A Cooperative Formula for Increased Productivity

Productivity has slowed in growth this past year, gaining a modest 1.6 percent increases in the third quarter. Experts worry that a lag in productivity reflects limited economic growth, signaling a dangerous dive for the U.S. economy. The Houston Chronicle summarizes debates around the corner:

“Economists are struggling to explain what’s happening. Liberals blame growing income inequality and stagnant wages. Conservatives blame a lower quality workforce, government policies and a misstatement of the problem. A more independent view hypothesizes that we are seeing diminishing returns from new technology for the first time since the 1800s.”

Despite disagreements among economists about the cause of a productivity slump, a survey of economists conducted by The Wall Street Journal last spring found that 94% of economists believed a big decrease in capital spending had a “large” or “modest” impact on productivity lags. Without innovative equipment and modern supply chains funded by capital spending, workers can’t keep up with a healthy productivity growth rate. WSJ created this graph to visualize the productivity rate since the 1950s:

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Leaders need to ask, “Is it really in their personal interest to cooperate or not? If it isn’t in their best interest to collaborate, why would they?” By emphasizing the positive possibilities born of cooperative innovation, he suggests leaders look inward toward their processes to produce meaningful productivity changes:

“We need to create organizations where it becomes individually useful for people to cooperate. Remove the interfaces, the middle offices — all these complicated coordination structures…Remove most of the quantitative metrics to assess performance.”

Rather than measure performance by individual success, simplify corporate structures to increase engagement and foster cooperation with his six simple rules.