Working harder at the wrong thing

When competitiveness is waning, compelling people to work harder can come across as moving backwards. Germany has long been viewed as an exemplar of industrial discipline with world-class engineering, productive factories, and a strong economy centered on the production of high-quality complex goods. So, it's somewhat surprising that current measures proposed to address the country's automotive sector issues include increasing the workweek from 35 to 40 hours, without any additional compensation.

While labor costs are significant, especially when faced with competitors that can manufacture goods at lower costs, Volkswagen's struggles are not primarily due to employees leaving work early on Fridays. The company has surplus production capacity, declining demand, and fierce competition, particularly from China, which has transformed the automotive market in both economics and customer expectations.

Recent figures show that German passenger-car production in the first eight months of the current year remains 16% lower than its 2019 level. This context makes the ongoing debate about working harder feel somewhat repetitive. When a well-established model starts to falter, the initial response is often to extract more from it: more hours, higher output, more sales calls, or implementing additional efficiency programs.

There's an assumption that the system is fundamentally sound; it merely needs to function more intensively. However, given Volkswagen's current predicament, this perspective raises a more uncomfortable question: perhaps forcing the existing model to work harder is no longer sufficient. The company's recently approved Future Plan 2030 goes beyond merely reducing labor costs.

It anticipates around 50,000 job cuts across the group, accounts for over 500,000 excess vehicles in European capacity, and proposes halving its model lineup. The essence of the issue is not about productivity or optimization; it's about relevance. Productivity focuses on improving, speeding up, or reducing the cost of certain processes.

Reinvention, on the other hand, asks whether that particular process is still necessary at all. Both aspects are crucial, yet applying productivity measures to a problem that requires reinvention can be perilous. The former gives the impression of substantive action, while the latter is necessary for long-term success. This dilemma extends beyond manufacturing industries.

When businesses face a decline in customers, they may raise sales targets. When margins narrow, they might cut costs further down the line. When an employee feels they're becoming obsolete, they might work longer hours, pursue additional qualifications, or apply for more jobs. While such actions can be sensible in specific circumstances, there comes a time when more effort directed at the same issue only delays the more challenging question: does what I do remain valuable enough?

There's an irony in this situation. Reinvention is typically portrayed as a move towards something new, while the typical reaction to pressure is often to retreat to what is known. We focus on optimizing the past because it's measurable. Yet, asking for extra hours is concrete, while reevaluating products, capabilities, markets, and the underlying assumptions of an industrial model is far more uncomfortable.

This doesn't mean Germany should disregard productivity or that a 35-hour workweek is sacred. A country competing on a global stage will undoubtedly examine costs, work practices, and regulations. However, efficiency cannot replace relevance, and pushing harder cannot revive an offer that is increasingly preferred by customers elsewhere.

This applies to companies, economies, and careers alike. Efficiency makes the current model function better. Reinvention questions whether you still need that model. The danger isn't working hard. It's working hard for the wrong thing. Because you can work harder at the wrong thing for a considerable amount of time.