Value, productivity and human interaction

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One of the key concepts driving change in business today is productivity. Work processes are augmented, reorganizations implemented and massive ICT investments made to increase productivity. In simple terms, productivity is the relationship between input and output. Increasing productivity is getting more output with less input. Input, as defined in industry, is typically labor and capital. The output is the firm’s product, and its value is defined through how much people are willing to pay for it. This all seems pretty clear-cut. However, many things that were clear-cut in industry may not directly apply to knowledge intensive business, like services. In many cases it even seems that concepts derived from industry are entirely inappropriate. Interesting questions arise when we approach this discrepancy: How do you define value, if work is the development of knowledge? What is productivity if work occurs in interaction? What are labor and capital in information intensive work?

Abundance of information has changed not only how people work but also what work is. Increasing numbers of people are working in business that is considered knowledge intensive. The service industry is growing and especially ICT supported services are predicted to increase. This work is centered on information and interaction. Value is created through learning of the individuals involved.

The possibilities provided by the liberation of information sound awesome. However, it seems that current concepts of productivity and value pose some problems. If these key concepts could be updated with current understanding how value is experienced, it would dramatically expand the possibilities for value creation in any information intensive business.

Service is typically defined as paying someone else to do things for you. Today, a number of services can be thought of as not a purchased favor but rather the purchase of help for development of thought. As automation continues, it may be that services conducted in the future will solely consist of interaction that requires a human counterpart. The experience of value in these types of services does not happen upon just receiving the service, but during interaction with the service provider. It follows that the measures we currently use for quantifying the productivity of services do not capture key processes. We look at input and output and are left in the dark about the most important thing in service – interaction.

Productivity  in information intensive business is often sought for by applying new technology. However, in many cases, technology can do just the opposite. The fault most often lies in wrong definition of value that is contained within the technology we use. For instance, a mental health clinic may invest millions in software and ask its workers to spend hours documenting how many patients they see per day. This is done in order to see how productive the teams are, meaning the more patients they see the better. However, this technology does not manage to document the most important process pertaining to value – whether the interaction helps the patient get better or not. The input-output logic of productivity does not work when the main content of work is interaction with another human being. This is not to say that it is not important that input and output occur (e.g. that as many patients are seen as possible) but rather that how we define and measure productivity should primarily consist of other things, like the quality of interaction.

It is easy to blame the technology and say that well, the designer of the software obviously had no understanding of the work and what it is meant to attain. This also brings about the problem with software: someone else always designs it for you, approximating what you are trying to accomplish. However, the most pressing problem lies deeper than technology. Technology ultimately is a reflection of how work is defined in our culture. The problem is that we lack the understanding of what value really is in business that happens around human interaction.

Do we also lack the courage to question industry-driven concepts and think about what they have to do with human interaction in the first place? Human interaction lies (at the moment) beyond comprehensive modeling. It is ever changing and bafflingly complex and even the best scientists can’t surely predict it. But this complexity is just where value is experienced and where it truly occurs. Realizing this could stop us trying to buy assurance and security with predictions or statistics based on inadequate mathematics. Realizing this would help us find a deeper sense of worth in the work we do.

Thank you Esko Kilpi

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Esko Kilpi on Interactive Value Creation

The art of interaction, the design of digital and the science of social complexity

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