The three key determinants of productivity are physical capital, human capital and the rate of innovation and technological change.
Innovation is the implementation of new or significantly improved goods, services or processes, a new marketing method or a new organisational method in business. I prefer this broader definition over the old one that was based on research & development (R&D) and inventions because smaller businesses and non-R&D staff of larger organisations often feel that innovation is irrelevant to them.
To underscore this point, an American health-care provider reengineered its nursing staff shifts in one of its hospitals under the guidance of consultant firm IDEO. The team at the nursing staff shift project comprised a nurse, an organisational development expert, a union representative and IDEO designers.
The team successfully redesigned processes to reduce shift changes that resulted in higher quality patient information transmission and a huge reduction in changes over time. This innovation was not a new product or service, but a process within the organisation. Under the old definition, this would not have been detected by the “productivity radar”.
The success story at the hospital shows that innovation is an intentional activity, based on discipline and hard work. Innovating for productivity does not happen in an unplanned haphazard fashion.
Follow a 4-D process to innovate for productivity:
You have to observe and reflect on what is it that you would like to innovate for productivity. It could be a sales delivery process or a relook at existing products. Whatever the innovation area, three activities — observation, investigation and reflection — are fundamental to this process.
Detection demands critical thinking. As this is the fundamental process, data gathering is critical as wrong data will lead to incorrect innovative design. The team at the hospital project detected problems in the way shift changes took place. But instead of jumping to conclusions, the team took time to gather and analyse the data.
In this process, a team of designers need to come together. Based on information gathered from the detection process, the design team will have start innovating. The more diverse the team, the better the quality of the design, provided the information gathered is accurate and relevant.
Design tools such as visual diagrams, mind maps, flow charts and concept maps are helpful in this process. In the hospital’s case, the team brainstormed potential solutions.
At this stage, the design team builds prototypes for testing and should be prepared for failure. But from each prototype that fails, there should be valuable feedback to build the next and better prototype.
Prototyping does not need to be complex or expensive. The hospital team, for example, made a video of the prototyped services to learn from the experience.
In this process, the innovation is rolled out, but is not yet considered the final outcome. As the innovation is deployed, constant feedback is necessary to continually tweak it so that it is serves its designed purpose.
During the deployment process, measuring the impact is an important part of the process as it relates to managing productivity. Innovating for productivity is one of the key activities for business growth. However, too many companies either fail to grasp the importance of it or they fail trying to do it. This is because businesses innovate in haphazard ways and do not follow a strict disciplined method of innovation.
The holy grail of innovation is not about using famous methods and systems. It is about discipline and hard work. It is about using one simple process of innovation, and keeping your eye on the ball, your ears to the ground and your nose to the grindstone.