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For years when AT&T Inc. threw a retirement party, employees had to enter the names of attendees in the telecom company’s expense-reporting system. It was the kind of small annoyance that is an accepted part of office life for millions of white-collar workers.
But a technology team at AT&T figured the requirement, plus a similar one for service-anniversary parties, was costing its workers 28,500 hours a year that they could be spending on more important tasks. So the company scrapped it, and in the past two years has made more than 160 similar moves it estimates are saving employees nearly 3 million hours a year.
In ways big and small, America’s corporate leaders are on a renewed quest to become more efficient. Inflation remains high, profit margins are shrinking and turmoil in the banking sector has increased the likelihood that the U.S. economy tips into a recession. The threat of an economic contraction has put companies under growing pressure from investors to reduce waste and boost productivity. That has led to a wave of layoffs and other cost cutting.
Many companies are also moving beyond broad austerity measures and homing in on the minutiae of everyday work. They are rethinking processes and how employees do their jobs, with the goal of getting workers to make better use of their time. The efforts are permeating U.S. companies to a degree that executives say they haven’t seen in years.
In February, Meta Platforms Inc. Chief Executive Mark Zuckerberg declared 2023 “the year of efficiency” at the social-media company. Ford Motor Co. CEO Jim Farley vowed earlier this year to cut waste throughout the company and to spend each day looking for ways to improve.
AT&T is in the midst of a multiyear effort to slash $6 billion in costs by closing stores, laying off workers and streamlining operations after scrapping plans to build a media conglomerate. Part of the cost-cutting effort is what it calls Project Raindrops, an initiative to save money and time by simplifying and eliminating business processes—from expense reporting to email communications to manager approvals—that slow down workers’ daily flow.
“One mundane process may feel like a single raindrop, but when you have a multitude of that within the employee ecosystem, it creates a flood of extra work,” said Elizabeth Veazey, a vice president in AT&T’s technology organization who oversees the project.
Efficiency is about how work is done, and it is closely linked with productivity. If workers are more efficient—reducing the time and resources needed to complete a task—productivity should theoretically improve, too. Productivity, as narrowly defined by macroeconomists, measures the amount of output produced in one hour of labor.
How companies measure productivity varies. Some businesses consider the revenue or profit generated per employee. Others focus on projects delivered or new products shipped. Improved processes could also pave the way for companies to employ fewer people.
At some point, however, shaving time off workers’ tasks in microdoses reaches a limit in terms of cost savings. Companies ultimately still need innovation and investment to fuel long term growth, said Roger Martin, former dean of the Rotman School of Management at the University of Toronto and now an author and adviser to executives.
Labor productivity has largely stagnated in the U.S. over the past two decades despite advances in technology, according to research from the McKinsey Global Institute. Since 2005, productivity has grown 1.4% a year on average, below the long-term rate of 2.2% since World War II.
America’s obsession with efficiency can be traced back to the late 19th century when a factory foreman named Frederick Winslow Taylor studied workers on factory floors with stopwatches in an attempt to eliminate unnecessary movements from production lines. Mr. Taylor’s work—dubbed “scientific management”—inspired managers to more closely scrutinize processes, stripping them down to their most essential elements.
That discipline survived and morphed under other companies led by Toyota Motor Corp., which popularized an approach to manufacturing defined by an obsessive commitment to efficiency and constant self-assessment. Elements of that playbook are now being adopted in sectors well beyond manufacturing, from tech to finance to food service.
Meta is eliminating some projects, cutting layers of middle management and aiming to refocus the company as part of its efficiency drive. Since November, the Facebook parent has said it would lay off 21,000 employees, or nearly a quarter of its workforce.
At Airbnb Inc., the home-rental company “got religion” on staying efficient in 2020, when it laid off nearly 2,000 people early in the pandemic after expanding head count by 40% in 2019, said Dave Stephenson, chief financial officer. That growth was too fast, and reflected a bigger problem in setting company goals: “We just tried to do everything at once,” he said.
Airbnb has since aimed to be more disciplined in how it prioritizes projects, Mr. Stephenson said. “Instead of having 100 ideas come up from the bottom and spending weeks sifting through them to try to prioritize them, we take dozens of top-down [ideas] and try to say, ‘What is it that’s most important for us to get done now?’ ” he said.
Another favorite new target: meetings. Soon after announcing a temporary purge of some kinds of meetings in early January, Shopify Inc., which provides e-commerce tools for retailers, deleted 12,000 events from staffers’ calendars. The changes will free up a projected 322,000 hours in 2023 for the company’s 11,600 employees, Shopify said.
Such changes could lead to less “productivity theater,” or activities workers engage in primarily to look busy or be visible to managers and colleagues. Around 43% of workers say they spend more than 10 hours a week trying to look productive rather than on valuable tasks, according to a February survey of 1,000 full-time workers by the workplace analytics company Visier Inc.
The firm found that the most common performative tasks include responding to emails from colleagues as quickly as possible even when a prompt answer isn’t required; attending meetings where one’s presence is superfluous; and completing unnecessary extra research for projects.
One extra dumpster
At Waste Management Inc. , thousands of truck drivers empty 22-foot-long rectangular dumpsters every day in cities across the country. Those employees begin their shifts with an assigned route that tells them when to pick up containers at a customer site and which roads to navigate to get there.
The process is complex.
Roughly 70 different factors go into determining a route—from the height of bridges on a road to local traffic conditions, a driver’s expertise and preferred customer pickup times, said Waste Management CEO Jim Fish. Traditionally, route analysts and dispatchers have built the routes, but drivers sometimes follow their intuition, ignoring a computer’s instructions.
Waste Management leaders found that building better routes—and persuading drivers to consistently stick to them—could unlock a significant productivity goal: enabling drivers to pick up one additional dumpster per shift.
The company spent months building a “route-optimization tool” that it says saves up to a half-hour a day, meaning its drivers could empty six containers in a 10-hour period, instead of five. The effort resembles the centuries-old exercise known as the “traveling salesman problem” that aims to find the shortest route among destinations.
Drivers will be free to stray from the optimized routes, if necessary for safety reasons or other concerns, but will also likely be given a monetary incentive if they generally follow the optimized routes and pick up more trash, Mr. Fish said.
“If the company just comes back to Jim and says, ‘Hey, congratulations, you get to do more work in the same amount of time and get paid the same amount of money,’ yeah, I’m not super excited about that,” Mr. Fish said. “So what we’re talking about doing is sharing some of that productivity pickup in the form of wages back to the driver.”
Early results show the company is driving fewer miles to reach customers, and reducing service interruptions such as missed pick-up times, said Aimee Pelletier, an area dispatch manager who works with drivers in a region that includes Illinois, Indiana and Iowa. Dispatchers—who once filled computer monitors with sticky notes, reminding them about route conditions, or built Word documents with ideal routings—can now use the tool to more easily pass on guidance to colleagues.
Mr. Fish said some of Waste Management’s automation efforts, such as in its call centers, will allow the roughly 50,000-employee company to reduce its workforce by 1,000 positions. But he said those reductions in its call centers would come through attrition.
300 million clicks
AT&T enlisted six staffers from its technology group to spearhead Project Raindrops. Starting in 2021, the team crowdsourced ideas, asking employees across units to submit suggestions for re-engineering annoying, time-consuming or seemingly pointless tasks. So far, the team has sorted through 230 suggestions and taken on most of them.
Along with scrapping the retirement-party rundowns, AT&T has automated employee requests for access to some physical office spaces (savings: 23,333 hours), removed one of the two clicks necessary to connect to AT&T’s corporate computer network (savings: 300 million clicks a year) and simplified or eliminated the dozens of emails that go out every month to its fleet of drivers (savings: 41,310 hours).
AT&T’s annual savings of nearly 3 million hours from process improvements comes out to an average of around 18.75 hours a year returned to each of its 160,000 employees—or the equivalent of a little more than two workdays, but spread over a full year in minutes and seconds.
“That’s hours we’ve given back to the employee base to be focused on the business,” Ms. Veazey said. The company calculates the monetary value of the time savings as $186 million.
Emilio Budhwani, a manager at an AT&T call center in Richardson, Tex., says submitting expense reports for his quarterly business trips used to involve two days of gathering and scanning receipts in between emails and calls or after work hours. Now, the process takes about an hour total.
Even better, he said, customer-service representatives in the wholesale ordering division at the call center spend far less time logging in. “Out of the thousands of orders we get, we want to make sure we get back to customers within 24 hours. Sometimes we weren’t able to meet that goal,” he said. With a login step eliminated and some other changes, the team’s on-time performance has improved from 90% a year ago to 97% now.
Of course, AT&T’s calculations on time and dollar savings rely on a big assumption: that employees will fill the saved time with actual work, and not spend it ordering pet food online or gossiping with colleagues.
Often, there isn’t a clear link between microscopic improvements and the bottom line, said Laura Boudreau, a management professor at Columbia Business School. “These small changes can aggregate up into meaningful magnitudes, but they may be really difficult to quantify and measure,” she said.
Still, Ms. Boudreau said, research on remote work suggests that when time is saved on work-related activities such as commuting, at least a portion of that leftover time goes back to the company in the form of more work.
AT&T says it has seen growth in its customer base and profits in recent quarters. Ms. Veazey said it is difficult to quantify, but she believes the reduction in mundane tasks is part of the improved results.
The PowerPoint problem
In its drive to operate more efficiently, asset manager T. Rowe Price took aim at a staple of corporate work: the PowerPoint presentation.
For years, salespeople spent hours building customized presentations to explain the company’s products to clients. An internal database used to help create such presentations ballooned to more than 8,000 slides.
The company realized the database was too large to sift through, so employees often repeated work in building slides that already existed elsewhere in the organization, said Kimberly Johnson, T. Rowe’s chief operating officer. Time spent customizing each presentation meant employees couldn’t do other client-focused work.
“That’s a real limitation on growing the business,” she said.
A committee of roughly two dozen people at T. Rowe spent about 18 months trying to fix the PowerPoint problem. It winnowed the number of slides down to roughly 3,000, and built a modular tool that allows employees to more easily create customized presentations, graphics and data in just a few clicks. The team wrapped up its work in the fall of 2022.
“We don’t have to pull PowerPoint slides out of the PowerPoint universe anymore,” she said. “We freed up hundreds and hundreds of hours of people’s time.”
Write to Lauren Weber at Lauren.Weber@wsj.com and Chip Cutter at chip.cutter@wsj.com
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Appeared in the April 29, 2023, print edition as 'The Boss Wants to Make You More Efficient'.
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