Sean McCoy identifies key steps a business may take to alter the operation model and improve productivity.
We are in the initial stages of a productivity mega-trend. Forced by wage growth and enabled by technology, leading companies are already redesigning their operating models to make their people more productive.
The forces creating the productivity mega-trend
Wages are rising and look set to continue rising. Labor’s share of GDP is at a 90-year low, and we are seeing a reversion to long-run historical averages. 20 states raised their minimum wages in 2018, impacting 17M workers, over 10% of the country’s workforce. New technologies are radically re-shaping the processing of data and the interacting with prospects, leads, and customers. Repetitive work is being automated, and customer engagement is going digital. Extend the evolution of these two trends, wage growth and new technologies, and a firm can expect to experience one of two outcomes over the next business cycle: margin dilution or productivity growth.
How to join the productivity mega-trend
The first step to participate in the productivity mega-trend is to understand which of your business functions will be impacted. Functions with large spans of control and a large share of entry-level positions will be affected the most by wage growth. Functions where “data shuffling” is a common activity will be affected by automation technologies. Customer-facing functions will be impacted by the new customer-experience technologies. When listing functions that meet two or three of those criteria, at the top are functions such as inside sales, customer care, and customer service, and corporate functions such as Accounting, Finance, and HR.
Key points include:
- Wage increases
- How leads and customers interact with business
- Shifts from strategy to execution
Read the full article, The Productivity Mega-trend You Can’t Ignore, on McCoyConsultingGroup.com.