Podcast 30: How leaders can manage productivity

We spoke to award-winning HR consultant and author Tim Ringo to gain an insight on productivity in the modern workplace and how leaders can improve on it. Listen to the episode or read the transcript for Tim’s expert view on the topic.

As leaders continue to navigate the new era of work, they face new challenges. Factors such as extended periods of remote working and a lack of face-to-face collaboration can have a damaging impact on employee productivity.

In this episode of our Leadership Insights podcast, we were joined by Tim Ringo, award-winning HR consultant and author of the book Solving the Productivity Puzzle. Tim shares his advice on how leaders can engage, motivate, and develop their employees to improve both individual and business performance.

Podcast key timestamps

To start, could I ask you to please introduce yourself to our listeners?

(01:00) Sure, I’m Tim Ringo. I’m a former management consultant and software executive. I recently retired, or as I like to call it, pro-tired, because I’m still doing things like podcasts and writing books and those sorts of things.

I started out my career in Andersen Consulting back in 1990. Andersen Consulting is now known as Accenture. So, I was a management consultant for 25 years.

I was at Accenture for 16 years. I was a senior partner and was then recruited to IBM to be Vice-President and lead up their human capital consulting practice in 2006. I did that globally, so I spent a lot of time on an aeroplane.

I also wrote a book around 2006 with my co-authors, called Calculating Success. That book was about workforce analytics which was about ten to twelve years ago, so it was a little bit ahead of its time.

Then I joined SAP SuccessFactors as a Vice-President. So, for the last five years I worked alongside the SuccessFactors sales teams, helping SAP customers understand how to get the best out of their SuccessFactors system.

And, as you mentioned, I wrote my latest book which is called Solving the Productivity Puzzle. It came out in late 2020. Turns out it was really timely because everybody has been talking about productivity since the onset of homeworking. It also won the Business Book of the Year in 2021 by the Business Book Awards, so I’m really pleased with how it has been received.

What sparked your interest in productivity and led you to write your book?

(02:30) It was in 2016 when I was looking at a paper by the OECD. I guess I’m one of those sad people who read OECD white papers, but as you know, OECD is the world’s economic body. They do their big part in calculating gross domestic product both globally and then by country.

However, they put out a paper that was really pessimistic about the future. It essentially said that the average annual rate of GDP growth is going to be stagnant or decline over the next 50 years. That means that 50 years from now, we would be likely to have less prosperity and lower living standards than we have today. That’s the outcome of GDP going down.

Most of the reason for the lower GDP was people-productivity and they gave three reasons why there was an issue.

1. Organisations weren’t spending enough on aligning people to new technology
   That includes investing in learning and change-management as well as simply just explaining to people what new technology was being implemented.
2. Organisations weren’t adjusting their processes for digitisation
   This includes any digital organisations that were still using 20th-century processes.
3. OECD predicted that organisations weren’t going to change their organisational structures to take advantage of new tech.

So pretty grim, and I certainly agreed with those three things, but I didn’t see them as long-term issues. In fact, I saw the opposite, which is that companies are working hard to fix those three things. So, I thought it was overly pessimistic.

In response, I took an optimistic view and wrote a book about what I saw. In my book, I argue that the trends that were emerging then are not only challenges but also opportunities.

Really the main part of the book is focusing on, ‘how do we fix this?’ I’ve been lucky enough in a 30-year career to work with some of the world’s biggest and most successful companies. So, I’ve got to see what they do to create higher performing and productive workforces. Therefore, I focused in the book on the solutions.

When I read that OECD paper back in 2016, I thought “Wow, that’s a really pessimistic view and we really do need to fix this.” So, that’s what inspired me and that’s why I wrote the book.

What do you mean by the term “productivity” in real terms?

(04:52) Well, this is the immediate problem I ran into when I sat down to write the book. I looked up the definition of productivity because it had been 30 years since I was in business school. This is the definition I found just to show you how boring it is:

“Various measures of the efficiency of production. Productivity measures expressed as the ratio of output to inputs used in the production process, i.e. output for a unit of input.”

So, that’s very 18th-19th century. That’s people as machines picking fruit on a farm or producing widgets. That’s just not what work is like today when 70-80% of us work in offices. So, I thought, I’m going to have to redefine this to unpick the issue and I came up with the following definition for productivity:

“Getting stuff done that measurably improves the economic and human interest of organisations and society at large.”

I took that one-dimensional view about people producing things and said, “Look, it’s a broader thing.” It’s absolutely about production, but it’s the outcomes of those productions, the impact on the economy, the human interest, and then organisations, the society at large. You essentially had to come up with that new definition to have something to aim at that helped solve the problem.

And for me, there are three things underneath the definition of productivity.

1. The fiscal side
   The fiscal side is where you always must count the dollars and the cents and measure output per worker.
2. Engagement and an engaged workforce
   Engagement creates workplaces where people can flourish.
3. Innovation
   Engaged workforces figure out new ways of doing things. They come up with new products, new services.

So, you get this virtuous cycle of an engaged workforce that creates innovation, which creates more money and prosperity. That’s how I’ve defined productivity. It’s a broader, more three-dimensional definition.

What impact has the Covid-19 pandemic had on the world’s productivity?

(07:00) Those first three months in 2020, March, April, May, had a massive impact on the world’s productivity. It’s been centuries since we’ve seen, particularly in the UK, that level of productivity drop.

But in the following nine months, we dug ourselves out of that hole. In fact, because we were already in a situation where productivity was going down, we actually started to see productivity get back to where it was and beyond. People working from home, people working flexibly and people being innovative in how they work started to solve the productivity problem.

So, initially, the pandemic was a huge shock and a drag on, but the numbers indicate that we’re actually coming out of it better than we were when we went into it.

How exactly can leaders measure productivity?

(08:19) So, that new definition that I described earlier starts to measure several things. The old one just measured employee productivity in terms of the outputs that people were creating. In the new definition, you can and should measure things like your workforce’s satisfaction and your workforce’s engagement levels. These are things you can measure scientifically and put dollars and pounds to, so that’s the first thing.

The second thing is that when you’ve got that engaged workforce and they’re impacting positively on the organisation, you’re starting to get outcomes as well as the outputs. Outcomes are the things that drive what a business produces for its customers or for the taxpayers. So, you can make this direct link between engagement and people doing more and doing it better. Take it one step further and say those outputs together create an outcome.

For example, a high-tech company comes up with a new version of a phone that nobody’s ever thought of — like the iPhone was 15 years ago. They come up with this new thing that’s ahead of the market.

Essentially, a new advanced phone came to be because people saw a new way of doing things, a new product, something that people would want, and took that to market. There were outputs in producing that, but ultimately, you get that phone to the market, people start buying, it becomes the next big thing. That’s an outcome; a huge multi-billion-dollar outcome.

You want to measure the engagement, through to the innovation that it creates, through to the outputs, and then ultimately the outcome. That’s what we’re missing today. We’re missing all those pieces in between, but we’re also missing that the products and services we’re producing these days are sometimes ones and zeros. I think we have a real problem in measuring the outcome of those things.

Economists are starting to get better at, so we’ll be able to measure those ones and zeros, and real dollars and pounds and cents. But that’s how I see things improving in terms of us being able to calculate productivity levels properly.

Is the productivity puzzle becoming an even more important puzzle to solve as we’ve emerged from the pandemic?

(10:52) As Professor Paul Krugman famously said not too long ago: “In the short term productivity is neither here nor there, but in the long term productivity is everything.” That’s true because the only way that economies and societies grow and prosper is by creating ever more productivity. It’s the only way that we can see stock markets, profits and wages go up.

So, if you're a leader of an organisation in the public sector, your customers are taxpayers and it’s about how you effectively use those tax dollars. If you’re in the private sector, it’s about the shareholders. But increasingly it’s becoming more about what you’re doing for society in terms of prosperity, not just the shareholders. So, leaders need to recognise the link between that engaged workforce, the innovation and the productivity they create.

Business schools sometimes miss this aspect of productivity in the workplace. They miss making these connections and it becomes down to dollars and cents and headcount when it’s a much more complex picture. Real leaders understand that equation.

How important is it for leaders to really understand the individual motivations of their people in driving productivity? And how can they go about improving this understanding?

(12:34) Well, I learned this the hard way. Maybe not the hard way, but it took some time. 

In my career as a leader, as a manager, one of the things that I learned is I need to understand everybody who works with me and works for me. I need to understand my colleagues and my team, what motivates each one of them individually, both personally and at work. I need to help everybody to understand each other in that wa because understanding individual and team motivations allow you to do everything you need to drive productivity.

People have a desire to do particular work, and unfortunately, a lot of people end up in work that doesn’t fulfil that desire. Really, a leader’s job is to help people get to that job, do that thing that they’re good at and help them flourish in that situation once they find it.

So, your job as the leader is to move people around the deck chairs and get them in the right place at the right time with the right skills and help them develop from there. If you don’t understand what motivates them, it’s impossible to get them in the right place to do the right things.

It was trial and error for me. What I did going forward is I would always sit down with a new direct report or a new team and get to know each one of them personally. I would ask them directly, “What motivates you? What can I do?”

A manager cannot make an employee’s work a hundred percent about their personal motivation and what they’ve always wanted to do. But if you’re trying and you’re getting at 50% or 70%, people totally appreciate that and you’re going to get the most from them. So, it’s about learning to understand their motivations, listening, and understanding what they’re saying, and then really using that to help them flourish.

Do you think that people’s motivations have changed because of the pandemic?

(14:37) It’s anecdotal, but talking to people gave me the sense that a lot of people are stepping back. They called lockdowns somewhat of a near-death experience. In terms of this crisis, it must’ve been similar to how people felt maybe after World War II was over. It’s like, “Wow, I got through that somehow, and I want to think about how I live my life.”

I think you’re going to see a lot of people look at the manager and organisation they work for and say, “Is this really where I want to be and what I want to do?” Now, I think people want to work in places where managers have a high EQ and high empathy and took care of people during the crisis. They’re going to go places that match more of their personal values.

I heard a lot of people in 2021 saying, “I think I’m going to change jobs,” or, “I’m going to do things differently going forward.” The crisis went on for so long that I think it gave people time to think about these rather deep things, so I think it’s going to have a big impact.

What role does reward and recognition play in improving the productivity of a workforce?

(16:39) It’s proven that the way we do recognition and performance management today and how we pay people actually de-motivates them, it reduces productivity.

If you think about it, and this is what we’ve seen for over a hundred years, Western capitalism and organisations are set up like a dangling carrot stick. Companies promise fantastic bonuses if you produce more widgets and you do it faster and with higher quality and you can get a promotion as well. If you don’t do what they’ve asked then you’re going to be punished. That’s essentially how work has been since the beginning of the industrial revolution.

If somebody is on a farm or in a factory and you pay them a big bonus, they are going to pick or produce faster and they’re going to pay attention to the quality. But bonuses have a different impact on workers in a modern office environment. If you’re promised a bonus for your knowledge and expertise to produce something with your team, it’s easy to focus on the bonus more than the teamwork itself.

Daniel Pink, an MIT economist, wrote a book called Drive ten years ago that still has repercussions today. It’s really caused people to sit back and think about the whole idea of rewards and recognition. His data showed that for office workers, intrinsic motivation — why they come to work for you — is as important as the money. If you then put their focus completely on the extrinsic, which is the money and the bonus, you are cutting off half of the motivation and distracting them.

So, you’re seeing a lot of organisations, particularly after the 2008 financial crisis and especially in the financial service industry, get rid of those big bonuses. They created a situation where people focused on the money, took huge risks, and almost brought the whole system down. They moved more towards giving investment bankers shares of the company and that can change your thinking. Suddenly you’re an owner and you’re focused on the organisation growing and becoming more prosperous than a personal cash bonus.

Many organisations have started to mix non-cash rewards into their rewards to people because it takes the money off the table. Who doesn’t want shares of a growing enterprise? If you’re in the public sector, a lot of public sectors say, “Well, we’ll pay for your Ph.D” or other non-cash sorts of things.

So, removing cash bonuses helps people to focus on working as a team because there’s something at stake for everybody. That change has really come from his book. A lot of people said, “We have to rethink this” because we weren’t tapping into that intrinsic motivation.

What impact does high turnover have on productivity? Is it a good or a bad thing?

(20:05) So if we go back to the GE capital days of Jack Welch in the eighties, his view was that turnover is a great thing. You want people to leave your organisation, particularly if they’re on the lower end of the employee performance scale, and that held well until the 21st century.

However, the idea that you want turnover and you want to push people out has proven to be a false economy. The way we think about that has changed quite dramatically because we’re finding that turnover is extremely costly on many levels. First, thinking about replacing workers, the cost to recruit a person and to get them up to speed is very expensive these days. We also don’t think about the disruption that causes to the teams that person was in.

Jack Welch missed something when he said, “Certainly you can probably save some money by moving somebody out who seems to be low performing.” There’s probably some question around whether that was really the case in the first place anyway. However, you’re not thinking about the broader impact and you should pull out all the stops that you can. The leaders need to understand the motivation of the person and help them get to the right place and the right job at the right time.

When you turn that thinking around, it says, no, turnover is already a bad thing. So, in my personal experience as an executive, turnover is bad for organisations. You want to keep it as low as sustainably possible. If you need to, maybe move people into different positions.

However, you want to try to hold on to that workforce because of the costs, the disruptions, and the ultimate impact on productivity.

What about wellbeing and its role in productivity? What should leaders keep in mind about this?

(22:02) Well, it’s really interesting because when I sat down to write the book, I was looking at various trends and things that impact and improve productivity. One of the ones that I looked at and tossed aside was wellbeing.

I’m a Baby Boomer/Gen X, so I’m literally on the cusp of both of those generations. So, to a certain extent, I think my baby boomer part of me was saying, “Just work harder” and “What’s all this wellbeing stuff?” But my wife kept putting articles and papers in my hand and saying, “You really have to look at this. This is really important.”

Then I started doing a lot more research and I got the opportunity to spend some time with Arianna Huffington while I was at SAP and her Thrive initiative. I came out thinking, “Alright, wellbeing is in the top three things of the top 10 things that you want to do to fix productivity.”

So, it went from not even going to be a part of the book to one of the most important things when I did proper research on it. There are three elements that are important in wellbeing:

1. Physical health
   You should always do everything you can to help your workforce be as physically well as they can. Maybe it’s as simple as handing out water bottles. Drinking enough water during the day can improve your cognitive function by up to 20%. So, little things like that, or having a gym or offering health insurance can all help.
2. Mental health
   Mental health is just as big as physical health. In fact, after the pandemic, we’re suffering with more mental health problems than we do with physical problems. And of course, poor mental health tends to lead to physical problems.
   It needs to be okay to say in an organisation that “I am not well both physically and mentally.” That organisation also then needs to step in and say, “We can do some things to help you.”
3. Finances
   Financial stress has a huge impact on people’s mental health and then their physical health. So, it’s important that organisations can do something to reduce that stress around finances. Several organisations set up the ability to borrow money against your salary during the pandemic without ever having to ask your boss. That has a huge impact on people, to know they’ve got that safety net that they could get some money if they need it and not have to go begging.

So, these things are important altogether. You don’t really have wellbeing in an organisation until you’ve got those three things and then all the subsequent parts that make that up.

Are there any other elements of the overall employee experience that leaders need to keep in mind when tackling dips in productivity?

(25:30) In the past three or four years I’ve started to hear very senior executives and CEOs starting to talk about ‘digital at home, digital at work’. Meaning that senior leaders are seeing that at home, we have fantastic devices that make us highly productive. We have our Alexas, our smart refrigerators and those sorts of things.

We’ve got various things that make us super productive at home, but then you get to work and it’s like 1990 all over again. It’s a PC with a screen and a mouse and a keyboard. You don’t talk to anything; you don’t have anything that’s automated.

So, a lot of senior executives have started to consider if work should look like home in terms of productivity. Why don’t we have digital assistants for our people? Why don’t we have smart technology that does things without you even having to ask it to do it?

You’re seeing a big focus on the human experience at work, and that’s not just the human resources side of it, it’s everything. It’s how your boss interacts with you, it’s how the technology at work interacts with you, it’s how the entire organisation is set up to help you flourish. If you flourish, the organisation flourishes.

Senior-level people are realising that the human experience is so important and that everything in the organisation should be designed around the employee and the customer. Right now, most things are around the taxpayer or the customer. Now they’re saying, “No, it’s about the employee and customer or taxpayer, and we should design everything around those things.”

The senior executive mindset shift is huge, and for me, the employee experience is a big part of solving the productivity puzzle. You’re going to hear more and more about that in the coming years. I think the pandemic accelerated this shift too.

Can strategic workforce planning boost the productivity of a workforce? And how can leaders go about doing this effectively?

(27:46) Not only it can but it will and it absolutely does. You’re seeing several universities and business schools setting up whole degrees around strategic workforce planning because organisations are asking for that capability. Strategic workforce professionals will be the rock stars of the next decade and they are the core of the equation to solving the productivity puzzle.

Having the right people, skills, place, time and motivation is what gives you people-engagement, innovation, and performance. Top organisations that have solved the productivity puzzle do strategic workforce planning well. They don’t just do workforce planning for the moment, like this week or next week, they look into the future. They can look ahead eighteen months and say, “Based on economic conditions and supply and demand, we can see it’s going to look like this.” 

Companies like IBM and SAP that get workforce planning right will have a huge strategic advantage. To get your organisation there, you must understand that first, it’s the leaders’ responsibility to adopt this mindset. Secondly, there must be digitally-enabled processes put in place to allow this to happen. And third, you need to plug in technology to do it intelligently, using artificial intelligence and machine learning.

Notice that I put technology third on the list of importance for workforce planning. That’s intentional because it’s a mindset-first process. If leaders have this in their mind, then everything flows.

Strategic workforce planning does not sound sexy or exciting, but it’s going to be. It will be important for organisations whether you’re a manufacturer or a very large recruitment company.

What do you think the most productive organisations and leaders do differently?

(30:11) To summarise, I think productive organisations are very good at understanding the details of their workforce, starting with motivation. They’re very good at listening and they can deploy that workforce in the most effective way. They’re constantly changing to fit the workers’ aspirations and what the customer needs. They move people around like on a chessboard to get them in the right place.

For me, the most productive organisations have the right mindset and invest heavily in it. They don’t make it a one-off, it’s a constant investment, a part of doing business. These are the organisations that will do the best in this next decade.

What do you think are the three qualities that make a good leader? Do you think these qualities changed because of the pandemic?

(31:26) So for me, I think the three qualities of a leader are as follows in this order:

1.  A great leader has a clear vision and purpose.
   They know exactly where the organisation is going and what’s the purpose of that.
2. A great leader is a good communicator.
   They can articulate the vision and purpose of their organisation in a compelling way.
3. A great leader has a high level of emotional intelligence (EQ).
   They’re great listeners, they’re genuinely empathetic about human beings and people in society at large.

People with high EQ are going to gravitate towards work. A lot of that is going to be because of the pandemic. It was already heading in that direction, but the pandemic has accelerated this idea of leaders with high EQ.

These first two qualities of good leaders anyone can learn. While EQ is not so easy to teach, you can develop it over time. You can discipline yourself to be a good listener and show interest in other people.

I think the leaders who can master the three above qualities are the ones you’ll see emerge in the future. And I think they will be a big part of solving the productivity puzzle.