In the last chapter, you learned about the three ingredients of productivity and why it is vital to have all three ingredients to gain the greatest level of productivity you can achieve. In this chapter, you will learn how to measure productivity so that you can improve your production and achieve more of your goals in the least amount of time possible.
Dictionary.com defines productivity as “the quality, state, or fact of being able to generate, create, enhance, or bring forth goods and services.” Its definition in regards to economic is similar: “The rate at which goods and services having exchange value are brought forth or produced.”
Labor productivity is defined as “the output volume divided by the labor input use.” In other words, its the amount of effort and time that the worker puts in and how many units of production he/she produces in that time span. If a worker produces one unit (say, one ebook) an hour and another worker produces two units (say, two ebooks) in one hour, then the second worker is two times more productive than the first worker.
This means that the second worker is able to utilize the same amount of time to produce two times the amount of material/product. This means he/she is more efficient and more productive because he/she is better able to manage his/her time, focus his/her attention on the tasks required, and/or utilize the energy necessary to complete the tasks required in that time period as compared to the first worker.
Therefore, in order to boost your productivity, you need to be able to produce more of the product or provide more of the service you deliver in the same amount of time or less than you have before.
As mentioned above, if you produced one ebook an hour, you’ll be more productive if you can produce two ebooks an hour. You’ll have two products you can sell in one hour instead of just one product, even if the amount of pages total between the two books is the same as the one book from before. Of course, if you can produce two books of the same length as the first ebook in one hour, that’s even better.
When it comes to businesses, though, it’s not just your production, but the production of your workers who work for you. Whether that’s a traditional business such as a brick-and-mortar business or an online business where you use outsourcers to produce content and products and/or provide services for you, you have to measure their productivity as well as part of your overall productivity.
Therefore, if you can produce one to two ebooks per hour yourself, and they can add another one to two ebooks per hour themselves, you have that many ebooks in one hour. For instance, if you have five outsourcers producing two ebooks an hour each, and you can produce two ebooks per hour yourself, you have twelve ebooks produced in one hour.
That’s six times the amount you can produce on your own, which means that you have six times the productivity as before. However, if one of your outsourcers can produce three ebooks per hour, while the other four outsourcers can produce two ebooks per hour and you can produce two ebooks per hour, then you have 13 ebooks per hour you can sell, or about 6% more productivity than before (13-12 = 1 more ebook/12 total ebooks before = 6%).
It’s similar in traditional brick-and-mortar businesses when you have several employees attempting to make sales of products inside the store. If one employee can sell five pairs of shoes in one hour, and you have five employees total that can sell five pairs of shoes in one hour, then your store will sell twenty- five pairs of shoes in one hour (5 x 5), which is five times more productive than just one employee can do. However, if one of those employees can sell ten pairs of shoes per hour, while the other four employees can each sell five pairs of shoes per hour, then your store can sell thirty pairs of shoes per hour ((1 x 10) + (4 x 5)), which means you have 20% more production than you did before (30-25 = 5 more shoes/25 total shoes before = 20%).
In this chapter, you learned that productivity is that it is the amount of effort and time that a worker puts in and how many units of production he/she produces in that time span. The more products produced or the more services rendered in that time span, the more productive that worker is. The more workers that can provide more products or that can render more services, the more productive the business is. In the next chapter, you will learn how to start laying a productive foundation to improve your productivity and your success.
Do the exercise below to learn a simple hands-on method for measuring productivity.
Exercise 3: Measuring Productivity