Published: 25 April 2024
For decades, businesses de-emphasized productivity, favoring other growth routes. This must change due to supply constraints, reglobalization, talent crises and higher interest rates. Executive leaders should convince CEOs a productivity transformation program is needed, or AI’s power will be wasted.
Productivity growth has declined in advanced economies for decades as businesses pursued other routes to growth, but situational and structural pressures are now weakening those growth vectors.
Productivity must be used to improve profit margins as cost-cutting alone will not suffice.
CEOs are excited by the potential of more autonomous business and an AI-augmented workforce.
Pivoting to deep structural productivity is required for breakthrough progress.
Executive leaders should work with their CEOs and boards to:
Place deep structural productivity breakthroughs at the center of business strategy.
Redefine product or value output definitions and labor and physical asset productivity metrics at the top level
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Analysts:
Mark Raskino, Kristin Moyer, Stephen Smith, Graham Waller
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