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Where You Are Depends on How You Look at Things

Where You Are Depends on How You Look at Things
Look at things differently

One of the big differences between people who are successful in life and business and people who aren’t is how they look at things, which in turn shapes how they make decisions. If you aren’t satisfied with your progress up the corporate ladder, the value of your investment portfolio or your ability to find a partner you might have more success by altering how you look at things and therefore how you decide to act.

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To show how we look at things, and the difference it makes, here are a couple of situations where you might look at things in a new way. Read the full story to see multiple ways of looking at the same things.

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At a bedroom, linen, and kitchen store, packages of six low-energy fluorescent bulbs are hanging near the checkout for last-minute sale to shoppers. The concept of being green has proliferated in recent years so the shopper, Susan, reaches up and takes a couple of the packages. She is happy with herself for joining the green movement and thinks, “Al Gore would be proud of me.” When unpacking the bulbs at home Susan has a ‘light bulb moment’ and realizes these energy saving bulbs are packaged in energy wasting plastic casing. That might be safe packaging, but what is wrong with the paper boxes of old? Is it that the plastic casing is see-through? Is it that these packages are easier to display? Susan wonders, “Is more energy used to make this packaging than will be saved using the bulbs in it? Maybe this wasn’t such a good green purchase when taken as a whole.”

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Brett needs to become more proficient with a piece of software, Photoshop. He purchased it a year ago for hundreds of dollars along with a Getting Started with Photoshop book. He hasn’t opened the book. He’s opened the software but doesn’t understand how to get started. Today Brett is considering taking a class to get cracking and act on his New Year resolution to use what he has. Brett’s investment in the class would be $175 and 8 hours. Getting started seems like a good idea. Brenda, his girlfriend and firecracker analytic, asks a few investigative questions: “Brett, do you have 8 hours to spare? It seems you’re always doing work as it is.” She continues, “Is it possible that you could hire a tutor or power user who could show you one-on-one only the things that you would like to learn about? If so, wouldn’t that take a lot less than 8 hours? And, might it cost less than $175?” Hmmm… Brett never thought of such special education but the cost/value analysis Brenda is offering changes his leaning against taking the class but still to get the start he wants by hiring a tutor (or proficient high school student).

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Verizon recently installed FIOS in a small townhouse community. Looking out his window Smitty, a seasoned businessman, did the calculation. There have been 5 guys here for 5 days digging the trench, laying the conduit, and putting things back in the original condition. That’s worth at least $6,000 ($30 per hour, 8 hours per day, 5 days, 5 guys). Then there is all that equipment and materials they brought in worth another $2500, at least. And the tree they killed and are now replacing is another $400. Plus, the installers have to come back on yet another day to run the conduit and hook up to each townhouse. That’s probably another 13 man days worth ($3,120). That totals $12,020. Doesn’t seem like the payback period is too good. When Smitty gets out his calculator that 100 per month x 7 units x 12 months equals $12,600 per year income. That’s 1 year break-even if you don’t consider the back office costs. Plus, and probably more important to Verizon, they now own the channel to these 14 townhouses for new technology installations in the future.

The way we look at things affects the decisions that we make. Watch how you look at things and, if you want to be in a better position whether in your relationships, work, fitness, or money see if you can expand how you look at things. Watch how others look at things. Ask questions of people whose situation you admire and move toward understanding how they look at things.

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The Productivity Paradox: What Is It And How Can We Move Beyond It?

The Productivity Paradox: What Is It And How Can We Move Beyond It?

It’s a depressing adage we’ve all heard time and time again: An increase in technology does not necessarily translate to an increase in productivity.

Put another way by Robert Solow, a Nobel laureate in economics,

“You can see the computer age everywhere but in the productivity statistics.”

In other words, just because our computers are getting faster, that doesn’t mean that that we will have an equivalent leap in productivity. In fact, the opposite may be true!

New York Times writer Matt Richel wrote in an article for the paper back in 2008 that stated, “Statistical and anecdotal evidence mounts that the same technology tools that have led to improvements in productivity can be counterproductive if overused.”

There’s a strange paradox when it comes to productivity. Rather than an exponential curve, our productivity will eventually reach a plateau, even with advances in technology.

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So what does that mean for our personal levels of productivity? And what does this mean for our economy as a whole? Here’s what you should know about the productivity paradox, its causes, and what possible solutions we may have to combat it.

What is the productivity paradox?

There is a discrepancy between the investment in IT growth and the national level of productivity and productive output. The term “productivity paradox” became popularized after being used in the title of a 1993 paper by MIT’s Erik Brynjolfsson, a Professor of Management at the MIT Sloan School of Management, and the Director of the MIT Center for Digital Business.

In his paper, Brynjolfsson argued that while there doesn’t seem to be a direct, measurable correlation between improvements in IT and improvements in output, this might be more of a reflection on how productive output is measured and tracked.[1]

He wrote in his conclusion:

“Intangibles such as better responsiveness to customers and increased coordination with suppliers do not always increase the amount or even intrinsic quality of output, but they do help make sure it arrives at the right time, at the right place, with the right attributes for each customer.

Just as managers look beyond “productivity” for some of the benefits of IT, so must researchers be prepared to look beyond conventional productivity measurement techniques.”

How do we measure productivity anyway?

And this brings up a good point. How exactly is productivity measured?

In the case of the US Bureau of Labor Statistics, productivity gain is measured as the percentage change in gross domestic product per hour of labor.

But other publications such as US Today, argue that this is not the best way to track productivity, and instead use something called Total Factor Productivity (TFP). According to US Today, TFP “examines revenue per employee after subtracting productivity improvements that result from increases in capital assets, under the assumption that an investment in modern plants, equipment and technology automatically improves productivity.”[2]

In other words, this method weighs productivity changes by how much improvement there is since the last time productivity stats were gathered.

But if we can’t even agree on the best way to track productivity, then how can we know for certain if we’ve entered the productivity paradox?

Possible causes of the productivity paradox

Brynjolfsson argued that there are four probable causes for the paradox:

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  • Mis-measurement – The gains are real but our current measures miss them.
  • Redistribution – There are private gains, but they come at the expense of other firms and individuals, leaving little net gain.
  • Time lags – The gains take a long time to show up.
  • Mismanagement – There are no gains because of the unusual difficulties in managing IT or information itself.

There seems to be some evidence to support the mis-measurement theory as shown above. Another promising candidate is the time lag, which is supported by the work of Paul David, an economist at Oxford University.

According to an article in The Economist, his research has shown that productivity growth did not accelerate until 40 years after the introduction of electric power in the early 1880s.[3] This was partly because it took until 1920 for at least half of American industrial machinery to be powered by electricity.”

Therefore, he argues, we won’t see major leaps in productivity until both the US and major global powers have all reached at least a 50% penetration rate for computer use. The US only hit that mark a decade ago, and many other countries are far behind that level of growth.

The paradox and the recession

The productivity paradox has another effect on the recession economy. According to Neil Irwin,[4]

“Sky-high productivity has meant that business output has barely declined, making it less necessary to hire back laid-off workers…businesses are producing only 3 percent fewer goods and services than they were at the end of 2007, yet Americans are working nearly 10 percent fewer hours because of a mix of layoffs and cutbacks in the workweek.”

This means that more and more companies are trying to do less with more, and that means squeezing two or three people’s worth of work from a single employee in some cases.

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According to Irwin, “workers, frightened for their job security, squeezed more productivity out of every hour [in 2010].”

Looking forward

A recent article on Slate puts it all into perspective with one succinct observation:

“Perhaps the Internet is just not as revolutionary as we think it is. Sure, people might derive endless pleasure from it—its tendency to improve people’s quality of life is undeniable. And sure, it might have revolutionized how we find, buy, and sell goods and services. But that still does not necessarily mean it is as transformative of an economy as, say, railroads were.”

Still, Brynjolfsson argues that mismeasurement of productivity can really skew the results of people studying the paradox, perhaps more than any other factor.

“Because you and I stopped buying CDs, the music industry has shrunk, according to revenues and GDP. But we’re not listening to less music. There’s more music consumed than before.

On paper, the way GDP is calculated, the music industry is disappearing, but in reality it’s not disappearing. It is disappearing in revenue. It is not disappearing in terms of what you should care about, which is music.”

Perhaps the paradox isn’t a death sentence for our productivity after all. Only time (and perhaps improved measuring techniques) will tell.

Featured photo credit: Pexels via pexels.com

Reference

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