The Project Productivity Dividend: How Smart Approvals Drive Better Outcomes
Rusha Das’s recent analysis for the Productivity Commission reveals a sobering truth about Australia’s productivity choices: since 1980, we could have reduced working hours by 15 hours per week without lowering consumption, yet chose to bank 77% of productivity gains as higher income rather than leisure. This “productivity dividend” concept extends beyond individual choices to organisational behaviour—companies too face decisions about how to allocate their operational efficiency gains. When organisations achieve productivity improvements, they can either reinvest those gains into growth initiatives or watch them drain away through inefficient internal processes that inflate project costs, extend delivery timelines, and waste scarce management attention. Project approval systems represent a critical juncture where this dividend is either captured as competitive advantage or lost to bureaucratic overhead that adds cost without adding value.
PwC’s Bureaucracy Measurement Index research demonstrates exactly how approval complexity destroys organisational productivity. Their studies reveal that cumbersome approval processes—where expenditures of $500,000 require multiple sign-offs climbing high into organisational hierarchies—create systematic bottlenecks that delay projects and distract senior leaders from strategic value creation. This bureaucratic burden doesn’t just slow individual projects; it compounds across portfolios, creating what PMI research identifies as the “spiral effect” where poor governance frameworks trigger cascading delays and gaps in project execution. The irony is stark: organisations invest heavily in productivity improvements only to watch those gains evaporate in approval processes that lack clear accountability, appropriate delegation, and responsive decision-making structures.
The evidence suggests that streamlined, well-designed approval processes don’t just reduce delays—they actively enhance project productivity by enabling faster decision cycles, clearer accountability, and better resource allocation. Rather than viewing governance as a necessary evil that slows progress, smart organisations recognise that appropriate approval frameworks actually multiply their productivity dividend by ensuring projects launch faster, adapt more readily to changing conditions, and deliver intended outcomes more reliably. This isn’t about reducing oversight; it’s about designing oversight that amplifies rather than diminishes organisational capability.
Three Actions for Project Sponsors
1. Implement Risk-Graduated Approval Authority: Establish clear delegation thresholds that push routine decisions down to appropriate levels while reserving senior approval for genuinely strategic or high-risk decisions. Map your current approval requirements against actual project risk and business impact to identify where bureaucratic layers add cost without commensurate value.
2. Define Information Requirements by Decision Level: Prevent teams from over-researching proposals by clearly specifying what level of detail is actually required at each approval stage. Many project teams waste weeks developing comprehensive business cases when senior decision-makers only need high-level strategic rationale and key risk factors. Establish explicit information standards that match the decision being made—concept approval requires different depth than final investment commitment—saving both preparation time and executive review burden.
3. Measure and Monitor Approval Velocity: Track approval cycle times, escalation patterns, and decision quality as key performance indicators alongside traditional project metrics. Regular assessment of your approval processes’ efficiency will help identify bottlenecks and optimise decision-making pathways to maximise both project outcomes and organisational productivity gains.
