CHAPTER THIRTEEN
The New Productivity Challenge
THE PRODUCTIVITY OF THE newly dominant groups in the work force, knowledge workers and service workers, will be the biggest and toughest challenge facing managers in the developed countries for decades to come. And serious work on this daunting task has only begun.
Productivity in making and moving things—in manufacturing, farming, mining, construction, and transportation—has increased at an annual rate of 3 to 4 percent compound for the last 125 years—for a 45-fold expansion in overall productivity in the developed countries. On this productivity explosion rests all the increases in these countries in both the standard of living and the quality of life. It provided the vast increase in disposable incomes and purchasing power. But between a third and a half of its fruits were taken in the form of leisure—something known only to aristocrats or to the idle rich before 1914, when everybody else worked at least 3,000 hours a year. (Now even the Japanese work no more than 2,000 hours a year, Americans around 1,800, West Germans 1,650.) The productivity explosion also paid for the ten-fold expansion of education and for the even greater expansion of health care. Productivity has become the “wealth of nations.”
Rising productivity was something so totally unprecedented that there was no term for it in any language. For Karl Marx—as for all nineteenth-century economists—it was axiomatic that worker output could be increased only by working harder or longer—all of Marx is based on this belief. But though Frederic Winslow Taylor (1856–1915) disproved the axiom by starting to work on productivity in the early 1880s—his first substantial results came in 1883, the very year Marx died—he himself never knew the term. It did not come into general use until World War II—and then at first only in the U.S. The 1950 edition of the most authoritative English dictionary, the Concise Oxford, did not yet list productivity in its present meaning. By now it is commonplace that production is the true competitive advantage.
The productivity explosion was arguably the most important social event of the past hundred years, and one that had no precedent in history. There have always been rich people and poor people. But as recently as 1850 the poor in China were not measurably worse off than those in the slums of London or Glasgow. And the average income in the richest country of 1910 was at most three times the average income of the then poorest countries—now it is twenty to forty times as large, even without counting leisure, education, or health care. Before the productivity explosion it took at least fifty years for a country to become “developed.” South Korea—as late as 1955 one of the world’s truly “backward” countries—did it in twenty years. This radical reversal of what has been the norm since time immemorial is in its entirety the result of the productivity revolution that started in the U.S. around 1870 or 1880.
Productivity in making and moving things is still going up at the same annual rate. It is going up—contrary to popular belief—fully as much in the U.S. as in Japan or West Germany. Indeed, the current productivity increase in U.S. farming—4½ to 5 percent a year—is far and away the biggest increase recorded anywhere at any time. And the U.S. productivity increase in manufacturing during the ’80s—3.9 percent a year—was in absolute terms actually larger than the corresponding annual increases in Japanese and German manufacturing, for the U.S. base is still quite a bit higher.
But in the developed countries the productivity revolution is over. There are simply not enough people employed making and moving things for their productivity to be decisive. They now account for no more than a fifth of the work force in a developed economy—only thirty years ago they were still a near-majority. And the productivity of the people who do make the difference—knowledge workers and service workers—is not going up. In some areas it is actually going down. Salespeople in the department stores of all developed countries now sell, adjusted for inflation, no more than two thirds of what they sold in 1929. And few people would argue, I submit, that the teacher of 1991 is more productive than the teacher of 1901.
Knowledge workers and service workers range from research scientist and cardiac surgeon through draftsman and store manager to sixteen-year-olds who work as car hops in the fast-food drive-in for a few Saturday afternoon hours. They even include large numbers of people who actually work as machine operators—washing dishes in a restaurant, polishing floors in a hospital, pushing computer keys in a claims-settling department of a insurance company. Yet knowledge workers and service workers, for all their diversity, are remarkably alike in what does not work in raising productivity. But there are also important similarities in what does work for these workers, no matter how much they might otherwise differ in knowledge, skill responsibility, social status, and pay.
II
The first thing we have learned—and it came as a rude shock—is that capital cannot be substituted for labor (i.e., for people) in knowledge and service work. Nor does new technology by itself generate higher productivity in such work. In making and moving things, capital and technology are factors of production, to use the economist’s term. In knowledge and service work, they are tools of production. Whether they help productivity or harm it depends on what people do with them, on the purpose to which they are being put, for instance, or on the skill of the user. Thirty years ago we were sure that the computer would result in a massive reduction in clerical and office forces. The investment in data-processing equipment now rivals that in materials-processing technology—that is, in conventional machinery—with the great bulk of it in services. Yet office and clerical forces have grown at a much faster rate since the introduction of information technology than ever before. And there has been virtually no increase in the productivity of service work.
The most telling example are hospitals. When I first began to work with them—in the late 1940s—they were entirely labor-intensive, with little capital investment except in bricks, mortar, and beds. A good many perfectly respectable hospitals then had not yet invested in available and fairly old technologies; they had neither X-ray department nor clinical laboratory nor physical therapy. Today’s hospitals are the most capital-intensive facilities around, with enormous sums invested in ultra sound, body scanners, nuclear magnetic imagers, blood and tissue analyzers, clean rooms, and a dozen more new technologies. Each of these brought with it the need for additional and expensive people without reducing by a single person the hospital’s existing staff. In fact, the worldwide escalation of health-care costs is the result, in large measure, of the hospital’s having become an economic monstrosity. Being both highly labor-intensive and highly capital-intensive, it is, by any economist’s definition, simply not viable economically. But the hospital has at least significantly increased its performance capacity. In other areas of knowledge or service work there are only higher costs, more investment, and more people.
Only massive increases in hospital productivity can stem the health-care cost explosion. And these increases can only come from “Working Smarter.”
Neither economist nor technologist gives star billing to Working Smarter as the key to the productivity explosion; the former features capital investment, the latter, technology. But Working Smarter, whether called scientific management, industrial engineering, human relations, efficiency engineering, or task study (the modest term Frederic W. Taylor himself favored)—has been the main force behind the productivity explosion. Capital investment and technology were just as copious in the then developed countries in the first hundred years of the Industrial Revolution—i.e., in the century before Taylor—as they have been in the century since. But only when Working Smarter began to have an impact did productivity in making and moving things take off on its meteoric rise. Still, in making and moving things Working Smarter is but one key to increased productivity. In knowledge and service work it is the key.
Working Smarter means, however, very different things in knowledge and service work from what it means in making and moving things.
III
When Frederic Taylor started what later became Scientific Management by studying the shoveling of sand, it never occurred to him to ask: “What is the task? Why do it?” All he asked was “How is it done?” Almost fifty years later, Harvard’s Elton Mayo (1880-1949) set out to demolish Scientific Management and to replace it with what later came to be called Human Relations. But, like Taylor, he never asked, “What is the task? Why do it?” In his famous experiments at the Hawthorne Works of Western Electric, he only asked, “How can wiring telephone equipment best be done?” In making and moving things the task is always taken for granted.
But the first question in increasing productivity in knowledge and service work has to be: What is the task? What do we try to accomplish? Why do it at all? The easiest—but perhaps also the greatest—increases in productivity in such work come from redefining the task, and especially from eliminating what needs not be done.*
The oldest example is still the best one—mail-order processing at the early Sears, Roebuck. Between 1906 and 1908 Sears eliminated the time-consuming counting of money in incoming mail orders. In those days there was neither paper money nor checks but only coins. Hence, the money envelopes in the incoming order were weighed automatically: if the weight tallied with the amount of the order within fairly narrow limits, the envelopes were not even opened. Similarly, Sears eliminated the even more time-consuming detailed recording of each incoming order. It scheduled order handling and shipping according to the weight of the incoming mail, assuming forty orders for each pound of mail. These two steps increased the productivity of the entire mail-order operation ten-fold within two years.**
A major insurance company has recently increased the productivity of claims settlement about five-fold—from an average of fifteen minutes to three minutes per claim—by eliminating detailed checking for all but claims for very large sums. Instead of verifying thirty items—as had always been done—only five are being checked now: whether the policy is still in force; matching its face amount with the amount of the claim; matching the name of the policy holder with the name on the death certificate; matching the name of the beneficiary on the policy with the name of the claimant. What led to this productivity increase was asking the question: “What is the task?” And then the answer came fairly easily: “It’s to pay death claims as cheaply and as fast as possible”—and all that is now needed to control the process is to work through a small sample, that is, through every fiftieth claim, the traditional way.
A few hospitals have eliminated most of the laborious and expensive admissions process. They now admit all patients the way they used to admit emergency patients who are brought in unconscious or bleeding and unable to fill out lengthy forms. They asked, “What is the task?”—and the answer was to identify the patient’s name, sex, age, address, and how to bill. This information is found, however, on the insurance identification practically all patients carry.
Another example: a well-known private college has been able to cut its financial-aid staff from eleven full-time clerks to one or two people who work in financial aid for only a few weeks a year. Like other institutions of its kind, the college admits qualified applicants without regard to their ability to pay, with the financial-aid office then determining what tuition reduction an applicant can be given. This was done—and in most colleges is still being done—by laboriously working through a long and detailed form submitted by each applicant. But for 95 out of each 100 applicants financial aid is actually determined by very few factors. Being told the family income; the value of the family home; what, if any, additional sources of income there are—e.g., from a trust fund—and whether there are siblings presently paying college tuition, the computer figures out in a few seconds how much financial aid will be offered. The two part-timers are needed only to winnow out the five percent of unusual cases—the applicant who is a star athlete or a National Scholarship winner—which are then easily dealt with by the dean and a small faculty committee in a few afternoon hours.
These are all examples of service work. In knowledge work, however, defining the task and getting rid of what needs not be done are even more necessary and produce even greater results.
I know one significant example: the way a major multinational company redefined its strategic planning. For many years a planning staff of forty-five brilliant people carefully prepared “strategic scenarios” down to minute details. It was first-class work, and stimulating reading, everybody admitted. But it had minimum operational impact. A new CEO asked, “What is the task?” His answer: “It isn’t to predict the future. It is to give our businesses direction and goals and the strategy to attain these goals.” It took four years of hard work and several false starts. But now the planning people—still about the same number—work through only three questions for each of the company’s businesses: What market standing does it need to maintain leadership? What innovative performance does it need to support the needed market standing? What rate of return is the minimum needed to earn the cost of capital? And then the planning people together with the operating executives in each business work out broad strategy guidelines to attain these goals under different assumptions regarding economic conditions. The results are far simpler and far less pretentious than the old-style plans were, and far less elegant. But they have become the “flight plans” that guide the company’s businesses and its senior executives.
Except for this company I have not heard, however, of any case where the questions What is the task? and Why do it? have so far been asked in respect to knowledge work.
IV
In making and moving things people do one task at a time. Taylor’s laborer shoveled sand; he did not also stoke the furnace. Mayo’s wiring-room women soldered, they did not also test finished telephones on the side. The Iowa farmer planting corn does not get off his tractor between rows to attend a meeting. Concentration is not unknown in knowledge and service work. The surgeon does not take telephone calls in the operating room; nor should the lawyer while in consultation with a client. But in organizations—and that’s where most knowledge and service people work—there is growing splintering. The people at the very top can sometimes concentrate themselves, though far too few even try. But the people who actually do most of the knowledge and service work in organizations—engineers, teachers, salespeople, nurses, middle managers in general—carry a steadily growing load of busy work, additional activities that contribute little or no value and that have little or nothing to do with what these people are qualified and paid for.
The worst case may be the nurse in the American hospital. We hear a great deal about the shortage of nurses. But how could we possibly have one? The number of graduating nurses entering the profession has gone up steadily for a good many years. At the same time the number of bed patients has been going down sharply. The explanation of the paradox: nurses now spend only half their time doing what they have learned and are being paid for—that is, nursing. The other half of their shift is taken by activities that do not require the nurse’s skill and knowledge, add neither health-care nor economic value, and have little or nothing to do with patient care and patient well-being—primarily, of course, the ever swelling avalanche of paperwork for Medicare, Medicaid, insurers, the billing office, and the prevention of malpractice suits.
The situation in higher education is not much different. Every study reports that faculty in colleges and universities spend steadily increasing hours in committee meetings rather than in the classroom, in advising students, or in research. But few of these committees would ever be missed. And they would do a better job and in less time if they had three instead of seven members.
Salespeople are just as splintered. In the department store they now spend so much time serving the computer that they have little time serving the customer—the main reason, perhaps, for the steady decline in their productivity as producers of sales and revenues. Field sales representatives spend up to one third of their time filling out reports of all kinds rather than calling on customers. And engineers sit through meeting after meeting when they should be busy at their work stations.
This is not job enrichment; it is job impoverishment. It destroys productivity. It saps motivation and morale. Nurses, every attitude survey shows, bitterly resent not being allowed to do what they went into nursing for and are trained to do—to give patient care at the patient bed. They also—understandably—feel that they are grossly underpaid for what they are capable of doing while the hospital administrator—equally understandably—feels that they are grossly overpaid for the unskilled clerical work they are actually doing.
The cure is fairly easy, as a rule. A few hospitals have taken the paperwork out of the nurses’ job and given it to a floor clerk who also answers the telephone calls from friends and relatives of patients and arranges the flowers they send in. All of a sudden, these hospitals had a surplus of nurses. The level of patient care and the hours nurses devote to it went up sharply. Yet the hospitals could cut the number of nurses needed by a quarter or a third, and could thus raise nurses’ salaries without incurring a higher nursing payroll.
To do this requires that we ask in respect to every knowledge and service job: “What do we pay for?” “What value is this job supposed to add?” The answer is not always obvious or uncontroversial. One department store that raised the question in respect to its salespeople on the floor answered: “Sales.” Another one in the same metropolitan area and with pretty much the same kind of clientele answered: “Customer service.” Each answer led to a different restructuring of the jobs on the sales floor. But each store achieved, and fairly fast, substantial increases in the revenues generated by each salesperson and each department, that is, in both productivity and profitability.
V
For all their tremendous worldwide impacts Frederic Taylor and Scientific Management have had a bad press, especially in academia. One reason, perhaps the main one, is the unrelenting campaign America’s labor unions waged against both in the early years of this century. The unions actually succeeded in banning any kind of work study in army arsenals and naval shipyards, where in those years practically all defense production was done in this country.
The unions of 1911 did not oppose Taylor because they thought him pro-management or anti-labor (he was neither). His unforgivable sin was his assertion that there is no such thing as skill in making and moving things. All such work, Taylor asserted, was the same. All could be analyzed step by step as a series of unskilled operations that then could be put together into any kind of job. Anyone willing to learn these operations would be a “first-class man,” deserving “first-class pay.” He could do the most highly skilled work and do it to perfection.
But the unions of Taylor’s time—and especially the highly respected and extremely powerful unions in arsenals and shipyards—were craft monopolies. Their power base was their control of an apprenticeship of five or seven years to which, as a rule, only relatives of members were admitted. They considered their craft a “mystery,” the secrets of which no member was allowed to divulge. The skilled workers in the arsenals and navy yards in particular were paid extremely well—more than most physicians of those times and triple what Taylor’s “first-class man” could then expect to get. No wonder that Taylor’s denial of the mystery of craft and skill infuriated these “aristocrats of labor” as subversion and pestilential heresy.
Most contemporaries, eighty years ago, agreed with the unions. Even thirty years later the belief in the mystery of craft and skill persisted, and also in the long years of apprenticeship needed to acquire either. Hitler, for instance, was convinced that it would take the U.S. at least five years to train optical craftsmen, and modern war requires precision optics. It would therefore take many years, Hitler was sure, before America could field an effective army and air force in Europe—the conviction that made him declare war on America when Japan attacked Pearl Harbor.
We now know that Taylor was right. The U.S. did indeed have almost no optical craftsmen in 1941. And modern war does indeed require precision optics, and in large quantities. But by applying Taylor’s Scientific Management the U.S. trained in a few months semiskilled workers to turn out more highly advanced optics than the Germans with their craftsmen ever did, and on the assembly line to boot. And by that time Taylor’s first-class men with their increased productivity also made a great deal more money than any craftsman of 1911 could ever have dreamed of.
Eventually knowledge work and service work may turn out to be like work making and moving things—that is, “just work,” to use an old Scientific Management slogan. At least this is the position of the more radical proponents of Artificial Intelligence, Taylor’s true children or grandchildren. But for the time being, knowledge and service jobs must not be treated as just work. They cannot be assumed to be homogeneous. They must be treated as falling into a number of distinct categories—probably three. Each requires different analysis and different organization. In making and moving things the focus in increasing productivity is on work. In knowledge and service work it has to be on performance.
To be specific: for some jobs in knowledge and service work performance means quality. One example is the research lab, in which quantity—that is, the number of results—is quite secondary to their quality. One new drug generating annual sales of $500 million and dominating the market for a decade is infinitely more valuable than twenty “me-too” drugs each with annual sales of $20 or $30 million. The same holds for basic policy or for strategic decisions. But it also applies to much less grandiose work—the physician’s diagnosis, for instance, or packaging design, or editing a magazine.
Then there is a wide range of knowledge and service jobs in which quality and quantity together constitute performance. The salesperson’s performance on the department-store floor is one example. A “satisfied customer” is a qualitative statement, and indeed not so easy to define. But it is as important as the amounts on the sales tickets, or the quantity of output. In architectural design quality largely defines performance. In the draftsman’s work quality is an integral part of performance. But so is quantity. And the same applies to the engineer; to the sales rep in the local stockbroker’s office; to the medical technologist; to the branch manager of the local bank; to the reporter, to the nurse; to the claims adjuster for the automotive insurer—in fact, to a vast range of knowledge and service jobs. Performance in them is always both, quantity and quality. To increase productivity in these jobs therefore always requires work on both.
Finally, there are a good many jobs—filing, handling death claims in the life insurance office, making beds in the hospital—in which performance is similar to performance in making and moving things. Quality is a condition and a restraint. It is external rather than in itself performance. It has to be built into the process. But once this has been done, performance is largely defined by quantity—e.g., the number of minutes it takes to make a hospital bed the prescribed way. These jobs are, in effect, “production jobs” even though they do not result in making and moving things.
Thus increasing productivity in knowledge and service work requires thinking through into which category of performance a given job belongs. Only then do we know what we should be working on. Only then can we decide what needs to be analyzed, what needs to be improved, what needs to be changed. For only then do we know what productivity means in a specific knowledge or service job.
VI
There is more to increasing productivity in knowledge work and service work than defining the task, concentrating on the task, and defining performance. We do not yet know how to analyze the process in jobs in which performance predominantly means quality. We need to ask instead, “What works?” For jobs in which performance means both quality and quantity, we need to do both: ask what works and analyze the process step by step and operation by operation. In production work we need to define the quality standards and build them into the process, but the actual productivity improvement then comes through fairly conventional industrial engineering, that is, through task analysis followed by putting together the individual simple operations into a complete “job.”
But the three steps outlined above will by themselves produce substantial productivity increases—perhaps most of what can be attained at any one time. They need to be worked through again and again—maybe every three or five years, and certainly whenever we change work or its organization. But then, according to all the experience we have, the resulting productivity increases will equal, if not exceed, whatever Industrial Engineering, Scientific Management, or Human Relations ever achieved in making and moving things. In other words, they should by themselves give us the “productivity revolution” we need in knowledge and service work.
But on one condition only: that we actually apply what we have learned since World War II about increasing productivity in making and moving things: the work has to be done in partnership with the people who hold the knowledge and service jobs, the people who are to become more productive. The goal has to be to build responsibility for productivity and performance into every knowledge and service job regardless of level, difficulty, or skill.
Frederic Taylor has often been criticized for never once asking the workers whose jobs he studied; he told them. Nor did Elton Mayo ever ask—he also told them. But there is also no record of Sigmund Freud’s ever asking patients what they thought might be their problem. Neither Marx nor Lenin ever thought of asking the masses. And it did not occur to any High Command in World War I or World War II to ask junior officers or enlisted men in the front lines about weapons, uniforms, or even food (in the American armed forces this became the custom only during Vietnam). Taylor simply shared the belief of his age in the wisdom of the expert. He thought both workers and managers to be “dumb oxen.” Mayo, forty years later, had high respect for managers, but workers, he thought, were “immature” and “maladjusted” and needed the expert guidance of the psychologist.
When World War II came, however, we had no choice; we had to ask the workers. In the plants we had neither engineers nor psychologists nor foremen—they were all in uniform. And when we asked the workers, we found—to our immense surprise, as I still recollect—that the workers were neither dumb oxen nor immature and maladjusted. They knew a great deal about the work they were doing, its logic and rhythm, the tools, the quality and so on. Asking them was the way to get started on productivity and quality.* At first only a few businesses accepted this novel proposition—IBM was perhaps the first one, and for a long time also the only one. Then in the late ’50s and early ’60s it was picked up by the Japanese, whose earlier attempts to return to prewar autocracy in the plant had collapsed in bloody strikes and near civil war. Nowadays, while still far from being widely practiced, it is at least generally accepted in theory that the workers’ knowledge of their job is the starting point for improving productivity, quality, and performance altogether.
In making and moving things, partnership with the responsible worker is, however, only the best way—after all, Taylor’s telling them worked, too, and quite well. In knowledge and service work, partnership with the responsible worker is the only way; nothing else will work at all.
Two more lessons that neither Taylor nor Mayo knew: increased productivity needs continuous learning. It is not enough to redesign the job and then to train the worker in the new way of doing it—which is what Taylor did and taught. That’s when learning begins, and it never ends. Indeed, as the Japanese can teach us—it came out of their ancient tradition of Zen learning—the greatest benefit of training is not in learning the new. It is to do better what we already do well. And equally important, an insight of the last few years: knowledge people and service people learn the most when they teach. The best way to improve the productivity of the star salesperson is for him or her to present “the secrets of my success” at a sales convention. The best way for the surgeon to improve his or her performance is to give a talk about it at the county medical society. The best way for a nurse to improve her performance is to teach her fellow nurses. It is often being said that in the information age every enterprise has to become a learning institution. It also has to become a teaching institution.
Conclusion
Developed economies face economic stagnation if they do not raise the productivity of knowledge and service work. Even Japan—still heavily manufacturing-intensive—can no longer expect increased productivity in making and moving things to sustain economic growth. Even there the great majority of working people are knowledge workers and service workers with productivities as low as those in any other developed country. And when farmers are down to a mere 3 percent of the employed population, as they are in the U.S. and Japan—and in most of Western Europe as well—even record increases in their productivity such as the 4 to 5 percent the U.S. boasts of add virtually nothing to the country’s overall productivity, its wealth, its competitiveness.
Raising the productivity of knowledge and service work must therefore be an economic priority for developed countries. Whichever country first succeeds in satisfying it will economically dominate the twenty-first century. And the key is raising the productivity of knowledge work, on all levels.
But the need to raise the productivity of service work may be even greater. It is a social priority in developed countries. Unless it is met, the developed world faces increasing social tensions, increasing polarization, increasing radicalization. It may ultimately face a new class war.
In the knowledge society, access to opportunities for careers and advancement is becoming limited to people of advanced schooling, people qualified for knowledge work. But such people will always be a minority. They will always be outnumbered by people who lack the qualifications for anything but fairly low-skilled service work. In their social position such people are comparable to the proletarians of years ago: the poorly educated, unskilled masses who thronged the exploding industrial cities and streamed into their factories.
When Frederic Taylor started his work on the productivity of making and moving things in the early 1880s, class war between industrial proletarian and “bourgeois”—its reality but even more the fear of it—obsessed every developed country. Fear of it motivated Taylor to start his work. And the belief in the inevitability of class war was by no means confined to the Left. A generation before Taylor, Benjamin Disraeli, the greatest of the nineteenth-century conservatives, had predicted it. And Henry James, the chronicler of American wealth and European aristocracy, was so frightened by it that he made it the central theme of one of his most haunting novels, The Princess Casamassima—it appeared in 1885, two years after Marx’s death and four years after Taylor had begun studying the productivity of shoveling sand.
Marx has been proven wrong in his prophesy of the inevitable “immiseration” of the proletariat leading inevitably to a revolution. But when he made these prophesies they seemed eminently reasonable—indeed, almost self-evident—to well-informed and highly intelligent contemporaries. What defeated Marx and Marxism in the end was the rising productivity of making and moving things—that is, in essence, the work Taylor started. It gave the proletarians the productivity that allowed their being paid a middle-class income and to achieve middle-class status despite lack of skill, wealth, and education. By the time of the Great Depression—when, according to Marx and the Marxists the “Proletarian Revolution” should surely have become triumphant—the proletarian had become a bourgeois.
Unless the productivity of service work is rapidly improved, both the social and the economic position of that large class—as large a group as people making and moving things ever were at their peak—must steadily go down. Real incomes cannot for any length of time be higher than productivity. The service workers may use their numerical strength to get higher wages than their economic contribution justifies. But this only impoverishes all of society with everybody’s real income going down and unemployment going up. Or the incomes of the unskilled service workers are allowed to go down in relation to the steadily rising wages of affluent knowledge workers, with an increasing gulf between the two groups, an increasing polarization into classes. In either case service workers must become alienated, increasingly bitter, increasingly see themselves as a class apart. And the escape hatch—the productive and therefore well-paid jobs for poorly educated and poorly skilled people in making and moving things—is closing rapidly. By the end of this century the number of such jobs in every developed country will be at most two fifths of what it was at their peak only forty years ago.
We are in a much better position than our ancestors were a century ago. We know what Marx and his contemporaries did not know: productivity can be raised. We also know how to raise it. And we know this best for the work where the social need is most urgent: unskilled and semiskilled service work—the jobs in maintenance, whether of factories, schools, hospitals, or offices; in restaurants and in supermarkets; in a host of clerical jobs. This, as has already been stated, is production work—and what we have learned during the past hundred years about increasing productivity applies to such work with a minimum of adaptation. Indeed, in such work substantial productivity increases have already been achieved. Some multinational maintenance companies—both in the U.S. and in Europe—have systematically applied to low-skilled service jobs the approaches this article discusses. They have defined the task; concentrated work on it; defined performance; made the employee a partner in productivity improvement and the first source of ideas for it; and built continuous learning and continuous teaching into the job of every employee and of every work team. They have substantially raised productivity—in some cases, doubled it. This then has allowed them to raise wages. But it has also greatly raised self-respect and pride. It is, incidentally, by no means coincidence that these increases were achieved by outside contractors rather than by the organization (e.g., the hospitals) in which the service people actually do their work. To obtain major productivity increases in production-type service work usually requires contracting out such work to a firm that has no other business, understands this work, respects it, and offers opportunities for advancement for low-skill service workers—e.g., to become its local or regional manager. The organizations in which this work is being done—e.g., the hospital in which the people work who make the beds, or the college whose students they feed—neither understand such work nor respect it enough to devote to it the time and hard work needed to make it productive, no matter how much they pay for it.
The task is known and doable, but the urgency is great. To raise the productivity of service work cannot be done by governmental action or by politics altogether. It is the task of managers and executives in businesses and nonprofit organizations. It is, in fact, the first social responsibility of management in the knowledge society.
[1991]