Productivity is an old word in business. It’s another way of describing efficiency, especially cost efficiency.
Anyone who spends time on Google or Facebook or reading about them will see the results of their high levels of productivity all over the place. They include:
- Low prices in advertising
- Massive market share
- Automated customer service
- Nearly legendary staff work hours
Low Prices in Advertising
The low prices are the result of highly efficient processes for targeting ads based on geography and demographics. They also are the result of automated processes for creating and publishing ads that require nearly no human labor.
By driving down costs and driving up massive market share, Google and Facebook can thrive on enormous volumes of searches that keep their prices low.
A $50 ad campaign is meaningless to traditional media such as print, cable and broadcast because they have much more limited ad inventory. But the online giants can make giant profits by delivering millions of those campaigns at a small price.
Massive Market Share
Online productivity is a strategy that leads to higher volume. Higher volume leads to more eyeballs, page views, ad impressions, unique visitors and any other metric that matters.
A simple example illustrates the point. A reporter at a major metropolitan newspaper might write on average about three articles a week. Those three articles go into the newspaper and most likely onto the newspaper’s website.
If that reporter wrote 10 articles a week, the majority of them would not likely appear in the newspaper because of space limitations. But they would easily appear online because no such limitations exist. The paper’s online market share will increase because of more content, more articles in search engine indexes and more search visits.
The online giants don’t need people to produce the content. The search engines do it by automating the processes of finding and ranking websites and their articles. Cheap technology drives up search engine productivity. The social media giants thrive because their users produce the content for them. Free labor drives up social media productivity.
That said, human processes also can benefit from improving productivity. Software can do grammar checks on a person’s article. Online research can check facts much more quickly than visiting the library. A little planning and even mindfulness of time can lead to more articles in smaller amount of time.
Automated Customer Service
The decline of human customer service is a given strategy to save money in the current economy. A phone call to support often leads to long wait times for a response. The response may come from someone with poor English who works in a Third World country.
Customer service also comes in the form of chat boxes, phone trees, voice messaging, emails and “knowledge base” article searches. In the near future, expect customer service to become entirely the province of robots.
Either way, the human element is going away. Companies are using technology with customer service to increase productivity and cost efficiency. They want to involve costly human support as little as possible. In turn, this productivity brings down prices or at least slows their growth.
Legendary Staff Workloads
Marissa Mayer, the former CEO at Yahoo and one of Google’s first employees, is one of many examples about human productivity in the online environment. As she told Bloomberg BusinessWeek:
“The other piece that gets overlooked in the Google story is the value of hard work. When reporters write about Google, they write about it as if it was inevitable. The actual experience was more like, ‘Could you work 130 hours in a week?’
“The answer is yes, if you’re strategic about when you sleep, when you shower, and how often you go to the bathroom. The nap rooms at Google were there because it was safer to stay in the office than walk to your car at 3 a.m. For my first five years, I did at least one all-nighter a week, except when I was on vacation — and the vacations were few and far between.”
Anyone who worked at a traditional media company would be hard pressed to remember an executive or senior manager who regularly worked 130 hours a week.
To be fair, most normal human beings can’t work that much. But even a 50-hour workweek is possible for any normal human being, and it is 25 percent more productive than a 40-hour week.