6 Waste-Based Productivity & Profitability Pitfalls

By Chris Majer, Special for USDR.

Contemporary management theory and practices have ill prepared us for calibrating our enterprises to be competitive in the modern business world, which is making tectonic shifts from even a few short years ago. Sadly, most business leaders are meeting these changes with puny, incremental or entirely misdirected responses.

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One critical thing modern leaders must do is develop a new way for them to think about waste—where “waste” is not a thing but an assessment or an interpretation. In other words, waste is not trash to be thrown out; it refers to the events, phenomena, experiences, and features that diminish our capacity to do what matters to us. In the business world, waste kills productivity and profitability. Wastes are particular to specific concerns and moments in time. What was wasteful yesterday may or may not be wasteful tomorrow. The wastes the business world has been concerned with for the last 50 years (e.g., scrapped material, wasted movement, wasted time, and wasted resources) were invented in the traditions of the Industrial Revolution, manufacturing, and mass production. We are no longer living in that world. We must now focus our attention on eliminating these six “modern” wastes – the new pitfalls of productivity and profitability, as follows:

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Pitfall #1: Degenerative Moods 

A mood is a predisposition for action. As human beings, we are always living in one mood or another. This is an inescapable aspect of life. We are mood-driven creatures, and our moods are the foundations from which we assess and move in the world. Moods come in a variety of shapes and sizes, but they all fall into one of two categories: generative and degenerative. In other words, they do (or do not) generate possibilities, and it is in the world of possibilities that new futures are invented. However, too many organizations today are in the grip of degenerative moods—with a workplace culture marked by some combination of distrust, resentment, resignation, cynicism, arrogance, and complacency. These degenerative moods can lead to a wide range of unproductive behaviors, which in turn consume or waste vast quantities of resources while leaders are forced to work around or attempt to correct them. Degenerative or unproductive moods are tremendous, yet invisible, killers of productivity and profitability. People simply cannot or will not perform to their potential when their work environments are negative, unhappy places to be. Yet contemporary management theory rarely recognizes the importance of moods and the impact they can have on productivity and profitability. While much has been written about morale, which is closely linked with mood, the current common sense has little to offer beyond motivation and engagement work, both of which have proven to be largely ineffective. Today, a whopping 71 percent of American workers are “not engaged” or “actively disengaged” in their work, according to Gallup. This means they are unhappy with their organizations, emotionally disconnected from their workplaces, and less likely to be productive. In fact, Gallup reports that employee disengagement costs American companies about $350 billion annually. Mood is everything. It isn’t the only thing, but it is everything, because if you don’t get this right, nothing else you do is going to matter. There is no structural or process change that can overcome deeply entrenched degenerative moods.

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Pitfall #2: Listening vs. Hearing
To truly listen does not mean merely hearing or paying attention. Listening is a specific type of active interpretation that shapes our realities. This largely unknown and certainly unrecognized skill is critical in the new business world. By blindly creating and/or tolerating working conditions in which people do not and often cannot effectively listen to one another, we kill productivity and profitability. This lack of listening can be the result of degenerative moods (e.g., institutionalized mistrust, resignation, or resentment), technology addiction (which can make it difficult for some people to actually talk to others), or a simple incompetence for speaking and listening. Regardless of the reason, if people are not listening to each other, accomplishing anything significant becomes extremely expensive, and making effective changes becomes all but impossible. According to the International Listening Association, more than 35 studies indicate that listening is a top skill needed for success in business. Yet, less than 2 percent of all professionals have had formal education or learning to understand and improve listening skills and techniques. Too many organizations today have created and tolerated a range of practices in which creativity, innovation, and the fundamental expressions of our thoughts and feelings about our work and our futures are ignored or spurned. This lack of listening is a tremendous source of waste.

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Pitfall #3: Bureaucratic Styles
To most people, bureaucracy is a bad word, synonymous with “red tape” and wasted time. Yet, despite the negative connotations, most companies still operate bureaucratically—insisting employees work inside of increasingly complex structures with processes and procedures designed to standardize or control everything. While this might have been the most efficient way to train assembly line workers during the Industrial Era, human capital is now the greatest resource for most companies. In other words, we’re paying people to think, to innovate, and to collaborate with others to produce the best possible results. You can’t achieve this level of performance if you attempt to dictate their every move with rigid policies and procedures. The fall of many of our great companies—including GM, Chrysler, AT&T, DEC, and a host of others—is a testimony to bureaucratic blindness. Unfortunately, contemporary management theory offers no alternatives to this style of organizing work and designing organizational structures. Current hierarchically oriented systems—no matter how lean and “matrixed”—are relics of the bygone era of WWII industrialization and manufacturing. In the new business world, bureaucratic practices are becoming increasingly dangerous. They not only kill productivity and profitability, they also kill the generative moods of ambition, confidence, and trust that are essential to building consistent competitive advantage.

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Pitfall #4: Worship of Information 
In our rush to “modernize” everything and make our enterprises more efficient, we have mistakenly come to believe that information is our most valuable commodity. But data and information are useless without human beings to interpret them. These days, computers can do just about anything—except think for themselves. But we have come to tolerate the illusion that the essential matters of work can be invented, managed, and sustained through the creation, storage, retrieval, display, and publication of information. Contemporary information systems are blind to many of the key drivers of productivity and have consistently failed in their quest to integrate the diverse operations of a company. By making information the priority, we have lost sight of its fundamental purpose—to enable the people to effectively address the concerns of their customers. Rather than attempting to replace people, our IT systems, processes, and products should be aimed at enabling the human cooperation, collaboration, and innovation that are essential to growing a business. No matter how impressive or “efficient” an IT system claims to be, it will never replace the passion, joy, creativity, and spontaneity of people—all of which are essential to generating competitive advantage. As people deal with the inadequacies, breakdowns, and sterility of most modern information systems, they find themselves unavoidably generating waste and unproductive moods. In fact, workers report wasting an average 42 to 43 percent of their time on the computer due to frustrating experiences, according to a study by researchers from Towson University, the University of Maryland, and Carnegie Mellon University.

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Pitfall #5: Suppressing Innovation
Thanks to the bureaucracy and lack of listening that exists in most companies today, we have created working environments that stifle the creativity, original thought, and innovation that make our human capital so valuable. As such, it has become all but impossible for many organizations to adapt to our changing business world. Simply put, an organization that cannot innovate is dead; the only things missing are the inevitable funeral and suffering along the way.  Many organizations confuse the occasional “lightning strike” of a new idea or product innovation with having a culture that fosters innovation. But for this to truly be the case, innovation should not be something that happens every once in a while; it should be viewed as a critical competence—a skill to be developed, fostered, rewarded, and embedded into the workforce. The greatest enemy of innovation is modern management. Contemporary management practices are geared toward ensuring stability and predictability, and avoiding surprises or “problems.” But innovation is unpredictable, even disruptive. Thus, in many organizations, innovators are largely suppressed for the sake of “productivity.” Ironically, this only kills productivity in the long run.

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Pitfall #6: Modern Indentured Servitude
Today’s world is one of sharp contrasts. As a society, we have more choices, opportunities, wealth, and prosperity than at any other point in human history. Yet, we are also more depressed, dissatisfied, and despondent than ever before.  In fact, more than 21 million Americans are depressed, according to Mental Health America, costing U.S. companies more than $31 billion each year in lost productive time. A key contributor to this malaise is our contemporary view of work—that it is an endless series of “things to do,” things which have commercial value for the enterprise but produce little or no sense of value for “me.”  As a result of the five wastes previously discussed, we have inadvertently created a kind of “modern indentured servitude.” We sell ourselves into service in exchange for a paycheck and have only fleeting “real” lives after or outside of work. In this modern malaise, many people feel like victims, trapped by their need to make a living, prepare for retirement, support families, and deal with modern life. We ignore, diminish, or distort the possible ways that work can bring meaning to people’s lives. To have our work be seen as nothing more than modern feudal toil saps all our strength and turns people’s working lives from a source of inspiration and contribution into a futile search for meaning. Those in senior-management roles may have trouble seeing or identifying with this phenomenon and may mistakenly assume it only happens in other organizations. The executive floors are largely immune from this and, at the same time, unconsciously responsible for it. They are the ones who design or tolerate the practices, processes, structures, moods, and measures that create it. One of the symptoms of this mess is the new degenerative mood of “overwhelm.” Resignation, resentment, arrogance, distrust, and cynicism have been with us forever, but overwhelm is a creation of our times. The narrative for emotion sounds like this: There is too much to do, too little time, and too many things pulling at me. I don’t have enough energy for this, and it is never going to stop.  Overwhelm and the resignation and panic it generates are great wastes and very effective killers of productivity and profitability. No enterprise can survive for long with an organizational culture that produces modern indentured servitude.

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Eliminate these modern wastes — Pitfalls of productivity and profitability — and transform your organization!

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About the Expert

Chris MajerChris Majer, Founder and Chief Executive Officer of The Human Potential Project, is the author of “The Power to Transform: Passion, Power, and Purpose in Daily Life” (Rodale), which teaches the strategies corporate, military, and sports leaders have used to positively transform themselves and their organizations in a way readers can adept to their own lives and professions.

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All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.