The evolution of productivity: from Factories to Knowledge workers

Productivity has always reflected the nature of work, shaped by what the economy values, how organizations are structured, and what people are asked to contribute. As those realities shift, so does our definition of what it means to be productive.

Now, as work changes again, we find ourselves in the middle of a new transition. But to first understand where productivity is heading and how to effectively manage it, we need to understand the views of people from the previous eras.

The Execution era: Output at all costs

The Execution Era began during the Industrial Age, when being productive meant one thing: getting more done, faster. In factories and on assembly lines, work was all about speed and consistency. Jobs were broken down into simple tasks. Movements were standardized. Everything was designed to keep things under control and running smoothly.

Economist Adam Smith explained how this worked with a famous example from a pin factory. He noticed that if one person tried to make a pin from start to finish, they could only make a few each day. But if the work was split into steps – one person pulling the wire, another cutting it, another shaping the head – they could make thousands of pins together in the same amount of time. Specializing in one small task made the whole process much faster.

Later, Frederick Winslow Taylor took this even further with his method called Scientific Management. He studied how people worked, timed their movements, and created step-by-step systems to get rid of anything that slowed things down.

This approach proved highly effective for physical, repetitive types of work, allowing companies to reduce costs, improve consistency, and scale their operations more easily. However, it came with some trade-offs. Workers had little say over how tasks were done or decisions were made; they were forced to simply follow instructions. In this era, productivity was measured by how much you could do in the shortest amount of time, with precision and efficiency, but often at the expense of individual judgment, creativity, and a deeper sense of purpose.

The Expertise era: Knowledge, analysis, optimization

By the mid-20th century, the landscape of business had shifted dramatically. The world was no longer dominated by factory floors and manual labor alone. Instead, the rise of large corporations, global markets, and expanding service economies brought a new kind of challenge. The age of the line worker gave way to the age of the knowledge worker.

As organizations grew in size and scope, managing work became just as important as doing it. In this period, productivity was redefined around judgment, planning, and analysis. Companies needed managers who could design workflows, align teams, allocate resources, and make decisions based on data.

This gave rise to what we now call the Expertise Era.

It was in this era that management became a formal discipline. Business schools flourished. The MBA became a standard credential. Leaders were trained not just to supervise but to think strategically. Methodologies like Management by Objectives (MBO), Six Sigma, and Total Quality Management emerged to bring structure and discipline to organizational decision-making.

This was also the era that gave us Peter Drucker, the thinker who redefined productivity for the knowledge economy. Drucker shifted the conversation from efficiency to effectiveness.

Under Drucker’s influence, productivity became a matter of direction. Were people’s efforts aligned with business goals? Was the organization designed to support focus, learning, and results? His famous quote: “Efficiency is doing the thing right. Effectiveness is doing the right thing”.

As this era brought depth and structure to management, there are a few blind spots where these models fall short.

There’s an assumption that we know what the right things are. Today’s market is so fast-moving that the “right thing” today is no longer right tomorrow. Philosophies like Drucker’s are thoughtful and deliberate, but they don’t account for the kind of iterative, feedback-driven work that defines Agile teams today.

And perhaps most importantly, those approaches focus on the what and how of productivity, but not the why. The Expertise era encourages us to work smarter, not harder – but it doesn’t ask if the work is meaningful. In a time when employees value purpose as much as performance, that gap matters.

Those gaps lead us to where we stand today.