But it may be that the answer is simple rather than complex: that there was an assumption technology would improve productivity by itself without leaders having to do the harder work of reimagining how the organization should be designed and managed, as well as how processes, staffing and compensation policies and relations with suppliers and clients would have to change. Successful operations recognize that those human and technological innovations must work in concert to deliver real productivity improvements. JL
Rory Sutherland reports in The Spectator:
Many people today are working a 16-hour week (to) create useful economic value. The other 20+ hours in the office are spent supporting the informational, bureaucratic and administrative burden made possible by new technology. People in any organization have two motivations. One to create genuine economic value; the other to protect their continued employment. People in jobs where productivity is hard to measure will focus more on the latter.
In 1929 John Maynard Keynes predicted that by 2029 people in the developed nations could enjoy a perfectly civilised standard of living while working for 16 hours a week. His hope was for our precious hours of extra leisure to be devoted to such edifying pursuits as playing Grand Theft Auto and watching kittens skateboarding on YouTube. (Actually he didn’t predict that bit — he suggested we’d be listening to string quartets and attending poetry recitals but, hey, that was the Bloomsbury Group for you.) Today, however, not only has the work week stayed constant but, in direct contradiction of the theory, the better-paid now work disproportionately longer hours.
In 2008 some of the world’s leading economists contributed to a series of essays (Revisiting Keynes, MIT) discussing why Keynes’s dream now seems so wide of the mark. Between them, they furnished a number of competing theories. Some posited that people like working and that being busy now has the kind of social cachet that being leisured used to.
Some acknowledged that, contrary to economic theory, wealth is more about position than quality of life: we are rivalrous monkeys, and so cannot help comparing our standing to that of those around us. Besides, many goods such as prime property are necessarily scarce and available only to those who have relative rather than absolute wealth.
To these competing theories, I would like to add one of my own. My scurrilous suggestion is that Keynes was partly right, and many people today are working a 16-hour week. By which I mean that they spend 16 hours each week engaged in activities which create some useful form of economic value. The other 20+ hours in the office are spent supporting the monstrous extra informational, bureaucratic and administrative burden made possible by new technology.
If I am right, this would explain not only the apparent failure of Keynes’s leisure theory but also Robert Solow’s famous observation that ‘you can see the computer age everywhere but in the productivity statistics’.
Why has IT contributed so little to productivity? To understand this, it might help to understand that people in any organisation have two motivations. One is to create genuine economic value; the other is to generate a protective carapace of bullshit to protect their continued employment. When push comes to shove, people in jobs where productivity is hard to measure (i.e. most modern jobs) will always focus more on the latter.
Let’s suppose that in a low-technology office 75 per cent of activity is focused on supplying useful products and services and the other 25 per cent on self-serving behaviour masquerading as rigour. Now let’s suppose that technology makes the value-generating activity 50 per cent more productive over ten years. Wonderful! But what if, in that same period, the time spent on defensive bullshit (box-ticking, arse-covering, fatuous self-exculpating emails, the collection of ever more stupid metrics) expands by 100 per cent? You are back where you started. Under such circumstances you will see no net improvement in productivity, even though, had bureaucracy remained constant, we could have paid ourselves 50 per cent more or worked 33 per cent less. Chalk one up to Keynes. He was right. It’s just that, while IT does grow businesses, it grows bureaucracy more.
I defy anyone who has worked in an office over the last 25 years to write and say that my theory does not fit the observable facts. And it is what we should expect. When generating information becomes cheap, finding the information that matters becomes correspondingly more expensive.