If I were to ask you when there has been a change in productivity in our history, what would you say? Chances are, your mind may go to the Model T assembly line of the 1900s, the rise of fast food service in the 1950s, or, perhaps more likely, to the very item you’re using to read this piece right now: the computer. personal and smartphone revolutions of the 1990s and 2000s. While these are apt examples, what is often overlooked is that behind all these innovations there are likely to-do lists. Yes, that very list that you always scratch off or keep running in the back of your mind.
In fact, if we go back even further to the 1790s, we find that the first iterations of to-do lists were in visionary inventor Benjamin Franklin’s daily schedule of common tasks, wealth planning articles, and his list of virtues and affirmations. in the autobiography. While he may not have invented the to-do list, he is often credited as a highly disciplined innovator who popularized this productivity tactic for self-improvement. This approach was later scaled and digitized with computers in the corporate world and likely served as a blueprint for pioneers like Henry Ford and Richard and Maurice McDonald to shape their businesses with growth, scale and productivity in center.
History doesn’t often repeat itself, but as the saying goes, it often rhymes, with today’s productivity era mirroring those earlier efforts to create a competitive advantage for companies – now in the age of AI.
Red 1960s office letter tray overflowing with assignments (Photo by H. Armstrong … [+]
Years ago, when I spoke to CEOs and other business leaders about how to build the financial capacity to drive growth, the conversation often focused on cost management. Questions included: Where can we increase efficiency? Is there any way to save costs in our facilities? Do we doubt jobs or workers? Another frequently asked question was whether to use a zero-based approach.
That strategy worked for a long time, but today’s conversations are changing. Leaders now consider cost inputs as one part of a larger equation. An increasingly important consideration is increased productivity, usually achieved through a combination of cost efficiency (or cost per unit) and effectiveness (ability to generate output), and in today’s era of rapid disruption led by technology, multiplied by generative AI. In fact, technology, data and AI, especially generation AI, are driving a reinvention of work, a reskilling of the worker and a reimagining of the workforce. These changes are improving ways of working, much like the to-do list that helped unleash double-digit productivity gains for centuries, up until the last two decades.
The new definition of productivity
To understand how productivity has changed, our recent Accenture analysis of 1,400 companies globally sought to assess what percentage of businesses experience year-over-year productivity growth and the behaviors these leaders exhibit. We found that the top 25% of companies are increasing their productivity by more than 8% per year on average, across all industries and geographies. This group, which we call “High Productivity Growth Companies,” successfully demonstrate that productivity is not just about cost reduction. It’s about creating more value with every dollar spent.
Today’s leaders must adopt a similar formulaic mindset: Long-term growth comes from reinvesting in their organization and in their people to continue building capabilities, expanding knowledge throughout their enterprise and, as technology grows , increasing the fluidity of technology. The data supports this. For every 1% increase in total expenses, these companies are seeing a 1.3% gain in revenue.
One European retailer, for example, discovered more than 100 potential initiatives that could increase its productivity after analyzing its organizational structure and processes. Based on its findings, the company invested in its supply chain, warehouses and new distribution options, all of which increased productivity and ultimately provided a competitive advantage.
How Gen AI can be a productivity multiplier
One thing that was not on any to-do list, until recently, has been the generation of AI and its potential as a productivity multiplier. However, that all changed in the last two years. Now, almost all (86%) leaders feel prepared to increase their investment in AI generation this year, with almost a quarter (23%) planning to use that investment in Strategy and M&A.
Our analysis shows that generation AI can affect more than 44% of working hours. Taking it a step further, we wanted to understand the two ways in which AI generation can impact tasks and define it in terms of financial performance. Our modeling identified two types of impact: time saved at 12.5% and quality improvements in task output at 8.5%. While the former is important, the latter is where the AI generation can significantly boost productivity growth and ultimately competitiveness.
By analyzing the latest academic and laboratory AI experiments, combined with cross-industry data on thousands of tasks, we found that business analysts experienced a 23% improvement in the accuracy of their financial and logistics projections when using Gen AI to analyze complex data sets. In the most creative and judgment-intensive roles, such as customer interactions, technology increases creativity by 130%.
This brings me to the fact that the key to using generation AI to its full extent lies in putting people at the center. High-productivity companies are a third (33%) more likely to prioritize training and continuous improvement, recognizing that high-quality improvement tasks require deeper human involvement. These organizations invest in their workforce to ensure they are prepared to use technology to increase productivity. By integrating their teams into this process through training, they also build trust and transparency, both of which are critical when facing change.
A global leader in engineering and technology, for example, tripled its digital maturity through targeted learning programs, equipping employees with future-ready skills while embedding innovation in its culture.
When I asked my colleague James Crowley, Head of Accenture’s Global Product Industry Practice about this, he said, “You can’t be one-dimensional when you’re solving for productivity.” In fact, he said, “When we looked at our analysis of 63,000 earnings transcripts as part of this research, it was clear that many CEOs continue to have a single-minded focus on cost management when they talk about productivity. But the reality is that productivity is primarily about the relationship between input – the effort required – and output – the value created. More than ever, leaders need to understand and focus on improving the relationship between the two.”
Simply put, companies can replicate the growth of their peers by investing in the future and using generational AI to amplify their efforts. We are already seeing productivity-leading companies that, while increasing costs by an average of 6%, are increasing revenues by 7%.
To-do list for today’s leaders
Franklin opened his daily schedules with the question, “What good shall I do this day?” This is an important question for us to ask not only as individuals in our daily lives, but as business and industry leaders. Strategic and sustainable growth requires a plan. It needs a strategy and it needs a focus.
While I may not fully agree with Franklin’s belief that the decision to make a plan is more important than the content of the plan, I often think of his famous quote, “If you fail to plan, you are planning to fail!” when you talk to other leaders.
The most important point I hope industry powerhouses and emerging players will take away from our research as they consider how to increase their competitiveness moving forward is the need to apply new ways of thinking about productivity in their enterprise. Learn from the missteps of companies that fail to adapt, or choose to boldly invest in the future by disrupting the status quo with innovations that power productivity growth.
