Revealing Your Resources and Reducing Organizational Drag
Michael Mankins is a Partner at Bain & Company’s San Francisco office and a leader in the firm’s Organization practice. With 30 years of consulting experience, much of Michael’s work has been focused on strategic and organizational initiatives that drive performance and long-term value.
His book, Time, Talent, Energy: Overcome Organizational Drag & Unleash Your Team’s Productive Power, is built around the concept of obtaining competitive success through the smart management of scarce resources. Those resources, which Michael and co-author Eric Garton have identified as time, talent and energy, have dissolved the previous school of thought when it comes to scarce organizational resources.
Your book, Time, Talent, Energy, focuses on those three specific aspects of an organization. Why did you decide to focus on those aspects and how are they integral to the process of any given organization?
Michael: Bain is, in essence, a strategy consulting firm and a definition of strategy is the skillful investment or allocation of scarce resources to outpace the competition. I’m in my thirtieth year of consulting and for most of my business career, if you asked an executive what the scarcest resource was — they would say financial capital.
Financial capital is no longer scarce. It’s super abundant and, for most companies, cheap. What’s scarce for most companies now is good ideas and good ideas don’t just materialize, they’re the product of people. People that have the time to dedicate to their work, the talent to bring creativity and ingenuity to the work they do and the willingness to dedicate at least a portion of their discretionary energy to serving customers leading into the success of the company or organization itself.
The real scarce resources over the next three decades are really time, talent and energy. That’s what drives the quality of ideas, the ability to execute those ideas, the number of those ideas. That’s what it’s really going take to outpace the competition given that financial capital is now super abundant and relatively cheap.
How did you initially recognize this issue of scarce resources and why do you think so many organizations have neglected to address them?
Michael: It first started with time. Around 2008, it became possible to start using data mining tools to look at e-mail, calendar, IM and other data to actually understand how an organization invests its collective time. The first observation was time is money, we all recognize that, but it’s not treated as though it’s money and it’s actually not managed at all. Most organizations have no idea how they spend their collective time and therefore don’t know how to liberate unproductive time.
Eliminating organizational drag can only go so far. If you really want to boost productivity, we discovered that you have to treat difference-making talent in a unique and creative way and discretionary energy also impacts the level of productivity for each individual and collectively as the organization.
We quickly realized that if you’re trying to link to productivity overall, workforce productivity and in particular white-collar productivity, you also have to add in the other dimensions of scarcity which are essentially difference-making or star talent and discretionary energy. That’s how we came to time, talent and energy.
Could you give a brief breakdown of the “organizational drag” concept and what that entails from a management perspective?
Michael: We think of organizational drag as being the bureaucratic processes and procedures that consume time, but don’t actually lead to productive output.
The typical manifestation of organizational drag is excessive meeting time or excessive e-communication. Those are manifestations of structures, processes and procedures which result in more interactions being required than should be required in order to produce a given level of output.
The total amount of organizational time dedicated to meetings has grown seven to eight percent a year since 2008. It’s not because there’s more meetings, although there are more, it’s not because meetings are longer, although they are, it’s because the number of attendees per meeting has grown significantly over that time period. The result is the total amount of organizational time dedicated to meetings grows by seven to eight percent, which means it doubles every nine years. At that rate, there’s going to be very little time left to do any work during the week. You’ve got to essentially deal with the root cause of organizational drag in order to liberate unproductive time. You have to either simplify the structure or deal head on with a culture of collaboration for collaboration’s sake.
We advise most of our clients to start with the structural and process elements of complexity first because they’re easier to deal with organizationally. Then, over time, try to change behaviour so that the culture of collaboration for collaboration’s sake starts to fade into the background.
How does the physical office environment of an organization impact time, talent and energy?
Michael: It can impact all three, but the two I think most directly are energy and time. Depending upon how the office environment works, you can waste a lot of time in an office environment that’s poorly laid out and not matched to workflow. That’s basic industrial engineering 101. I would say that’s a way of minimizing drag within a given structure and processes.
It is true that the office environment greatly impacts the energy you bring to work and the nature of how you get work done. I happen to work a lot in technology and you find the new layouts that are flatter where executives are not in offices on some high floor but engaged at the centre of their teams does change the way work is done, but more importantly helps facilitate higher levels of engagement among team members. If the leader is effective, there are higher levels of inspiration in the leadership team itself.
If you look at our research, a big driver of productivity, not as big as talent, is energy, which is driven by the level of engagement and inspiration of the workforce. We had a statistic in the book that said engaged employees are about 45 percent more productive than satisfied employees and the office environment has an impact on engagement. Inspired employees are 125 percent as productive as satisfied employees, meaning you’d have to hire 2.25 satisfied employees to produce as much as one inspired employee. Anything that can be done to tip the scales on engagement and inspiration leads to higher levels of discretionary energy be invested at work and higher levels of productivity.
What value do you think people in the field of facilities management provide when it comes to time management in the workplace?
Michael: The area where I think facilities matters most is in talent, which is the effectiveness of teams. In the book, Time, Talent, Energy, our research basically says the biggest difference between the best and the rest is actually in the area of talent. The best companies deploy their talent more effectively and they lead it more effectively. The result is about a 20 percent differential in productivity, just on that element alone, between the best and the rest. That’s one area where the jury is still out, but there’s pretty good research by Google and others that suggests proximity matters to the effectiveness of teams. It’s fairly difficult for engineering teams to be effective, for example, if they’re dispersed — it’s not impossible, but it’s difficult.
As you’re planning facilities and essentially managing the actual footprint, you have these counterbalancing effects. You want greater utilization of the facilities that you own, that almost argues for fewer facilities or fewer square feet per person, even arguing for things like telecommuting. Then you have a counterbalance: there are certain teams where if you don’t have physical space for them to actually work together as a team, it can have an adverse impact on the productivity of that team. It’s become increasingly difficult, you have to classify job types into those that require physical proximity for productivity and those that don’t, formulate the workforce plan around that then match the facilities plan of that workforce plan.
That’s where I think it’s trickier than it’s ever been. Telecommuting has become not only popular, it’s become highly effective for many roles — but that doesn’t mean it’s highly effective for every role. Unless you build in the exceptions, you can’t get a facilities plan that leads to the highest level of productivity.