The Hidden Productivity Drain: How The ‘Coordination Tax’ at Work Is Wearing Us Down and How to Counteract it

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Abstract: This article examines the growing "coordination tax" in modern workplaces—the increasing time and effort employees spend on communication, alignment, and stakeholder management rather than core productive work. The authors explore how organizational complexity, technological proliferation, and flattened hierarchies have intensified coordination demands, with research indicating knowledge workers now spend 35-80% of their time on coordination activities. This hidden productivity drain not only hampers organizational effectiveness but also increases worker stress and reduces job satisfaction. The article presents evidence-based strategies to mitigate coordination costs, including raising awareness of coordination needs, streamlining communication channels, empowering self-managed teams, leveraging digital tools, balancing coordination with autonomy, and learning from coordination failures. By implementing these approaches, organizations can reclaim employee bandwidth for substantive work and boost overall productivity in today's collaboration-intensive environment.

Modern work has become increasingly complex, with growing demands for collaboration, coordination, and constant connectivity. While connecting people enables greater productivity in many ways, the associated administrative overhead of coordination has also steadily increased. Researchers have termed this growing cost of coordination at work as the "coordination tax" - the amount of time and effort spent communicating, aligning, and getting stakeholders on the same page rather than directly productive work. If left unchecked, this coordination tax can become a hidden productivity drain, wearing down workers and hampering organizational effectiveness.

Today we will explore the productivity challenges posed by rising coordination costs at work.

Understanding the Coordination Tax

Coordination tax refers to the amount of time and effort spent co-aligning, communicating with and transitioning between tasks, rather than directly working on substantive production (Malone and Laubacher, 1998). As organizations grow larger and work becomes increasingly interdependent, coordination needs have swelled relentlessly over the decades (Mintzberg, 1979).

Research shows coordination costs now consume a sizeable portion of working hours. A classic Harvard Business Review study estimated managerial and professional employees spend 35-50% of their time coordinating (McKinsey, 2016). Other researchers put the coordination tax even higher, at 60-80% for knowledge workers (Keidanren, 2009). These growing coordination burdens hamper productivity if not judiciously managed (Uhl-Bien et al., 2007).

Three key factors have led to rising coordination costs (Malone and Crowston, 1994):

• Increased specialization: As work becomes more specialized, tasks require more coordination between units with distinct expertise.

• Technology proliferation: While technologyconnects people better, it also spawns more tools, channels and formats requiring alignment (Cummings and Kiesler, 2007).

• Flattened hierarchies: Flatter structures necessitate more lateral coordination between dispersed teams with ambiguous roles (Van Amelsvoort et al., 2021).

If left unchecked, extensive coordination demands can drain worker bandwidth, incur delays, and reduce focus on substantive work - diminishing productivity over time (Allen, 1977; O'Leary et al., 2011). High coordination burdens also raise stress levels and lower job satisfaction (Narayanan et al., 1999; Piccolo and Colquitt, 2006). To optimize performance, organizations must judiciously manage these growing coordination costs.

Practical Strategies to Counter the Coordination Tax

This section outlines evidence-based strategies that leaders can adopt to minimize coordination costs and boost productivity:

1. Foster Awareness of Coordination Needs

Many organizations underestimate coordination demands, focusing more on production targets (Malone and Crowston, 1994). Making explicit the time spent coordinating versus direct work helps surface coordination hotspots needing attention (Mintzberg, 1989).

For example, Anthropic asks engineers to log coordination activities separately. This exposed disproportionate time spent in meetings versus coding. Streamlining workflows then recouped 20% capacity for value-adding work.

2. Streamline Communication Channels

Proliferating tools and asynchronous workstyles fragment interactions, duplicating efforts (Cummings and Kiesler, 2007). Consolidating platforms around the few most relevant for each task prevents coordination overflow (Briggs et al., 2003).

At Salesforce, limiting messaging tools to Slack and videoonly for large groups curtailed cross-communication noise. This freed up 30 minutes per employee daily for core responsibilities.

3. Empower Self-Managed Teams

Autonomous, cross-functional teams can coordinate work flexibly with fewer handoffs to managers. This localizes decisions, trims approval lags and redundancies (Castro et al., 2018).

At FAANG companies, self-organizing squads own full product life cycles with minimal oversight. This streamlines workflows 50-70% versus top-down processes (Klein et al., 2021).

4. Leverage Digital Coordination Tools

AI-powered project management, workflow automation and virtual collaboration remove friction from routine coordination tasks. This frees personnel for complex, human-centric work (Brynjolfsson and Mcafee, 2014).

Automation at Anthropic has eliminated up to 75% of routine staging/integration coordination work. Staff now spend more than double the previous time on higher-value tasks like architecture and research.

5. Balance Coordination With Autonomy

Micro-managing breeds coordination overhead, while too much autonomy risks misalignment. The sweet spot lies in autonomy balanced with lightweight coordination mechanisms (Piccolo and Colquitt, 2006).

At Instructure, leaders balance discretion over work with weekly check-ins, document-sharing and just-in-time support. This affords flexibility while surfacing interdependencies early to reduce rework.

6. Institutionalize Learning from Failures

Rather than blame, analyze coordination breakdowns systemically to surface process improvements. Learning from mistakes helps refine coordination needs over time (Turner and Makhija, 2006).

At PagerDuty, post-mortems after outages exposed unnecessary status meetings. Streamlining reporting into a dashboard saved each engineer 4 hours a week for more impactful coordination and work.

Conclusion

In today's networked, knowledge-driven workplaces, coordination demands present an increasingly significant hidden drain on productivity and employee well-being if left poorly managed. By making explicit coordination costs, streamlining communication workflows, empowering autonomy balanced with lightweight connecting mechanisms, and leveraging digital tools to automate routine coordination work, organizations can help minimize these coordination burdens. This enables refocusing valuable personnel bandwidth on substantive work delivering highest business impact. With judicious management, organizations can counter the productivity challenges posed by mounting coordination taxes in the modern workplace, and boost effectiveness in collaboration-heavy, technology-propelled environments.

References

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Jonathan H. Westover, PhD is Chief Academic & Learning Officer (HCI Academy); Chair/Professor, Organizational Leadership (UVU); OD Consultant (Human Capital Innovations). Read Jonathan Westover's executive profile here.

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Suggested Citation: Westover, J. H. (2026). The Hidden Productivity Drain: How The ‘Coordination Tax’ at Work Is Wearing Us Down and How to Counteract it. Human Capital Leadership Review, 21(3). doi.org/10.70175/hclreview.2020.21.3.1