This morning I attended an event organised by Clarion Law Firm in Leeds about the Economic Outlook. A range of graphs showed an encouraging upwards trend both nationally and locally, in the Leeds area.
One theme which really stood out was that weak productivity growth in the UK is becoming a growing concern amongst economists. The amount of work done by each worker is on a downwards trend and is not keeping pace with the overall growth in the economy. Organisations are currently coping with extra demand by taking on additional workers. This has been helped by the large number of people seeking work post recession. The fear is that without increased productivity the only way that organisations will be able to respond to further predicted increases in demand is by increasing prices, causing inflationary pressure.
Reading the Bank of England paper “the Productivity Puzzle” about this trend and discussing it with my colleagues one of the main insights was about structural reasons for the lower levels and solutions which included revisiting the way we measure productivity.
Another line of thought is about increasing investment levels in plant and research and development which is outlined in John Mills interesting article Investment in Plant
One area that seemed to be missing from the analysis was how organisations can practically respond to these lower than expected levels of productivity. We are facilitators not economist so we offer four pragmatic ideas based on projects we have been involved in when we have seen a clear improvement on productivity.
ONE: Ask your employees!
One of the things that happened during the recent recession is that we were all so busy surviving that we just kept going round our hamster wheels and never took the time to get off and check our progress. Taking time to review processes, procedures and ways of working has been consistently shown to make an impact on how effectively we work. This is often labelled “systems thinking” and it implies looking systemically at how the whole organisation works. An important (and sometimes neglected) part of the philosophy is the belief that the people undertaking the work are in the best position to improve the system.
TWO: Identify Non Value Activities
When we get busy we often fail to pay sufficient attention to what value we are adding to the business by each action. Focusing on activities which do not add much to the business can quickly identify opportunities for more effective use of resources. This can be something that employees can very quickly identify. We were facilitating one team who realised that the requirement for remote tutors to fax a class register was a time waster when they all had smart phones and could simply photograph and email the register over to the central team. Many small changes add up to big impact over time, people working in the appropriate and encouraging culture can make a huge and beneficial improvement to the overall effectiveness and productivity.
THREE: Engage People
It struck us as curious how any mention of engagement is missing from the Bank of England study which seems to be much focused on structural economic issues. The research by Gallup on employee engagement has consistently identified a link between employee engagement and productivity levels. From our work in organisations we find that higher levels of engagement happen when employees are asked for their opinions and are consulted on decisions. Running focus groups and large scale events such as Café Exchanges can really help to provide a forum for all levels of employees to sit together, to share ideas and opinions and as a consequence to feel valued by the business.
FOUR: Discuss Productivity as a Measure
Productivity is a national indicator of success but this does not mean that every organisation has to focus on this as a meaningful measure. There is a whole argument that explores whether productivity actually matters. This could be a very useful discussion for the Boards of Organisations to have or for Regional Leaders to discuss using a Round Table format
Taking this Forward
It seems that productivity is an important component of wealth creation. Investing in the people that work in the business through engaging their innovation and creative energies may be one of the most immediate and effective ways that managers can make an impact on productivity.
Is it time to talk about this as an issue? To step away from the hamster wheel in your business and work out what you want to do about productivity levels? Why not start with a senior level discussion about the impact of productivity on your potential for growth and then from there agree a plan to identify and respond to barriers which are making employees less productive than they feel they could be. We know from British Cycling how marginal gains can make an impact on overall performance, small steps to better productivity will start to show on the bottom line.
Give us a call or drop us an email to start the conversation about how the Productivity Project can begin!