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By: Robert F. Abbott When Phil hires a new helper for one of his construction projects, he first watches to see whether or not the newcomer has the right attitudes and habits to keep him as an employee. And, if the newcomer meets expectations,' Phil introduces him to his philosophy about work by telling him the woodcutters story. Two woodcutters who are working together for the first time, set off in the morning to cut down trees. One woodcutter works very hard, and aside from a couple of breaks, works steadily all day. The other woodcutter, though, seems to take many more breaks, at least one every hour. So the first woodcutter expects he'll have cut down many more trees by the end of the day. But, when they quit for the day, the first woodcutter finds, to his surprise, that the second woodcutter has done more, despite taking all those breaks. And, in his frustration, the first woodcutter wonders out loud how the second woodcutter did it. The second woodcutter couldn't help but hear the first woodcutter's question, and replies, 'Yes, I take many more breaks, but every time I take one, I sharpen my axe.' Phil uses this story of the woodcutters to explain his ideas about productivity, and he doesn't relate it to the productivity which economists refer to in their statistics. Phil thinks of productivity in a very immediate way: how many nails you can drive in one hour, for example. The economists are talking about the same thing, only they're talking about it as the sum of many millions of businesses and organizations, so they're talking about productivity in an abstract way. Whatever the case, productivity simply refers to the amount of value you can get from labor, land, or capital (invested money). As we'll see in the next section, Phil's income goes up when he (and his helper’s) productivity goes up. Increasing productivity across a whole nation is also good news. It means everyone in society becomes more prosperous, that everyone (or almost everyone) will have more money to spend or save. Increased productivity can also mean lower prices. For example, if carpenters and home building companies increase their productivity, then house prices will go down. Generally speaking, though, consumers, owners of businesses, and workers in those businesses all share productivity gains. And what about people without job? Well they often gain, too, because when businesses owners and workers make more, they pay more in taxes. In turn, that makes more money available to governments for social programs. Having heard all that, you may be skeptical, thinking your prosperity hasn't gone up much, if at all. But you'd be wrong. Productivity has gone up, and gone up a lot over the past two hundred years, and especially over the past 50 years. It may be invisible to most of us, but productivity is one of the silver bullets that have given us our prosperity and so many of our choices.
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More Articles:1. 3 Innovation Keys - Do Your Innovative Efforts Need More Power? By Bill Thomas Recently, I attended a webinar with nearly 400 other Chief Learning Officers - during one polling period, we were asked what primary driving force pushes organization-wide or individual innovation - the majority agreed that leadership is that force.Indeed, those CLOs agreed innovation was the most important quality their organizations desire in teams, individuals and leaders.In today's fast-paced society, where images, ideas and ideals fly past through our minds at warp-speed, the only … 2. Why Businesses Need to Start Nurturing Collective Wisdom By Marcus Goncalves COLLECTIVE WISDOM CAN BE AN effective tool for solving the problem of knowledge deficit, or the underutilization of organizational knowledge. If you are a small, medium or large business, and you don’t have a method in place for harnessing and managing your organization’s collective knowledge, you may be losing opportunities for significant revenue enhancement. According to a study by the Delphi Group, less than 20 percent of knowledge available to an enterprise is actually used. Furthermore,… 3. Better Manager Skills - How to Learn By Chris Anderson When you first take over a department, expectations are usually high but operations are sometimes in disarray. The staff is disorganized, goals aren’t being met, and hours are spent on unproductive tasks. Just when you think the company would never get on track, the CFO recommends that you learn more about something called operations assessment.Crucial Management Skills Help Avoid MistakesAt first, you aren’t sure how operational assessment skills would help you manage better, but you quickly … 4. Innovation Management – Raw brainpower versus experience By Kal Bishop Creativity can be defined as problem identification and idea generation whilst innovation can be defined as idea selection, development and commercialisation.There are other useful definitions in this field, for example, creativity can be defined as consisting of a number of ideas, a number of diverse ideas and a number of novel ideas.There are distinct processes that enhance problem identification and idea generation and, similarly, distinct processes that enhance idea selection, development … |
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