Along with my colleagues Jeff Hesse and Terry Holliday, I have been trying to understand what makes some teams of knowledge workers more productive than others. In particular, we have focused on people who work in firms that create lots of value as measured by earnings before interest, taxes and depreciation (EBITDA) per employee.
In our work so far, we've discovered the primary difference in how they do work is that they have the power to shape their work environment – which means that they can customize, upgrade, and even create new information technology to propel their productivity
If one looks throughout history, workers' productivity has always been proportional to the quality of the tools they use. In physical work, a man with a backhoe is much more productive than one with a shovel. Yet many firms – in their desire to save money by creating "standard" information environments – actually hamper the potential productivity of their knowledge workers. It's the knowledge work equivalent of outlawing backhoes.
Our research at investment banking, asset-management, insurance, and computer-software firms found that they empowered their high-EBITDA employees to buy the non-standard tools they think they need to improve their performance. An easy test of whether your firm is doing the same is to analyze how hard it for someone to to get an additional computer screen, a known productivity-booster. Given how cheap screens are these days, if it's hard, your restrictions are probably too tough.
But it's not just the window on the digital world that may need a renovation; it may be the quality of the entire infrastructure. For example, one investment bank we researched has an infrastructure team that created a massive internal computing cloud that allows any authorized trading group to configure hundreds or even thousands of computers within a week. This technology capability exceeds anything that this firm could buy from Google or IBM.
Who does all this fancy design and integration? Many of the high performance teams that we studied had a member we christened the "bitsmith." Bitsmiths are people who have deep knowledge of both the work content and the tools used to support the work. In other words, they are almost as expert in derivatives or computer design as they are in computer-programming languages. Because they understand both the domain and the tools, bitsmiths can take an idea from concept to implementation quickly .
For centuries, each village had its own blacksmith who fashioned new tools from iron. These tools – from the farmer's plow to the wagoneer's horseshoes – made the entire village more productive. Likewise, the modern-day IT smithy can help make high-value-added knowledge workers much more productive.
Is your firm being penny wise and pound foolish by making highly paid knowledge workers suffer with slow, inadequate capabilities?
Do your firm's teams of high-performance knowledge workers have bitsmiths? If not why not?
This post is also published at Harvard Business Review.