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Last week I was the UK Innovation Summit whose core focus was Productivity. So, what, I hear you ask does that have to do with squeezing lemons or making cocktails? Lets start with what productivity means?
productivity (ref dictionary)
- the state or quality of being productive.”the long-term productivity of land”
- the effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input.”workers have boosted productivity by 30 per cent”
- synonyms: ◦ efficiency, production, productiveness, work rate, output, yield, capacity, productive capacity “workers have boosted productivity by 30 per cent”
We all like to think we are being productive and efficient, and frankly when we consider the opposite then we think lazy, inertia, lost interest and momentum, unproductive, underperforming. As humans its part of our ‘pleasing’ state, to be good at our work and do well. We like to do a good job. We like to be recognised and appreciated. It gives us satisfaction and a sense of place and self.
Stats this year suggest (straw poll via CBI) that when 95% of businesses were asked how productive they are – both as businesses and individuals – they believed they were at least average or more so than those around them.
Unfortunately, when we offset this with what we are told by the likes of Government, and other ONS statistics and surveys carried out over the past 2 years, “Output per hour worked in the UK was 15.1% below the average for the rest of the G7 advanced economies in 2016; this compares with 15.5% in 2015. Output per worker in the UK was 15.4% below the average for the rest of the G7 in 2016.”
So we are not only way behind G7 and parts of Europe, but we all thought we were actually fine. Maybe that is part of the problem – our benchmarking is against ourselves, and on top of that how do we even become aware that we are in fact so much less productive than our G7/ EU counterparts unless we hear or read about such figures? And why is it even important?
Government proposals outline greater focus on building communities of investment, tools and systems that will aid in creating a 10% productivity improvement in poor performing businesses across the UK, which is estimated to be worth more than £130BN per annum in GVA to the UK economy. This needs to be considered in a broader context also, when by 2030, its predicted over 400M jobs will be displaced through technology advancements and facing shifts in job content and skills.
There are culture, skills and productivity conferences, meetings, seminars everywhere at the moment and its happening for a reason. We simply can’t continue that way we have been. That said, no one seems to have a clear answer. At least thats what these stats seem to be suggesting, and all the meetings and debates and discussion seems to imply……….and thats all without even mentioning the challenges that the ‘B’ word also implies for any trade and agreements with EU for us as businesses of any size and scale.
So, the likes of Innovate UK are significantly upping their investments from public funding with a goal for every £1 spent there will be a £7.30 return! Catapults around the UK are focusing in collaboration with LEPs, Growth hubs, the CBI and Innovate UK (to name a few)- all with the shared goal of assisting in upping our productivity and driving us towards that 130BN goal.
Carolyn Fairbairn of CBI talked a great deal of the magpie versus ostrich mentalities – those that go and grab what they can, learn from best practises and build on other peoples ideas, work and insight, as opposed to the ostriches who do do this and don’t change anything, nor look to innovate or advance.
She referred to the need to reshape business models to increase competitive edge, engage with Research and Development (On average between 2.8% to 3% is spent by businesses in EU on R&D against only 1% by UK companies.), increase focus on the intangible investment areas such as process improvements, design and brand, training and software.
As Jonathan Haskel of Imperial College Business School agreed; any move to intangible investments requires changes to business and policy and a real need for focus on leadership, fit-for-purpose finance, ‘whats measured gets managed’ approaches and policy changes for infrastructures and city planning. We should be looking therefore to our counterparts and see what they are doing well. We should be looking to each other to share and learn. The balance between Capital, Tech and People has not changed, but we need to fundamentally revise how we invest and where.
Productivity should not be about gain, it should be about investment, training and improving performance. It centres on confidence, self belief and changes in how you work with a focus on goals, your users and the notion of quality of work.
UK business is woefully behind when it comes to investing in themselves and in research that will carry them forward (despite available tax credits – of approximately 5.5 Million SME’s only 20% have taken up tax credits for Research and Development). On top of that, I believe that many businesses simply have no idea a) how to deal with ‘their productivity issue’ let alone being aware they even have one and b) what that really even means.
Squeezing out the Lemon juice!
Our employee engagement scores are stuck in the low 50s, well below the majority of EU (Belgium, Netherlands and Germany all cited as significantly higher) Does this not point then fundamentally back to Company culture, job satisfaction, job investments in skills people and diversity? With employee engagement scores at all time lows, and many feeling that when the topic of productivity is raised in their organisations its with an eye to ’squeezing more from the lemon’ with no extra gain to them! When the general gist appears as one of asking more for less across the board in all areas of their lives and doesn’t appeal or build the required buzz or feel good factor:
- pay is flatlined, cost of living increasing with interest rates,
- increased mistrust and cynicism in politicians and leadership – When assuming peoples best intentions, let them experiment, learn and grow, find their value within a company or organisation – build a culture of reward and empathy.
Net result = Employees inherently believe they will be working harder for longer for no personal benefit
In reality their actual desire may well be ‘more autonomy, chance to work smart, stop spinning the wheel as perceived productivity’ or put more simply “mindless activity does not translate as aligned productivity” and by implication – > being collaborative!
Creating the Cocktail!
Productivity language currently is not about reward and engagement or recognition of a job done well, but of a transaction. It requires a mindset shift from cost to capital for human value scores. It requires a shift to lifelong learning and investment. It requires looking to a mentality and focus on ‘the prize of sharing’ and so enabling best practise to be shared and pollinated cross sectors and industries. It requires overall investment in your people and cultures as well as your business models, technology and product/ services innovation.
Listening to your staff and workforce and customers and truly understanding their needs and what makes them tick – internal or external to your organisation – people are at the crux of all ‘productivity’ and so shouldn’t they be the first place to start when looking at how to improve things?
Making small 1% improvements across multiple areas are more likely to yield more positive results – and this is where the cocktail comes in. The best cocktails are a combination of lots of different ingredients, that when all mixed in specific measure, yield the most delightful results. The lemon juice alone is bitter but when added with other ingredients creates something spectacular. So we must get away from the idea of squeezing the lemons and instead complimenting them with the other ingredients to transform them. Keeping it simple, a few key ingredients all mixed well and in perfect measure!
Mines an up and up Old fashioned with a twist of lemon on the side please!
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