Monthly Archives: February 2011

Through The Productivity Prism

From the Crucibles of JPS Consulting
Just Plain & Simple
….. Helping Realise Potential

TRIM Update ….. A Showcase of Industrial India, December 2010

Every organisation is searching for ways to enhance productivity. With ever increasing competition, costs and complexities, survival of the fittest (slimmest !!) becomes the norm and hence, the demand for higher productivity from all resources – people, material, time, money …..


‘Cost cutting’ ends up becoming favoured buzz words (with the recent recession, probably rightly placed too) in almost all organisations ….. ‘Do more with less’ kind of slogans finding a prominent place in corporate presentations. While there is absolutely nothing wrong with these as guiding principles for operations, neither of them yield the best outcomes without an understanding of the organisational context. Hence, for example, while ‘frivolous’ expenses are definitely not desirable, cost cutting can add to productivity only to the extent that it cuts flab. Beyond a limit, you ‘ cannot cost cut your way to glory in productivity ’.


Economics is the science/art which studies human behaviour as a relationship between ends and scarce means which have alternative uses – Lord Robbins.


This is probably the most useful and practical principle that can help in productivity increase, if understood well. The subtle meaning captured in this definition throws open the spectrum of possible ways in which organizational resources can create an impact. Alongwith the following statement by Archimedes, it provides a robust model for productivity increase.


Give me a lever long enough and a fulcrum on which to place it, and I shall move the world – Archimedes.


Productivity, in its very simple mathematical/scientific form, is a ratio of output over input. Or in business context, Return on Investment. This can be depicted as a product of (A) Profit/Sales & (B) Sales/Investment. These ratios dance in a colourful spectrum when viewed through the prism of organisational context !! Robbins and Archimedes together provide the canvas and brushes respectively, with which to paint organisational success.


A statement like ‘Do more with less’, breaks up into multiple hues, when passed through The Productivity Prism of organisational context. These are :


1) Do less with much less

2) Do same with less

3) Do more with same

4) Do much more with more


On the spectrum from 1) to 4), are choices available to organisations operating in different situations ….. a shrinking/contracting scenario, holding ground, marginal growth or a high growth environment needing investments !! In situation 1) above, if input is reduced in a manner that output is not reduced to the same extent, the resulting ratio of productivity still ends up being better. The same ‘mathematical’ logic applies to the other three cases as well.


However, in the absence of human intervention, these are ‘passive’ mathematical ratios. In business, there is the option of ‘managerial’ discretion and ‘free will’, which can influence the way these ratios behave, rather than being handed over in a ‘fatalistic’ take it or leave it manner. Understanding and picking the Right ‘shade’ can make all the difference. The palette thus exposed by The Productivity Prism can be used suitably to come out with flying colours !!


Robbins helps when you understand the ‘Core Customer Deliverable’ and ‘What in the Value Chain adds most Value to The Customer’ ….. in the allocation of scarce means (with alternative uses; and mind you, organisations always have finite resources) for an optimal outcome. Archimedes helps by pointing out that unless the ‘leverage ratio’ is calibrated and fixed well, movement at the other end of the organisational ‘lever’ will be sub-optimal.


As a child, I used to play with fractions and found some really funnily (and enlightening) different ways in which ratios behaved depending on whether their values were >1 or <1. As a simple illustration, just try adding and subtracting the same number, to/from the numerator and denominator of two ratios, one >1 and the other <1 ….. The direction and quantum of swings in their values are really interesting !!


While the canvass and brush are provided by Robbins and Archimedes and the palette is made available through The Productivity Prism, (I dabble in oil painting sometimes, with the output, as per my children, of the type from the dyslexic child in Taare Zameen Par !!) the only thing that one now needs is a thinner to dilute the paint to the right consistency, so as to be able to get the ‘Right Flow and Application’. Expertise in tools for proper prioritisation of issues at hand, understanding cause-effect relationships between various parameters and risk analysis can provide the right ‘consistency’ to enable ‘A Smooth & Graceful Flow’ in decision making with Optimal Innovative Solutions in the pot of gold at the end of the rainbow ….. leading from complexity to simplicity ….. The Justplainandsimple Way !!


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