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By Ed Sullivan  

Will the ongoing struggles of the U.S. economy lead companies to forego facility investments designed to boost productivity?

Tough economic times call for hard-headed business decisions. Cost cutting is the order of most days. And that can be bad news for investments designed to boost productivity — a soft subject if there ever was one.

But maybe it doesn’t have to be that way. For one thing, productivity and cost control are not mutually exclusive. In fact, it can be just the opposite. When companies moved to alternative space, they usually didn’t increase the amount of space they used — they reduced it. And when companies developed ways to get employees into new spaces more quickly, they also cut the cost of churn.

But productivity is more than cost control. In the long term, it’s more important. That’s point No. 2. Measures to increase productivity can be worth investing in even if they don’t reduce costs. That isn’t an easy case to make even when the economy is rolling. But maybe the headlines will help.

Productivity grew at a fast pace in the first quarter of this year; the results for the second quarter due this month will be closely watched. For top executives battered by bad economic news — falling stock prices, accounting scandals, uncertainties about recession and recovery — productivity growth offers hope for the future and good news for the present. Will that make top executives more receptive to the case for investments to boost productivity? There’s only one way to find out.

Edward Sullivan

Building Operating Management
August 2002

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  posted on 8/1/2002   Article Use Policy

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