What is productivity​ and how can it be increased?

Every company wants to raise its productivity. We all want to raise our personal productivity. Most businesses understand the importance of productivity and believe we have a plan in place to do so.  We often assume doing more, producing more or completing more tasks increases our productivity. Despite sitting at the heart of competitive strategy, productivity is often misunderstood. We will define productivity and explain how it should be used to develop a strategy and manage the operations of a business.

Summary: Productivity is the ratio of the total value of output divided by the total input cost. A competitive strategy is a plan to deploy a competitive advantage to increase productivity. A company essentially pursues one of two strategies to increase productivity: focusing on the output value or focusing on the input costs. It is a common mistake to increase productivity in the short term by focusing on the wrong lever. The task of a COO is to organize the business to raise productivity by maximizing the lever the board has endorsed. 

Read more…