The New Productivity Challenge

The single greatest challenge facing managers in the developed countries of the world is to raise the productivity of knowledge and service workers. The productivity revolution is over because there are too few people employed in making and moving things for their productivity to be decisive. The chief economic priority for developed countries, therefore, must be to raise the productivity of knowledge and service work. The promise of greater productivity led to massive investments in data-processing equipment that now rival those in materials-processing technology. A major insurance company recently increased the productivity of its claims-settlement department nearly fivefold—from an average of fifteen minutes per claim to three minutes—by eliminating detailed checking on all but very large claims. Salespeople are just as splintered. In department stores, they now spend so much time serving computers that they have little time for serving customers—the main reason, for the steady decline in their productivity as producers of sales and revenues.