If you're scratching your head over the lackluster growth in U.S. labor productivity, you're not alone. A recent Wall Street journal piece shows that the numbers are especially grim in manufacturing, where productivity has been flatlining faster than a soda left open overnight. In the last 10 years, it's actually been declining:
Sure, one could argue that we're not automating enough. American manufacturers do lag in robot use compared to their Asian counterparts; but with the exception of Taiwan (and probably the very special case of semiconductors), straight-up automation doesn't seem to be a magic bullet.
The real roadblock resides in the outdated assumption that frontline jobs are filled with minimally capable people, and the top-down, control-driven management practices that come with it. These deny millions of employees the opportunity to enhance their skills and exercise their minds.
Although the total quality management and kaizen movements both emphasized employee empowerment, the basic bureaucratic approach still dominates. Consider that a 2021 Gallup survey found that only one in ten U.S. production employees strongly agreed with the statement “My opinions seem to count at work” and only 1 percent the statement “I take risks at my job that could lead to new products or solutions.” These numbers are far lower than the overall average for non-managerial employees, which is itself nothing to brag about.
As a result, a vast reservoir of human ingenuity is going untapped. This depresses the productivity of individual firms and the economy overall.
US manufacturers would do well to learn from companies like Nucor, which are able to offer industry-leading productivity as well as wages. That's not because they’re exceptionally generous but because their employees create exceptional value. They share a deep belief that “ordinary” employees, when given the chance to learn, grow, and contribute, are capable of extraordinary accomplishments. That conviction, when consistently acted upon, produces a workforce that’s deeply knowledgeable, relentlessly inventive, and ardently focused on the customer.
Reversing the productivity slump doesn't require a boatload of robots. It just takes commitment to building organizations that kindle the spark of everyday genius in each human being.
PS: For more on the Nucor management model and its applicability to US manufacturing, see our conversation with former CEO John Ferriola: