous and can easily wipe out cost reductions from cheaper labor.
A data-entry error in a document such as a loan application may make it impossible to process the document automatically, incorrect loan documents may be created, the end customer may call with complaints, and there might be soft costs as well. BeyondCore’s interviews with more than 50 financial services firms showed that if the data-entry associated with one document costs $1, the downstream costs incurred for one document with a data-entry error can easily add up to $300. This means that if outsourcing increases the error rate by just one-tenth of a percentage point, the resultant costs wipe out the benefits of a 30 percentage point reduction in labor costs. Thus, in back-office outsourcing, quality is 300 times more important than labor costs. (
Take a closer look at the quality of the work in your organization. Set up a program on QC on the materials or work you produce. See the relationship between productivity and profit.
When quality is in place, I find that good quality produces good sleep.

No comments: