The Productivity Crisis: Analysis and Solutions

Library Info


It has been noted by many commentators that we, in the UK and more generally in the West, have a productivity problem. No matter where you look, it seems that somebody has decided we should be producing more with the systems and processes and procedures that we currently have.

But, how can this be, with technology so cheap and available, education is so available and the Internet provides us with an unlimited amount of information. There must be something else going on.

Let me suggest you that part of the Internet problem is that there is so much information available on the Internet, there is a lot of energy and time expended to gain access to information. This coupled with the fact that when you don’t know something, it is very had to understand what it is you don’t know and then to sort that out from the poor quality and, the people who have simply put down their first and superficial understanding of a topic into a blog post and acted as if that were the definitive answer on the topic. This will slow you down and make the task slower, and more complex, but usually, this can be bypassed simply by going to a reputable source. The problem might well lie elsewhere.

Then let’s look elsewhere.


Suppose that in the decades that followed the introduction of the PC into general business in the 1990s. That there has been a serious lack of investment and innovation in the intervening years. Not in the hardware, PC, server, mobile and networking systems and processors have come a long way. The hardware people have done an outstanding job of pushing things forward. No, I am thinking of the software side, where things started out very innovative and then began to stagnate. Let’s explore this a little further.


What if instead of investing the money in productivity tools, money was invested in frivolous and superfluous activities. The case in point rather than developing productivity tools, we have things like Snapchat so that we can chat with our friends. Instead of developing software that will automate a process or procedure we have time and money spent developing Facebook or Facebook messenger. How is any of this contributing to productivity?

What if we take this stage further, how much venture capital money was given to Uber so that they could create an app which would enable people to bypass the time-consuming activity of phoning for a taxi? What if all this money had been used for productive activities? Would we be able to produce more with the technology and the resources at our disposal?

I’m going to answer this with a yes, all those hundreds of billions of dollars could easily have been spent on productive activity but all that investment was spent on making people’s lives more pleasant. Now, I’m not against peoples like to be more pleasant. But, what I am against is the huge waste of money, effort and talent which produced nothing terribly useful.

What if all that money, effort and talent had instead been used to make the world more productive? Where would we be? How would the world be improved? How would your free time have been made more available to you? Would your life be better now than it currently is and perhaps as importantly, could you measure it?

Once again, I think the answer is yes, each time we give up some productivity for something that seems like making life more pleasant, then what we’re doing, in practice, is sacrificing our own future. It should be completely clear to you by now that each one of these frivolous applications that have done nothing to boost business productivity or make life better for people having fact cost of huge amount of benefit. In business, this is often referred to as the opportunity cost. Every hour that is spent pointlessly working on something that could’ve been spent more productively, is another hour wasted. I’m not referring to using your lunchtime to interact with friends, I’m looking at the bigger picture. If you want to make a difference, then a perhaps a philanthropic activity will help. What matters is the time the people spend doing what they do. If you want to spend it at work doing things that machine can do for you, then that’s fine. But if you want to spend it with your friends, your family and doing other activities that you enjoy like hiking or flower arranging then surely it is much better to spend that time doing those activities and using automated systems, processes and procedures to take care of all the difficult work particularly if that work is tedious and repetitive.

How did we get to where we are now? Let’s take a little look-back at history. In the 1980s we saw the adoption of the personal computer, this enabled people to take a document, or letter if you prefer, and edited which meant we did not need to create a new document every time we wanted to make a change. This took the process of typing a single letter and retyping it to make changes and extended it into a process of write once and edit many times. This, in itself, provided a huge boost to productivity. It cost thousands of pounds or dollars to buy the technology to make this possible. However, once this technology was in place within the business it was very quick and easy for someone to reproduce the work of others quickly and efficiently. This meant that one person could do the paperwork of 4 to 5 people, it’s as simple as that. This is a productivity boost.

However, fast forward to today (May 2017) there has been very little change in the tools that are available to the average business person. While these tools have been refined significantly and the functionality increased, there is no fundamental difference to the way they behave. Take an example of Microsoft Word or Excel. Microsoft Word can be thought of a simple piece of paper; Microsoft Excel can be thought of as a simple piece of the squared paper. As business tools these will get you so far, if you then extend Excel or access for the database functioned you can send you at more advanced activities like Mail Merge. However, this only get you so far and now everybody else is using such tools, they gain you very little additional benefit. You might find this yields only a small benefit as you probably have very little use for Mail Merge.

Next Step

The next stage of productivity, is to use these tools in conjunction with other data sources. This might or might not be useful to you as a business. Most businesses struggle at this point, as the hurdle, of integrating multiple data sources into the somewhat primitive applications becomes more problematic that it’s worth. This is where businesses tend to move to the custom or semi-custom solutions. Let’s take an example, how an independent financial advisor might utilize Microsoft’s business productivity applications. Let’s take a specific instance and use Excel to facilitate the tracking of their clients’ information. In practice, this solution is little more than using a grid to track activities against client activities. Ultimately, this solution fails, because as the information crosses the “simple” threshold, it becomes too difficult to track in this manner. What they need, is a piece of dedicated software that was designed for exactly this purpose, it tracks how far that the client is through the process and that enables the client and by extension the Independent Financial Adviser. This tracking is of course vitally important to the running of the business. Without it, the business is limited in the amount of work they can take on, because they are limited in the amount of information that any one person can keep in their head. But, with an automated system that leverages technology, the business can grow much faster and much more capably, because the individual is not managing the information, the system is managing information. The process needs of the business can grow without limit, providing, that the systems implemented and maintained correctly.

It is this fusion of business process, semi-custom or custom software coupled with the tools, processes and procedures that the company uses with training, they can produce something far beyond the ordinary. By doing something special, it enables them to complete effectively with other businesses of similar and larger size, which makes them far more productive and therefore, profitable. It is then much more straightforward to take on additional staff, to drive the bottom line and add additional value-added activities. more staff members, in turn leads to many more satisfied clients. It is this fusion of people and machine that enables businesses to march forward and produce something that would not be possible otherwise.


How technology can be utilized, is a business specific activity. The details will depend upon the task to be tackled and, upon the resources and the attitude of the business in question. What forward-looking business, the easier it is for the business to leveraged technology and integrate i into their business development plan(s). Ensuring that the business expansion plan and revisions to both the business and for the personal growth of the employees are aligned is essential to leveraged the benefits both the machine, its automation and the people. There is nothing or nobody better at liaising with other people than people. The machine is much more suited to dealing with the exact specifics of that details of the process. Once the process has been automated it is much easier for people to deal with the people, and that is the parts most suited to automation are let to the machine. The goal is to leverage the skills of the people and are most suited to the machine. To make the best use of the available skills, be they human or machine, and we can always update the skills of either through training or through new software.

How can you make the most productive use out of the software, hardware and the processes and procedures that are available to your business? The answer is easy, you need to make sure that you speak with the right people, that is someone who can help you by extracting the key parts of your process. That is the part that can be automated, separated from the parts that need to be done by the person and most importantly able to produce a system that will work effectively as your business grows into the future. The one thing that you can be certain of is that you will be growing into the future. This is because, as the routine and the drudgery is removed from your staff, they will have far more time, energy and opportunity to do things that matter, that is, add value to your clients. Adding value to clients is what matters to the client and therefore, the business. That is why they come to you, and that is why they pay you. It is the reason you are in business.


To summarize, the tools that most businesses use for productivity, are obsolete. Rather than using standard off-the-shelf software, a business must be now using a custom or semi-custom solution that leverages the common off-the-shelf software while utilizing business specific software where needed. Yes, it will cost money to have the software developed or customized to be exact needs of the business. But how much is that worth, if a piece of software can do the job of 2, 5 or 10 people? I would suggest that it is worth literally hundreds of thousands of pounds! What is a person worth per year? The average salary in 2016 was £27,000, obviously, his will vary around the country, so we know the minimum cost, their worth must be more than this. As soon as you look at it in this light, if a software package is good for three years, then to just do the work of one person (with an average salary of £27,000) then it is already worth £81,000 (minimum cost of the person). Now consider that the impact will be much greater, as it will standardize processes, enable faster expansion and drive down re-do costs. This means that the software package at this price not only was it a good investment, and it was cheap. How fantastic would that be, and spend a few pounds and if you could then make tens of pounds. Spend a few dollars, and make tens of dollars. This sounds like a perfect win-win for all businesses. Invest a little bit of money and return much more money. This is what a business must do, and we can no longer rely upon other companies or venture capitalists to be looking out for our interests. What we need is for them to ignore the trivial needs of the consumer and focus on the needs of business, this is the only way that society can specifically and in general make money and recapture our collective ability to generate more wealth.


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