It is the conventional wisdom that there is a productivity revolution afoot in the global economy, and that America is at its forefront. One imagines that, if everyone is more productive, goods and services should be less costly, and everyone should be better off.
Productivity is defined roughly to be output divided by input, measured roughly by dividing GNP by the total cost of production. Labor is among the most significant costs, especially in the service industries which represent a growing portion of the U.S. economy.
It follows that one effective way to improve productivity is to reduce quality and level of service. Airlines and mobile phone carriers are great examples.
Years ago I was a member of the IS department responsible for operating a mainframe computer shared by the departments of a multi-divisional company. When workload had grown to the point where an upgrade was desperately needed, upper management would always ask why we should upgrade when we were only using 90% of the machine’s capacity. Of course, the answer is found in the restroom analogy. The most efficient strategy for restrooms is to have a long line at all times. The restroom will be utilized at 100% of its capacity. Nothing is wasted, except the time and comfort of the people waiting in line.
Similarly, the most efficient approach to customer service is to have customers wait in line. In fact, the longer they wait, the better, because if the wait is long enough, a lot of them will just give up. The result is not only a fully utilized customer service department, but the workload is actually reduced.
The search for excellence is over. In productivity we have found something better than excellence. And mediocrity (or worse if we can get away with it) is the way to achieve it.