Episode 52: Understanding and Creating Productivity in Non-Profits

Welcome to another edition of a”Around with Randall,” your weekly podcast making your non-profit more effective for your community, and here is your host, the CEO and Founder of Hallett Philanthropy, Randall Hallett. Thank you again for joining me here on “Around with Randall” and of course I’mm Randall and today's conversation is discussing productivity. 

There's been some interesting conversations of late about the measurements that go into it all surrounding the time around the pandemic. First and foremost, there's nothing that is going to be more important than the efforts that go into finding the vaccines, getting it applied, and certainly for those families and individuals who have suffered, first and foremost from a health perspective, from Covid 19 but also those that have been affected very negatively financially. What we're going to talk about today is not meant to overshadow those issues. It’s more of just a realization that maybe there's some answers out there from an economic perspective down the road that can be helpful to society. So let's start with the big question about what are we talking about in terms of this productivity. Well, productivity really refers to measurements of the output that an individual worker has in an hour, and the reason productivity changes is that something within that work in that hour has caused them to be able to push more output out of their labor. So what are we talking about here, well, what's been realized in the last 18 months or so, is that there has been the largest jump in productivity in the past 30 plus years. How much in the first quarter of 2021 alone? There was a 4.3 percent increase. Second quarter of this year saw a little bit below that level but about 2.1 percent increase. For those who people who don't track productivity numbers and that's probably 99.999 percent of the world, that's an enormous jump. I mean that is staggering. There are years when you don't have a 2.1 increase in productivity and we had triple that if we have the two quarters together, in just six months.

It's really noticeable from an economic output perspective. So why is productivity really so important? Well, what productivity actually is connected to which is really important to realize is that increases in productivity is actually a direct relationship down the road of a larger more robust economy. Over time, what we know is that as productivity increases our gross domestic product increases, economic opportunity for individuals increases, costs of things goes down because we're able to do more with the same or less inputs. It has huge implications on future economic growth and the ability for our economy to rebound from the pandemic. This has global effects in terms of trade. It also has the ability, in terms of planning, to look at reinvigorating a sense of manufacturing. In the United States it has the ability to look at, individually, people earning more money. Actually, what they have found as productivity increases, salaries increase. There's all of these unbelievable productivity output or outcome statistics that frankly I’ve never understood. Why we don't all talk about it more often? Because not that it's the golden goose, but there's so many amazing things that occur economically when you have increases in productivity. 

So why is there more productivity? That's a good question. What they're finding is several things. Number one, what's happening is is that as we went through the pandemic. Businesses had to adjust, which increased productivity. So let's talk about a potential, or a couple of examples. They're not potential. They're examples. Let's take the restaurant industry. Along with travel, probably food and beverage service has been most affected by the pandemic over the entire 18 month period. People couldn't go into restaurants. So what happened? Restaurants figured out how to produce their food for people to take home - takeout. Now, you may think well you know you drive through McDonald’s, Chick-Fil-A, Burger King, wherever you like to go. I’m talking about sit-down restaurants. We literally had places that weren't allowed to have people inside them and yet with a couple cooks, a couple servers, they're able, maybe an order taker, they're producing food. That's a huge increase in productivity.

What about those - we'll think about beverages - at least where I live in Nebraska, but I’ve seen it in other places, all of a sudden with state and local municipality support they change their laws to allow people to take drinks home. Want to make sure we're not drinking - drinking and driving is never appropriate - but there was an option. Increased productivity.

We also had to figure out how to work differently because we can't go to offices. I really struggle to get in and out of Los Angeles. There's just a lot of people moving around. But yet, what we saw is people didn't have to drive two hours one way to work. They could work from home and they got more done. They were in better spirits. Increase in productivity.We found out that we don't all have to go to the same office all the time and then lose time in that transition. Productivity. 

There's so many examples. Another one. Warehouses. Take Amazon or whatever other one you want. They were having trouble getting individuals. They brought in technology. They brought in robots. Increase in production. Increase in productivity. All of these things.

Education. Terrific example where you had people that could go to class from long distances away do it from home via zoom. Increase in productivity. All of these are examples where we had to learn to adjust. 

This is also something important like if we look at the future one of the great concerns that we have is is that inflation seems to be on the rise. Well, what we also know is is that if we increase productivity, the cost of products go down. We’re able to output more things, more services, at a lower cost,  which increases productivity. So not to say that productivity alone is going to keep inflation in check, but it's one of those things that might be something to consider when we're looking at increasing costs. As we've lost control a little bit of supply chain, and certainly of work force that used to be, we've got kind of a dynamic workforce situation. There's a lot of moving pieces but if we're looking for trying to keep inflation in check, the more we produce at a lower cost, the lower cost that particular service or product is. I’ll use me as an example. If I don't have to get on airplanes as often and still can deliver the same value through virtual meetings, it means I’m more available. If I’m more available, I don't have to charge as much. It increases my productivity because being on airplanes and hotels is really cost inefficient for me, but yet I still need to deliver the same level of service and outcomes for my clients. We found a mechanism to to do some of that. All kinds of great ways of looking at it. 

So, productivity might be that game changer in all kinds of ways, from economics to delivery of services, to the way in which we look at our our macro and micro. Maybe brings down costs. Maybe it helps with inflation, all kinds of great ways to think about it.

Let me talk to you a little bit about kind of two things we're not talking about in terms of productivity. So, some of you might have read recently there have been a number of stories of what I will call double dipping. That someone now working from home can do actually two full-time jobs, or so they have indicated. There's a story out of Baltimore where a government official was doing two jobs, a private industry job and working for the federal or for the state, and I guess in that case it was city government in Baltimore. They don't have any rules against it. He says look at my evaluations, they're great. What's the problem? There was one gentleman who took a job as a second job to get ahead of the curve at the beginning of the pandemic because he thought “I was going to be laid off,” and so he took the other job thinking he was going to get laid off, and then he didn't get laid off, and he didn't get laid off, and he found out he could do both jobs and some anonymity involved, but the Wall Street Journal wrote about this and Forbes wrote about this and he created a website where he said, “Look, if you are someone like me and want to stay anonymous tell us about your story,” and the number of people who wrote in saying “I’m doing two jobs and I can do them both.” The other thing is is that because employers are looking for good people and they want to keep good people because of the employment market as it sits now some of the employers are like, “I don't have a problem with it if they get the work done.” Well, that I’m done whatever they do with their other time I don't really care, is this going to change the 40 hour work week? I don't know. But what I do know is is that that's not an increase in productivity that we're talking about. We're going to talk about that in the tactical. 

The other one that I think we should spend just a second about talking about is this idea of the solo paradox, and you're probably like, “what is that?” Robert solo is a worldwide famous Nobel-winning economist, and in the 1980s he did a study is technology was becoming more normalized in our society, particularly in the United States, England, you know Europe, Australia, Japan. Computers were becoming more and more dominant at that point. I was kind of in high school. My - we had a little tiny computer you could just print out on - but obviously for-profit businesses were using that much more effectively. He did a huge study about productivity and what he found was this paradox they named it after him. The Solo Paradox won the Nobel Prize is that when you increase an organization and a group of individuals, technology alone, that does not increase productivity, and people have repeated this study and found the exact same thing consistently since 1987. Just adding computers or technology alone does not increase productivity. Fascinating because I think there's a natural thought that it does. The reason why is is that if a large organization adds computers, which almost everyone has, it creates a sense of bureaucracy. Emails going back and forth. And it becomes constant. I always have to reply and someone else is replying and I’ve got to read that. It’s increased the amount of work that we're doing that is tangential to the goals we're trying to accomplish. So if you don't introduce some measures which we're going to talk about, literally in 30 seconds, about how to use technology and more importantly the team and the individuals, then this isn't relevant to increasing production. Productivity on its own, technology alone, won't change this. It's more about the people and how they use the resources and how they work together. 

So let's jump into the tactical and as we do each and every episode of “Around with Randall,” talk about what does this mean for you in nonprofit work. I think there's an opportunity here in terms of non-profit, our sector of the world, to see enormous change. Does this mean that the special events person will be doing major gifts along the way to increase productivity? I don't know. It's possible. Does it mean that we have people who are working in two different sites? You know, BS fundraisers at 20 hours a piece and they can split their time because we have technology to support that and the systems to do so? I don't know. But what I do know is if we keep doing business the same way, we're probably going to go back to an old result and that's actually what the economic studies and productivity are saying, is how long will this last. How long will we allow this productivity to grow by changing the behaviors we have, because people are sometimes… it's hard to change from an office perspective. And I’ll break this out into two - office and then individual. The office is all about the idea teamwork the old model is really one based on skills that we have a certain issue to be dealing with. We bring people who we think have skill sets to fix that problem, usually put them in a small group, or maybe it's a small office, and we utilize those skills and we try to build out solutions, and when that's over we disassemble that group, or what's happening right now in philanthropic offices we see large exodus of people.

What we know is is that, and this comes from the Everest Group, is is that when you do that, when you allow teams to be kind of deconstructed and you try to regroup another group of people together for a period of time, eighty percent of their work is non-productive. It's about building relationships. It’s about building trust and communication skills and knowledge about everyone else. It's not actually solving the problem. And what we're finding is the longer we keep teams together, even if you think the skill sets aren't perfect, what it happens is you have greater productivity because they can take the 80 that's non-productive and eliminate that. Because if they already know the people they're working with it gets them to be able to be more focused on the problem. So things like flexibility, things like ongoing learning, intellectual curiosity, having patience, even things like the ability to communicate and be creative, are critical elements for individuals within the team. Flexibility and being a willingness to take people at their word and build out those relationships, even if you don't have someone who can solve the problem directly like you think the technical skills - what they've learned -  is is that you get group consistent. They can solve more than you think. How much more? Well the Everest Group did a study and they found that groups that stay together even if they don't have all the perfect technical skills, their productivity jumps 300 to 600 percent. 

You want to know why you need to keep your gift officer, your assistant, your database person from leaving and fight for that additional five dollars an hour, three dollars an hour, five dollars a year? Giving them flexibility in the office, whatever it is, and if you're a leader you want to know why you should do that. It's because the longer you keep your team together the more likely they are to be productive, and the more productive they are the more money they're going to raise to support your organization, period. If you're not a leader then you're dealing with the individual. 

What are the things you can do? Well number one is keep yourself organized. Lists and tasks. What is it you need to accomplish today, keeping in mind the big story of or the big goal of the, of your group or the organization, or maybe your metrics. Look for root causes. Sometimes we get stuck on kind of the periphery of a problem because we think that solves it, but it's not the root problem. The root problems sometimes are painful. The root problems are challenging but we can keep poking around the problem for a year, year-and-a-half, and never solve the problem because we're not willing to address it in the middle. What is the root issue that we're dealing with, not the behaviors, not the outcomes, the root of the challenge? Give yourself the time to brainstorm, to be creative. I’ve been so fortunate to be around the jesuits who have a very, you know the idea of ingation principles or jesuit principles, is surrounds the idea of reflection. Do you give yourself chance to look back and realize challenges, mistakes, and openings, and can you then apply that to be imaginative about the future professional? What is it, else i can accomplish?

The final one i think is actually the most profound but may sound the simplest, and I totally stole it from Admiral William McCraven. If you want to watch something that's really worthwhile, Google Admiral William McCraven Texas commencement. You'll get the video. There's several variations are all the same video about his commencement speech to the graduates of the University of Texas and I think in 2014. I’ve watched it… I don't know… scores of times. It's just phenomenal but he talks about at the beginning that you need to try to do something every day you can feel good about, and it should be at the start of your day. He talks about it from the perspective of seal training and that every day those seals in training did one thing to start their day. They made their bed and it had to be perfect. And then he jokes even if they had a bad day they could come home and see the bed was made perfectly. There's a lot of truth in that what are the simple things that you can do perfectly to start and to enhance your day's success. Really to build upon is that something like clean your desk or office. I actually love cleaning my office. I feel so great after doing so I tend to find myself doing it about once a week in the morning for 15 minutes-  get out the you know, cleaner and a paper towel, dust, vacuum 15-20 minutes. I feel great. Everything looks tremendous, and I build upon that. My attitude changes. Maybe it's take a break. I’ve learned to take a walk and when I come back I really have a sense of being able to dig in to do my job more more accurately, more robustly. Maybe it's tame your email, increase your filter, or opt out of those emails you don't want because they're distracting. You gotta read them. It’s just the more you're able to align that focus, all of these things are about creating productivity. It’s about creating an opportunity to build to the next thing and then the next thing and then the next thing.

So whether it's a team and this idea of keeping that team together, increasing productivity, or individually and being able to control your calendar and do your to-do list and know what you're supposed to do, and to look for what causes a problem rather than just the behavioral ones that come out of them, or the challenges that come out of it to brainstorm and imagine. And to do one thing every day to build upon, do it great to build upon from yesterday, all those things are ways you can increase your productivity. And in the end that's going to help you and your organization be more effective.

Again as we always do, check out the blogs at hallettphilanthropy.com, two or three a week just 90 second reads, something to think about. Try to think, find different stories, different things that kind of make me go hmm. It’s kind of interesting, maybe something for you to consider. And if you'd like to reach out to me make sure you do so if you have a complaint or something you disagree with that's reeks at r e e k s at hallettphilanthropy.com and if you want to talk about the podcast that's podcast at all at hallettphilanthropy.com.

I love what I do. I hope you love what you do. Working in the nonprofit world, making the world a better place. Remember philanthropy doesn't mean money it means love of mankind, love of humankind, and it leads me to my all-time favorite saying. Some people make things happen, some people watch things happen, then there are those who wondered what happened. We’re people, we’re organizations, our lives are based on helping people who are wondering what happened because we are people who want to make things happen and our organization should mirror that sentiment. And I hope you feel like you're doing your part today and every day. It’s worthwhile and it is making a difference. Can't thank you enough for joining me for this edition. can't wait to see you on the next edition of “Around with Randall,” and don't forget make it a great day.