Hearts and Minds

In Parsons's view there are two facets to improved productivity: the technical (systems, structures, technologies — "the minds") and the social (culture, quality of work life, organizational climate — "the hearts").

Instituting change means formulating a vision, defining core business, ensuring adequate resourcing and using change management principles to make it happen — especially when what is needed is very different from what currently exists. It takes leaders to manage those drivers. Unfortunately, the task is so huge that there is no quick fix or silver bullet, despite the persistent fantasies of all too many managers. "There has to be some integrated thinking to make it work," Parsons says.

That is where the systems view comes in. As Parsons puts it, chaos theory saw connections between academic disciplines, between the physical and the metaphysical, and between man and nature. Business borrows this approach to highlight connections between internal functions, customers and suppliers, organizations and community, and companies and the ecosystem.

However, measurement is equally integral to the business of boosting productivity, he says. You cannot turn information into knowledge without insights into, and understanding of, underlying causes — in other words, perception. And accurate perception depends on the effectiveness of the measurement process.

Since measures developed independently of the knowledge worker group are unlikely to be readily accepted, measurement practitioners must properly and actively engage knowledge workers in the construction of measures and special care must be taken to ensure that proper buy-in occurs, Parsons says. Meanwhile vision and strategy provide the overall direction the organization has to take.

"There are two broad facets to productivity," he says. "One is efficiency, and the other is effectiveness. Efficiency is about doing the right things. So at the level of a manufacturer, for instance, if you don't make the right products, no matter how well you make what you do make you're not going to be very productive. Efficiency is about taking resources, taking people, taking materials, taking energy, taking capital equipment, and combining those in order to generate the products and services that you have defined as appropriate in the strategy. Efficiency is about how well you do the things that you do.

"Vision and strategy outline the things that you ought to be doing in order to be a successful business. So that's, if you like, the effectiveness component. In other words, effectiveness is an output: looking at what you ought to be doing, what you ought to be making, what services you ought to be providing and what general direction that you're going. Efficiency is about how you marshal your resources, and combine them and utilize them in order to generate those products and services."

It has become commonplace to say it should become second nature for all decision makers to ensure their decisions deliver on the vision the organization sets out. But since that is not something managers tend to do well, Parsons says, the executive must involve them in the process of formulating the vision. If they don't, they risk promoting an attitude of "vicious compliance", where their team is so offside that they will do exactly as asked, however short-sighted, ridiculous or impractical.

Closing that loop is the job of the measurement system, which needs to provide a 360-degree view of the organization, including on the quality of work-life issues that determine employee loyalty. "There's a whole raft of things like supervision and pay satisfaction and so on, all the emotional things that impinge upon that. So your measurement system has got to give you 360-degree vision. It's got to look at all the things that are affected by the strategy," he says.

That is not to say that to adopt systems thinking means having to look at everything all the time. There is still abundant room for specialization, Parsons says. It is just that even when you are focusing on just one part, you need to be sensitive to the ways it connects with everything else, and how changing that one part can affect the functioning of the others. "Sometimes this means nothing more than asking the right questions. If we are treating an elephant for a condition of the trunk we must be careful at the end of the exercise to ask: 'How does the elephant feel?' rather than merely asking: 'How does the trunk feel?'

"Even the most basic of motor vehicles has a measurement system or control panel," Parsons wrote in a paper called "Vision & Strategy Formulation". "Many of us would not consider driving at all if this control panel were not in place. The speedometer gives us feedback on the effects of pressing the accelerator and whether we are exceeding the speed limit, the fuel gauge tells us how long before we need to visit a filling station, and the high-beam light reminds us that we are annoying our fellow road users.

"But we do not have to measure everything all the time. Most cars do not give automatic readouts of tyre pressure or outside temperature or battery condition. These are 'nice to know' but not crucial to our everyday driving. We just need to define that small number of key indicators that tell us how we are doing with respect to our goals and measure them regularly and consistently. Every organization needs the equivalent of our vehicle's control panel by having a customized control panel of its own," he says.