A report  by Fourfront Group, The United Workplace  and WORKTECH Academy

Since  the  2008 financial crash,  the  global  workplace  has  been trying to recover  from a steep dip in productivity. Companies have  searched for new  ways  to rebuild  the  rhythm of employee performance but  the past  decade has  seen patchy  progress in  raising  productivity  inside organisations around  the world. This is despite strong  research focus on the subject  and plenty of practical initiatives to effect change.

The  persistence of sluggish  workplace   productivity  presents a  puzzle that is proving hard to solve. This report  explores the parameters of the subject  by presenting the results and implications of a short international research study, which examines key factors and attitudes around  driving up performance in the global workplace.

A partnership between Fourfront Group,  United  Workplace  and WORKTECH Academy,  the  study  was undertaken with participants  from organisations in the UK, USA, Australia, South America and  UAE as well as via WORKTECH’s global network. ‘The Puzzle of Productivity’ report is intended by Fourfront to be the precursor to establishing an annual Forum on Workplace Performance. It is the opening shot in a debate that is set to run and run. We invite you to join the conversation.

1: Executive Summary

Our international survey recorded the top factor in influencing productivity, how companies measure and reward employee performance, and what plans are in store for the future.

The quality of leadership overwhelmingly impacts the level of productitvity in a company. More than half of the suvey named leadership as the most important factor in rising organisational performance. Less than a fifth of respondents named environment, technology or wellness as being the most important factor. Environment came second to leadership, but a long way behind on 18% of the survey.

Asked to name the best way to motivate staff to improve performance:

54% INSPIRING LEADERSHIP

14% A FOCUS ON WELLNESS

13% SEAMLESS TECH

Leadership is conclusively regarded as a dominant actor in raising performance.

Organisations continue to define performance in terms that belong to the industrial era. Hard metrics to define performance at work are not matched by rewards for employees who raise their game.

This is mirrored in the way performance is measured by companies – there  are  essentially  two camps.  One  camp  focuses on  financial performance; the metrics here  include profit, turnover, revenue generation,  share    price,   billing  hours   and   sales    targets.    The other   camp   concentrates  on   human   and   environmental  factors such    as   employee  engagement   and    satisfaction,    behavioural metrics,   values,    culture,   wellbeing    and    360-degree   feedback.

Despite  pressures on companies to use  all levers  to move  the  dial on performance

63% HAVE A DEFINED STRATEGY OR INTRODUCING NEW TECHNOLOGY

54% DONT HAVE DEFINED WORKPLACE STRATEGY FOR WELLBEING

44% DONT HAVE DEFINED APPROACH TO UPGRADING THE ENVIRONMENT

There is some evidence of a mismatch between how highly the work environment is rated in terms of raising performance (second among the factors) and a lower as a general factor in raising productivity but there is evidence of more planning ahead to install tech upgrades.

Althought wellness scores lowest among the factors to boost productivity and companies appear leat well prepared to introduce wellbeing   strategies,  the   subject has  some  of the  most  committed and  passionate advocates, indicating    this   is   an    emerging area      with     growth      potential.

Asked about their plans to improve organisational performance  in the future, the survey drew company responses    from     right     across the board.  Initiatives around wellbeing     featured   strongly    in the    mix,   including    rolling   out WELL standards,  exploring   the psychology of food  and  engaging a  workplace   happiness  specialist. Some wellness moves were linked directly to a more open, agile environment and to more IT training and support. The introduction of AI, VR and machine learning is on the tech horizon to raise productivity.

However, the largest set of the future proposals cluster around strategy and leadership. Plans include a focus on vision, agiliry, holistic leadership, mentoring, teamwork and changing the mentality of seniors managers. This suggests the current dominance of leadership as the key factor in organisational performance is unlikely to shift in the near future.

2: Commentary

Finding ways to boost  performance.

If  productivity  is a  puzzle  to  be  solved,  then leadership and  strategy   need to  make  new connections between space, tech  and  people to find a way forward.

Leadership holds the key to better performance

The  survey  revealed the  primary reasons why strong  or inspirational leadership is seen by   companies as    the    most    important    factor in influencing organisational performance. As one company explained:   ‘Without  good leadership,  all  the   other   factors are  irrelevant.’ Effective leadership creates the trust, develops the strategy, sets the direction and empowers the  people to  execute business decisions, according to respondents.

Commenting  on the results, Dr Kerstin   Sailer,   Reader    in   Social and  Spatial Networks  at University College London, explained: ‘Leadership  is  a  catch-all  phrase.

Like culture, it is a way of doing  things, including how much  value   you  put  on  people,  what  spaces  you provide and what technology you give to people.’

Dr Sally Augustin of Chicago-based Research Design Connections observed:  ‘’I’m  not  surprised that leadership trumps  all else.  Take a  look  at  how  start- ups have done  phenomenal things in garages. You can successfully   put  across   management practices even when  the  physical  environment is not  reinforcing  the message.  But workplace  design  is nevertheless  part of the  package that influences  how people think and behave. If the office is rundown,  it suggests managers don’t care.’

Indeed,   there   was   some   support   for  environment, which   came    ranked    second  among    the   factors.

As    a    healthcare   company     told    the    survey:

‘We’ve tried to create an environment where  people can  enjoy  where  they  are  all week  because  they spend so  much  time at work. So, if  they  want soft seating  or  to  work  outdoors,  we’ve  given  them a   more   comfortable    environment   to   get   their stuff done.’

There was also support  for treating the full range  of factors equally and holistically to raise performance:

‘It’s a blend  of them all. It’s a symbiotic relationship between them…the whole is greater than the sum of the parts,’ said one company.

But   if    leadership  seems   to   hold   the   key   to unlocking productivity, this position is not without its challenges. ‘There is currently a crisis of leadership in terms  of legitimacy, trust

and  credibility’, according to  Professor James Woudhuysen of London South  Bank  University. This is undermining medium-term planning in businesses  because  the ‘rhetoric    of    leadership’ is not  being  matched  by deeds, resulting in slow business investment. Woudhuysen believes new-generation managers are   required   to  respond to  the  psychology of the office, which is moving much faster than either technology or design.

 

Measures struggle to move beyond the industrial era

The     survey     revealed    a    hard- edged preference for measuring productivity    in   terms    of   output and  profit  that  still belongs in  the industrial age.  Softer factors such as workforce  satisfaction  scored lower. As a  traditional  fragrance company told the survey: ‘Today performance is still based on  the  old guard  way of money.  We are  not yet ready  for wholesale change…an  employee  is still measured by his yield.’

Commenting on the survey results, Rachel Cooper, Distinguished Professor  of  Design   Management and  Policy at Lancaster University in the UK, described ‘an old-fashioned and mechanistic idea  of productivity and  what  work  is  about’.    Cooper also referenced Maslow’s Hierarchy of Needs: ‘It all comes down  to the basics   of  the  organisation  –  what can  be  measured, how many things you’ve sold, what money you’ve brought in. Only when you’ve served the basics can you move up the pyramid   to   employee   satisfaction and wellness.’

Professor James Woudhuysen described the productivity measures as  ‘a reality  check   –  engagement and wellness may be the new buzzwords   but    that’s    not    what the Stock Market measures. What really motivates companies is shareholder returns.’

How companies reward employees who  raise  their  performance appears   less    hard-edged   and more   balanced  than   the   metrics of  measurement.  Financial incentives  are given by three  in ten companies (‘you get  what you pay for’ explained one respondent); but this factor was narrowly outscored by    communication   and    praise. As one  company  told  the  survey:

‘Praise is perhaps the most under- realised benefit.  If you praise  your people when they do a great  thing or have a great idea, you will foster more of it. Pay and  rations is just a ticket to the dance.’

Another  organisation commented:

‘People are rewarded by seeing positive behaviour and success stories  from around  the  company. Our website has great  stories about…company accomplishments such as quality awards and reaching sales      quotas,      to     community impact   and   how  we   give  back.’ Indeed      human,      environmental and community factors register alongside the standard financial metrics in productivity measures described in the survey.

 

Technology is easier to upgrade than productivity

The survey showed that more companies have a defined strategy to upgrade technology than  to redesign the office or introduce wellness  initiatives to improve employee   performance.    As    a law firm explained:  ‘Technology underpins everything  we do so needs to  be  in top  form and  at the cutting edge. Users quickly become frustrated  by poor infrastructure    and   will  perceive the environment to be  failing if connectivity is poor or limited – often overlooking  everything  else, which may be perfect.’

For many companies, the focus on technology is  due  to  frustrations with current  IT. ‘Our IT process  is very slow and  cumbersome.  This is actually  keeping us  back,’ said one     respondent.     Commenting on  the  results,   Dr  Kerstin  Sailer of University College London explained:    ‘Conceptually,    we’re

well prepared for tech changes because we  can  see how laptops quickly  get  out  of  date   and  how it  is  difficult to  attract   the   right people without  the  right  IT.     But expectations     around       physical space  are   less   well  formulated. The  environment is viewed  as  for the long term. A wall is meant to be there  for 30  years  – most  people don’t think of space as  something we  can  hack  or adapt  to  make it more useful.’

Attitudes  may  be  changing however,  with tech  as the  catalyst. As  one   company   observed: ‘Our workplace   is a  living organism  of technology  that   our   people  live and work in. We are continually “hacking” our building to get  more out of its technology.’

 

Wellness lacks definition but has passionate advocates

Wellness emerged from the survey as  the  least  defined   of the  cited factors in influencing organisational performance,     with     companies least   prepared  to  introduce wellness  strategies compared to tech   or  environmental upgrades.

‘People  are  not  sure  how  to take wellbeing  forward,’ observed Dr Sally Augustin of Research Design Connections.  This view was reinforced by one respondent who simply said `I don´t know what this means´

However,   for  all  the  current fuzziness  around  the subject, there is good  news  in the  passion and advocacy that wellness increasingly appears to generate inside organisations. Survey respondents referred enthusiastically to a raft of new  strategy  initiatives that  cover ‘personal, emotional, physical and financial wellbeing’. These range from  WELL certification,  health awareness, agile  working,  proper diet and hydration to work-life balance,   mindfulness,    mediation and even  pet therapy.  Thus augurs well for the future in terms of wellness gaining momentum as a lever  to  raise  productivity  instead of fading from view.

Wellness  is also  closely  linked  to the   physical   environment,  which can affect people’s health and well being in both positive and negative ways. One organisation introduced ‘open   plan  in  our  Boston   office- the  first year  everyone loved  the novelty, now  people struggle  with the noise.’ Another firm ‘installed sit- stand desks to every position in the new  office’ alongside unassigned desking and more collaboration spaces.

This approach was explained as follows: ´We want users to be happy and healthy – and happy and healthy people create the right environment´

Design can unify future plans full of disconnected initiatives

Asked to map out their plans to improve employee performance in the  future, companies described a wide range  of ideas  and  initiatives – many of them linked to wellness but most linked to strategy and leadership. These generally reflected more enthusiasm for individual  disciplines   rather   than for joined-up  thinking that bridges across    the   silos   of  IT,   HR  and facilities management.

Commenting   on  the  results, Professor James Woudhuysen observed that ‘changes in HR and psychology are  much deeper, and much  less  noticed,   than  those   in IT  and  space. New  technology  is regarded as the only game  in town, which is myopic and  obsessional – it’s  harder  to automate services in a hospital than it is in a car factory, where  you just bring in a robot.’

According to Professor Rachel Cooper,    the   future   could   mean more  stress and  lower productivity unless   companies counteract the negative impact of new ways of working  on  worker  wellbeing. There  was, she  said, a disconnect between the  adoption of new digital technologies that drive a work-anywhere culture and the realities of working life.

However, Cooper  believes there is a growing role for design thinking as an integrating force within  the   mix  of  future  ideas on    raising    productivity:    ‘You can  map  out  future  technology but   it’s  more   difficult  to   map out   the   behavioural response of employees – this is where workplace   design   becomes really   crucial   because   design finds a way throught that messiness´

3: Context

The factors shaping  how we’ll work.

Leadership

Employee        performance      is influenced by a complex web of physical, social and psychological factors,  according to  a  review  of the  research literature. This sense of   interconnectedness  emerged in the  survey  results.  The  review highlighted three key leadership themes – motivation,  engagement and new generation management.

To   motivate   their   staff,  leaders need to  work  within the  context of  organisational constraints and ambiguities  to reduce fluctuations in employee performance. But leadership  objectives should extend beyond simply maintaining employee interest  to encouraging intrapreneurship –  several  papers highlight the  role  of natural  leaders as  innovation  champions or  intrapreneurs, taking  measured risks  and motivating their teams  to do the same.

Employment engagement is increasingly  viewed  today as more than just a mechanistic management lever within companies but in the context  of organisational citizenship, where  authentic  leaders motivate their people to be better  citizens in their places of work.

Meanwhile the search for ‘a new breed of managers who will be leaders and  coaches rather  than  supervisors of the  past’  is intensifying  as  old command-and-control hierarchies are jettisoned.

According  to  a  report  on  the  future  of  work  from Bene  (2018), new generation management will focus  on  self-adaptive systems,  fluid leadership and  self-organisation to combat  volatile business conditions. The report  quotes Professor Fiona Kerr, University of Adelaide:  ‘Leaders who create adaptive systems are complex  thinkers. They understand the fact that you can’t control; you have to steer  because you are dealing with something dynamic.’

Wellness 

Wellness  emerged as  an  important  factor  in productivity and performance from the research review. It  focuses on  the  psychological and  physical  impacts on  individual  employees to  perform  to  the  best   of their  ability. Key  issues evident   in the  literature  are presenteeism, communication,  choice  and control, and access  to  psychological  and   physical  development for employees.

Workplaces where people perform to their full potential provide employees with confortable amounts of control over their environment, send  desirable non-verbal messages, support  completing  the tasks at hand, align work and  life demands, and  provide  opportunities to refresh  after  employees become mentally  exhausted from working.

Many organisations have  traditionally looked  at rates of  absenteeism from  work  to  measure productivity, but  presenteeism is  emerging as  a  bigger   drag  on performance  as   people  feel   too   insecure  to  take time  off work when  unwell.   This aspect surfaced in the  survey  results.  One  company  described its future plans  for raising  productivity  as  ‘encouraging middle management  to   be   less   about   presenteeism  and more  about   output…if you  need to  have  a  doctor’s appointment then just go. Don’t feel awkward or embarrassed to ask your boss.’

The idea  that performance can be improved  by giving the individual more choice  and control in a work environment is heavily supported by the academic literature  on environmental psychology.  But too much choice  and control can adversely affect productivity, as too many options can be overwhelming  for workers.

Environment

Design  of the  work environment is closely  linked  to raising levels of wellness,  according to academic research. The environment needs to support  wellness initiatives and  provide  spaces and  settings that allow employees  to  perform   to  the   best   of  their  ability. Poor acoustics is the primary cause of employee dissatisfaction   with the  workplace;  according to  the Leesman  Index, just 30  per  cent  of office occupants are  happy  with noise  levels.  Conversely  a  report  by the World Green  Building Council, Health, Wellbeing & Productivity in Offices (2014), notes  that an office that is too quiet can be unnerving.

Level of acoustics will depend on the type of activities being   carried   out   in  the   workplace   on   the   office culture,  and  on  the  choice  of materials  specified  by the designer. Alongside  acoustics, fresh air, employee consultation,  plants,  showers, personal lockers,  digital collaborative tools and variable lighting control located in a  workplace   environment can  also  play  a  role  in raising levels of personal wellbeing  and  subsequently productivity. Again, survey results – especially  on plans for the future – reflected the themes of research.

Technology

New ways of working have been enabled by advances in digital technology, which are designed to aid workers to  be  less  place-dependent and  more  efficient  and productive   than  ever  before.  But a  persistent theme of the  research review  was  the  tension  between the human and technology.

According   to  a  report   by  the   Work  Foundation at Lancaster University, Productivity, Technology and Working Anywhere  (2018), there  is a  danger that emerging work-anywhere practices such  as  flexi- working will actually worsen  productivity levels  rather than  improve  them  because employees find the  new workstyle so stressful. As a result there is now a growing focus on finding more human-centered technology solutions.

More generally, as the digital economy increasingly integrates the physical and virtual world and smart buildings   enhance  connectivity   and   track   patterns of   collaboration  through    electronics, sensors  and software,  huge  amounts of performance data  will be produced. Research suggests that data analysis will help organisations to manage workflow better,  understand their  performance challenges more  comprehensively, and ultimately raise productivity.

4: Conclusions

Key messages from the study

The findings of the Puzzle of Productivity survey present a  number  of ideas   for organisations interested in improving employee productivity.

The findings of the Puzzle of Productivity survey present a number of ideas for organisations interested in improving employee productivity as  companies seek to integrate the  major drivers  of productivity – leadership, environment, technology and  wellness  – there  is an urgent  and growing priority for more holistic and joined-up thinking in workplace  strategy.

There  should  be  initiatives that  break  down  the  traditional  siloes  of IT,  HR and  Facilities Management. There  is an opportunity  for design  thinking to play a significant role in this cross-disciplinary  process of integration, but it is leadership that will make this happen.

It  is a  two-way  street.  A partnership. Leaders of organisations must  recognise the  role workplace can play to improve productivity. Workplace design is a canvas for new-generation leaders to express strategies that entrust,  enable and  motivate  people. The best  leaders will create a cultural identity which they  will allow to be  brought  to life by great  design. So, in turn, a working environment is one  that enhances productivity and goes beyond the merely functional. This partnership between design  and  leadership is vital if organisational performance can be improved, as feedback from the survey – more than half of the survey (54  per  cent)  named leadership as  the  most  important  factor  in raising  organisational performance – strongly indicates  that leadership holds the to key to productivity. On its own it might not solve the workplace  productivity puzzle, but it cannot  be taken for granted.

Great leaders will take the holistic and integrate view of organisational performance. Hence, they  must  not  ignore  Wellness.  It  is coming  up  fast as  an  issue  in terms  of interest  and engagement – but there  is still a lack of practical awareness about how it can be addressed and how the right workplace  choices around  space and technology can support  health and wellbeing imperatives.

Finally, we  are  living through  a period  of digital disruption  in which new,  distributed  and flexible ways of working have  the potential  to raise performance significantly. But so often, new tech-driven  work practices do the opposite and plunge  groups  of workers – especially older workers – into a productivity slump as wellbeing is adversely impacted.

Organisations will go  a  long  way  to  solving  puzzle  of productivity  if  they  can  balance the  human  needs and  lived experience of the  individual against  the  requirement to use technology to push the dial on performance. Again, this relies on great leadership.

 

SOURCE: Fourfront Group, The United Workplace  and WORKTECH Academy