Governments raise the stakes

Governments around the world are taking stakes in banks and private sector organisations ... on a temporary basis, of course ... just while the 'credit crunch' lasts.

I think it was Milton Friedman who said that "There is nothing so permanent as a temporary government programme." We have no choice but to 'watch this space' and see how right he is!

Here ... and there

No sooner do I announce the fact that I am in Toronto ... than it is time to signal my departure back to the UK. We have, though, had a very useful - and productive - meeting of the Board of WCPS (World Confederation of Productivity Science) ... setting out our future strategies.

This was facilitated by a colleague and fellow Board member - Tom Tuttle - using a methodology used by him when dealing (in his real life) with clients. This methodology had elements I recognised and elements I did not- and proved to be highly effective.... in fact so effective I might 'steal' it for future use.

And so we progress .... learning (if we are sensible) from others .. and adopting (and often adapting) tools and techniques we see that could work for us. I would use the methodology in a different way to Tom - not because I would do it 'better' ... just differently ... because Tom and I are different people with different approaches, strengths and weaknesses. Recognising ourselves is the first step on the path to success,

Toronto Turnround

Besides being Director of the National Productivity Centre here in the UK, I am also President of the World Confederation of Productivity Science (WCPS). The WCPS is this week taking some of its own medicine. There is a Board meeting in Toronto to review our forward strategy ... and make the organisation more productive ... in terms of spreading the productivity message both to, and beyond, our own direct stakeholders.

In this 'credit crunch' world, there is no more important task for most organisations than to raise their productivity ... there is a danger that in doing this, many will concentrate on economic productivity and forget about social and environmental productivities. However, this will simply be a reversion to the old practice of the short-term fix ... if we are serious about multiple productivities (and we in the WCPS certainly are), we must maintain our focus now and into the uncertain future.

We all measure productivity - but not always the same way

An interesting 'productivity measure' caught my eye recently ....

Johannesburg has eased out Cape Town as the most productive municipality, according to Municipal IQ, a specialised South African local government data and intelligence service.

Johannesburg is ranked as the most productive place to work, live and invest in South Africa. It is followed by Tshwane, Cape Town and eThekwini, as reported by Local Government Research Centre director Clive Keegan.

Municipal IQ - headed by Kevin Allan, a former adviser to the provincial and local government minister, and economist Karen Heese - has ranked all 283 South African municipalities according to a productivity index.

It calculates productivity by measuring the extent of poverty in a municipality and its response through the provision of free basic services; access to a minimum level of municipal services, specifically water, sanitation, refuse removal and electricity; economic activity and infrastructure; municipal financial governance; and occupancy rates in the municipal administration.

Interesting Foods

I am indebted to Prof Albert Prins (who I have never met ... but that's a long story) for the observation that there only 4 interesting foods ... wine, beer, bread, cheese ... all of which demand real expertise, real experience and real committment if they are going to be made well. Any nominations for a 5th?

Innovation in Rotterdam

I am in Rotterdam at the World Food Technology & Innovation Forum. Interesting talks and discussions (though some are a bit too 'foody' to me as more of a generalist). However I know that one often learns from other spheres than your own, so I AM paying attention ... and slowly the lessons are starting to emerge. Key message so far? Open innovation (including others - suppliers, customers, external experts ... in your innovation process) might be scary, might be more expensive - but it gets away from the "If you always think how you always thought, you'll always get what you always got" syndrome.

Remember this one thing

I am on my way back to the UK after a successful visit to China. As often happens, one particular thing stuck in my mind... someone said that China uses one tenth of the world's farmland to feed one fifth of the world's population. Pretty impressive agricultural productivity! ... or am I missing something?

Quality and or but ...

I am in Beijing having flown here on Qatar Airways via Doha. The airline claims to be a '5 star airline' and service was undeniably excellent. How was productivity? Almost impossible to tell but in 'conventional' terms, I suspect it was quite low. Quality and productivity can go hand in hand but when organisations are seeking to appeal to a 'luxury' market, the level of service needs to be exceptionally high. There is, of course, a different view. I have argued in the past that the 'top line' of the productivity ratio (where the value is added) should be measured in customer perceived benefit - and assuming customers are willing to pay for the level of service offered, then productivity can still be high.

I suspect from the pricing of Qatar flights, that there is an exercise in national promotion going on and that the costs of delivering the quality of service offered are not necessarily recovered from the pricing strategy. If this is the case, quality is high but productivity is low,

... but I enjoyed the flight! And I suspect that the 'strategy' is working in terms of making flyers recognise the excellence of Qatar airlines and think differently about the state.

Blogging makes you more productive

Surely not, I hear you say. All that time taken up in writing the blog must reduce personal productivity!

Most bloggers work in one or both of two ways .. they blog things which 'happen' (easy) or they reflect on issues, concerns, activities, etc and think about lessons that emerge (more difficult). After a time, however, these 'lessons' present themselves more quickly - as your mind becomes attuned to the type of things you are looking for. And this process of consideration and reflection spills over to other activities. Soon, you find yourself finding 'insights' from unexpected sources.

'Thinking' becomes second nature - instead of a chore ... and thought processes improve.

Well, that's my experience ... if you read this stuff on a regular basis, you might have a view as to whether I'm right.

Ripples

At a meeting yesterday, someone asked about the IPR rights to a project we are working on. I replied that the partner company owned the stone being thrown into the water .... but we own the ripples! Such partnerships always have unexpected benefits.

World Productivity Congress for Turkey

Kerim Unal, the Director of the Turkish National Productivity Centre, Peter Rehnstrom, President of the European Association of National Productivity Centres and John Heap, President of the World Confederation of Productivity Science (and writer of this blog!) have signed an agreement to hold the next World Productivity Congress together with the European Productivity Conference in Turkey in 2010. (The 2009 European Productivity conference will be geld in Grimsby in the UK in October 2009.)

Details will follow and ProdBlog will keep you updated.

Porsche accelerates

Workers at Porsche AG are to receive an increased bonus for the year ended July 31st because of productivity gains. Workers will receive a 6,000 Euro payment.

Porsche said ...The management and works council together believe that the workforce's efforts to improve productivity, flexibility and quality deserve to be rewarded/

Bridging more than continents

I am just returning from Turkey (and blogging this at Munich airport). As you know, Turkey is the bridge between Europe and Asia. This gives it a unique geographical position .... but it gives it more. Turkey has been 'courted' by many European and Asian companies wanting to exploit the 'bridge'. Over the last decade Turkey has used the presence of these companies to take Japanese management and productivity philosophy and re-export it - to Europe - in slightly different forms.

At first it seems odd to see Turkish 'lean practitioners' in Slovakia helping German white goods manufacturers to improve their productivity - but that is what is happening.

The smart always use what is given them to gain an edge ... Turkey is doing this now ... to improve its own industry but also to participate in the development of the 'new Europe'.

The right energy strategy?

The UK government (possibly rightly) is investing in alternative forms of energy production - we have all seen the wind(turbine)farms springing up. However, the real savings in emissions and efficiency are to be made by refining the current big energy producers - oil, gas (and to a much lesser but growing extent) coal- to make them more productive.

If a tenth of the money going into wind turbines was spent on energy-efficiency R&D, we would all save money and the planet would be a better place.

Ethical dilemmas

A number of companies are working on genetic modifications to seeds/plants to improve the productivity of agriculture. Good - the world need to grow more food. Bad - not all the risks are known.

This is not a productivity issue ... it is an ethical issue for society. Should we do it. Not my call. Though I am a passionate advocate of new technology applied appropriately, I have doubts about the wisdom of genetic modification. But I don't want to make the ruling ... I just want an informed debate and then a consensus to emerge. Collectively we can take the risk ... commercially we should not.

Beware of naive benchmarking

India produces only about half as much rice per hectare as China, the world's largest producer, and just about a third less than Vietnam. On the face of it - in benchmarking terms - this look like very poor performance.

However, delve a little further and you realise ... India is a very heterogeneous country, from irrigated to rain-fed areas and rice is also grown in very marginal areas. So the average productivity comes down If you look only at the irrigated areas, the yields are very high compared to any part of the world.

In China, they seem to use significantly more fertilizer, so the high yields are associated with longer-term environmental damage.

Now who has the best (long-term) productivity?

Leaving on a jetplane

I am blogging this from Johannesburg airport as I leave to face the real world once more. I have enjoyed my time in South Africa and especially the people who seem to have a confidence and a joy about them - in spite of the recent political turmoil.

Service is always with a smile ... but not always of the highest standards. This seems to be because systems let the people down - they clearly want to offer good service.

So productivity in SA still has some way to go .. but the evidence is that SA is on the journey and traveling in the right direction. Perhaps the satnav needs monitoring to make sure the vehicle stays on course.

A hunger to stop hunger

I am still in Africa but now on vacation. What has impressed me by the productivity people I have met is that they see productivity as a means to several ends ... competitiveness, growth and prosperity certainly ... but even these factors are a means to the end of ending hunger, poverty and division.

At the World Productivity Congress I 'preached' the need to address economic, social and environmental productivities ... Africa seems to have 'bitten the bullet' ... what they need is help to build the infrastructure on which they can deliver higher productivity. The will is there and they are making real progress but they know there is a long way to go.

Another one bites the dust

Today, the World Productivity Congress in South Africa closes. Key lessons? Well, from a world event you might not be surprised to find that a key lesson is that many productivity issues are the same the world over, but many are set in a local context. Beware global consultancy organisations that offer pre-packaged solutions; always filter your own knowledge of technical issues through your own knowledge of the location where the issues are being addressed. If you don't have that local context knowledge, find it! Then you might be able to turn your technical knowledge into practical wisdom!

We have the time!

In a conversation with an African delegate at the World Productivity Congress in South Africa yesterday, I (perhaps slightly rudely) suggested that some of the organisation was a little 'sloppy' ... with things not happening to schedule. His response was ... "God gave you Westerners the clock but he gave us Africans the time. Things happen when it is right that they should happen."

Start of ....

In about 1 hours time, the 15th World Productivity Congress will begin. This is the start of .... well, what exactly. Of course there is a programme of experts offering new insights into productivity theory and practice... but if the event is to be truly effective and significant, there should be a legacy of thought and action that transcends mere dissemination and creates added value. After all this is why we gather together, rather than 'meeting' via email ... I will let you know my thoughts on the event later. For now, I know this is the start of something good ... but it could be the start of something great!

Continuous Improvement?

The UK government is - once again - looking at the future of vocational qualifications. It has taken a decade for industry to 'warm to' the concept of national vocational qualifications (NVQs) but the market (the number of students taking NVQs and being funded by their employers to do so)has been rising steadily.

Just as the market gets used to - and seems to appreciate - the current system, the government steps in with a new initiative.

Now government clearly has a role in reviewing and developing the training infrastructure - and this is a key part of the productivity infrastructure - but sometimes 'continuous improvement' looks more like 'continuous meddling'.

Beat the Crisis

We are all aware of the current global economic slowdown, resulting to a large part from the sub-prime crisis in the US. This is resulting in rising inflation in many countries.

India Inc is taking a fresh look at their HR/pay policies, aiming to increase productivity and redeploy their manpower. Though, many companies have factored in the economic turmoil in their budgets for 2009, the average salary projections for the coming year are lower by only a percentage point at 13.9%. Despite the increased pressure, the year 2008 saw a strong salary increase of 14.8% according to a study by HR consultancy firm, Hewitt Associates.

According to the survey across 150 companies, only 20% are resorting to a slowdown in hiring or a complete freeze. The majority - 57% - are looking to balance the effect of inflation and lower HR budgets by increasing productivity.

Many companies (30%) are also introducing performance linked pay to ensure increased pay is backed by improved performance.

Thanks for the feedback

Regular readers will have seen the comments from Andrew on a recent posting. Thanks, Andrew for a helpful response ... reacting to my own admitted ignorance! All such comments welcome.

Andrew´s was particularly useful ... as it reminds us of why we work better in teams ... we spark off one another and add value to each other´s thoughts ... and it was helpful as it came while I was on vacation ... but, sadly, I am back ón station´ as from tomorrow.... assuming I can get my head back into thinking mode, of course.

Totally unproductive

As from tomorrow, I shall be on vacation. No laptop, no handheld ... well, just a phone. I intend to be completely unproductive ... apart from recharging my personal battery ready for the next few months of mayhem!

(Ever thought that at times organisations need to recharge also ... just stop the new initiatives and consolidate performance and productivity gains into standard operating procedures and practises. Go on, give your organisation a holiday ... you know it makes sense.)

It is not often governments talk about Total Factor Productivity but here is a recent example ...

The Malaysian government urged the Food and Beverage industry to emphasise the enhancement of Total Factor Productivity (TFP).

This is to enable the industry to be more efficient in the light of escalating costs, said the the Deputy Minister of International Trade and Industry (MITI), Datuk Jacob Dungau Sagan.

"Improvements in TFP reflects skills enhancement, better organisation and management systems, technology advancement and improvement in methods of production as well as a shift towards higher value added processes," he said in his opening address to a business forum entitled, "F&B Industry - Crisis Looming".

"The adoption of good manufacturing practices such as TQM, Six Sigma, Kaizen, Quality Environment, Productivity Management, Lean Management, Benchmarking and Supply Chain Management would enable manufacturers to remain competitive," he said.

Statistics Canada recently reported a 30% decline in multi-factor productivity growth (MFPG) in 2006 as compared to the USA. Lower MFPG explains 92% of the Canada–US productivity gap between 2000 and 2006.

Andrew Milivojevich of http://www.tkmg.org was quoted as saying ... “In Canada, the dominant source of productivity growth is investment in equipment and structures. In the US, the dominant source is in MFPG; a measure of technological progress and organizational change. This signals a shift in productivity thinking favouring the US.”

Now, I might be a but stupid but doesn't "investment in equipment" broadly equate to "technological progress"; and doesn't "structures" broadly equate to "organizational change". so isn't what's being said simply "The US is growing faster than Canada".

Now, if we only knew the real reason, we might understand the difference.

How connected are you?

Productivity - at national level - is facilitated by a number of infrastructure elements .. one of which is telecommunications. Nokia-Siemens have just published the results of a 'connectivity scorecard' exercise (created by Prof Leonard Waverman, of London Business School) which compares 25 countries in terms of their degree of connectedness.

The UK comes out fairly well - 5th of the 25 countries with a score of 6.13 against the USA's 6.97... and 1,07 for Nigeria.

See http://www.connectivityscorecard.org/ for more information.

Still a way to go

People often ask whether productivity can always be improved or whether after a number of initiatives, a plateau is reached. The following reminds us that because the environment changes, the situation changes, the technology available changes, etc.... there is always room for improvement.

President Smt. Pratibha Devisingh Patil of India has suggested that it is vital that India keeps agriculture at the centre stage of the nation’s development agenda and constantly enhances crop productivity. She said: ‘We must enhance productivity on a constant basis and bring about a second Green Revolution which, along with agro-biotechnology, can translate into an ever-Green Revolution in India…. the Indian Council of Agricultural Research has already taken the initiative to establish one of the world’s largest and well organized gene bank of crop genetic resources. Agricultural growth would also depend upon technological inputs relating to water management systems, better seeds and farming practices. I am sure the institutes in the ICAR, the universities and the industry will be able to join hands to develop new technologies in these areas. The research system should intensify linkages with the public and private extension systems at all levels, particularly at the district and lower levels where the actual uptake and impact is seen.’

Its not the technology!

Robert Atkinson, the President of the Information Technology and Innovation Foundation, believes Europe can boost its productivity through more widespread use of ICT. To achieve this, ICT will have to be put "at the centre of its economic policies for trade, technology, competition, the labour market and regulation," he says.

Atkinson outlines the areas where Europe is actually ahead of the United States in the application of ICT, including the broadband, banking, smart card and healthcare sectors. Yet he laments the fact that Europe has still not reaped the "same level of benefits" from ICT as the US has.

He gives two reasons for this: European companies generally invest less in ICT than their US counterparts and perhaps most tellingly …"they appear to make less 're-engineering' changes".

So, as you and I already knew … ICT is not the answer … but using ICT as a ‘trojan horse’ to re-engineer business processes might be!

Flying High

I am flying home today after two and a half weeks on a UNIDO looking at the Fisheries sector in Indonesia. Hopefully, the work has ben helpful in identifying the major constraints holding back further export potential ... and identifying opportunities for interventions that should remove or work round these constraints.

Having presented our findings at a final workshop, we are now awaiting specific project ideas in the intervention areas we have identified. We want these ideas to come from the Indonesian government and from Indonesian industry themselves... so there is strong ownership. We will then on subsequent visits work on the feasibility of, and the potential impact of, these ideas before arriving at a final Technical Assistance Programme - hopefully around Jan/Feb 2009 - which should, when implemented, make a real difference.

It has been a rewarding - though tough - experience. Now I need a rest!

The model grows

The Economic Impact Model (see previous posting) is growing - almost with a life of its own. There are continual trade-offs and decisions to be made such as ... is old - but real - data better than a current, informed judgement? (This itself is an informed (hopefully) judgement.

We are not interested in building a model that wins prizes for accuracy or authenticity ... but one that helps us work out the impact of various intervention strategies.

However, we have already found it does more than that ... it helps identify potential interventions ... or at lest the collection of data and the building of the model does. For example, in the Indonesian fisheries sector we are looking at, much attention is focussed on moving into 'value added', further processed and packaged, higher price products. But the model says that a very (very) small quality improvement in unprocessed tuna might make the most difference because a very small increase in price is multiplied by very large volumes.

So perhaps we should simply be looking at how tuna is caught, handled and landed (and refrigerated) .... and forget sophisticated (and expensive) packaging / branding / marketing exercises ... even though some of our stakeholders think this is the salvation!

Remember, often evidence is ignored in favour of prevailing prejudice (or perhaps 'gut instinct'). I might return to this theme later.

Economic Impact

As part of this current project in Indonesia, a colleague and I are trying to build an Economic Impact Assessment model so that we can try and predict the likely effects on trade and on employment of interventions we might suggest to improve the Indonesian Fisheries sector (which is why we are here).

Building such a model involves the collection of a lot of economic and socio-economic data and then trying to work out linkages and inter-relationships (especially causal ones!).

It is hard work - and sometimes my brain hurts!! - but i recommend it as a way of getting a deep understanding of an industry or sector. I now have a pretty good idea of how fishing (and associated processing and logistics) works here .... and I am starting to understand how things we might think of doing will harmonise (or not) with government policy or will affect the employment of fishermen on remote islands (and their families) and so on. It certainly makes one aware of wider responsibilities - to the various stakeholders with an interest in what we are doing.

While the cat's away ....

I am in Indonesia on business.... but, of course, if you read this blog regularly, you will know this. Whilst away from home and from normal reference points, I find it a good time to think either innovatively or reflectively ... or occasionally both.

Because I have been dealing with many government officials, I have been reflecting on the nature of bureaucracy ... though I should - in their defence - stress that some of those I have met have been far from bureaucratic.

It seems that if you reward those who have big departments and run many projects, you will incentivise people to grow their department and grow the number of projects they run .... and unfortunately this seems often to be irrespective of the outputs of that department and the outcomes of those projects.

But then again, we know - don't we - that you get what you measure not what you want!

Tardy postings

I am off to Indonesia tomorrow working with UNIDO to help look at the value chain for the Indonesian Seafood Industry ... what can be done to add additional value ... and where any initial focus should be.

I hope to be in full communication contact ... but I also expect to be very busy ... so if postings are a bit late ... please forgive me.

World Productivity Congress

The World Confederation of Productivity Science, of which I am president, organises this Congress - with the help of a local host organisation - in this case ProductivitySA since the Congress is in Sun City, South Africa in September 2008 (21st - 24th).

If interested, go to www.worldproductivitycongress.com

or first take a look at the PowerPoint presentation which covers the main points. this is at ...

www.slideshare.net/johnheap/world-productivity-congress/

Romania not doing as well as it could

Cezar Coraci, chairman of the General Union of Romania's Industrialists UGIR 1903, says the lack of a skilled workforce, the high indirect costs of business and the instability of the fiscal system are the main problems industrial companies have to face.

Coraci believes the Romanian economy could be even more competitive in the EU if it bet on the development of some sectors such as the agro-food industry, the chemical and petrochemical industry, the car industry, constructions, IT, furniture production and consumer goods.

"These are sectors that are well rooted in Romania where there are raw materials, technology and a market demand," explains Coraci, adding there is a lack of some clearly defined objectives for each sector and strategic decisions for industrial development.

Statistical data shows industry workforce productivity rose by 8.7% in the first quarter of the year against the same period in 2007. However, the chairman of the UGIR 1903 says the trend of productivity needs to be correlated with industry wages since in March, the net average wage in industry reached 1,089 RON, up 13% compared with the same period of last year. If wages rise faster than productivity, there is a problem for Romania!

Less time, more productivity?

There have been suggestions recently that allowing staff at work access to 'distracting' web stuff such as Facebook actually increases productivity. The 'theory' is that such e-breaks help employees de-stress and recharge and also shows them that they are trusted - they respond (remember this is still theory) by exercising self-control over the amount of time they 'waste' on such sites.

I prefer evidence-based findings ... this is all anecdotal and hypothetical. Anyone know of any research that can back this up or refute it?

IT makes you more productive. Discuss!

Most companies spend lots of money on IT, presumably because they think it makes them more effective or more efficient or both. Yet, ask employees and they say they are burdened not empowered by the range of technologies in their lives.

I read recently of research which suggests both could be right - but clearly not at the same time.

A level of IT helps. Some tasks really benefit ... as does communication. And data sharing is key. This supports the organisational investment.

However, there is a 'tipping point' when the It does indeed move from help to hindrance as the range of information sources and the volume of communication starts to confuse and distract.

Anyone want to start a 'lean IT' consultancy?

Productivity = Sustainability

The NREG Scheme, India’s flagship welfare initiative, promises at least 100 days of work in a year to one member of a poor rural family. In the 2008 Budget, the programme was extended to all 596 districts. Four-fifths of jobs created under NREGS are in the area of water conservation, land development and drought-proofing.

Now the government has decided that such jobs must be lined to productivity - currently some States are creating the jobs but getting little useful and productive work from them ... they thus become a form of charity ... and become unsustainable.

Be open and flexible, please!

Transparency in the workplace - an open and honest communication channel between employees and leadership - has a significant positive impact on workplace culture overall according to a recent survey conducted by Opinion Research on behalf of Deloitte.

The survey reveals that there is a strong relationship between greater openness and transparency by leadership and ethical behavior at work. In fact, 84 percent of respondents agree that openness by leadership contributes to a more ethical workplace culture. Moreover, 68 percent said it would create a more values-based organization.

Another factor that leads to a more productive and engaging work environment is the ability to better balance work schedule and personal priorities. Modern lives demand greater flexibility ... for leaders and for the workforce.

The good, the bad and .....

I am in transit, returning from the IIE conference in Vancouver. Lean rules ... judging by the content of the conference ... and it is steadily moving from manufacturing into other sectors ... especially healthcare.

Paradoxically, yesterday I read that Toyota was having quality problems with one of its newer auto lines .... so not perfect, then!

It remind us that the pursuit of quality and productivity has to be relentless .... break concentration for a short while and results move from excellent to mediocre very quickly.

More lean

Well, I said I would try to post while at the IIE conference in Vancouver ... and here I am. I've been to the 'lean' track mostly, hoping to hear some 'pearls of wisdom'. The best presentation was on 'the psychology of lean' (by Karen Martin) reminding us that all change projects (whatever the methodology or tools used) are people projects.... and Karen managed to put over useful ways of engaging those being 'leaned upon' to ensure a greater chance of success.

On my travels

I'm on my way to the annual conference of the (US) Institute of Industrial Engineers in Vancouver, Canada. Sounds good? Well, it is ... but I'm writing this entry during a 7 hour stopover in Amsterdam ... not so good, eh?

If I find anything of real interest (and novelty) .... apart from my own presentation, of course, I' ll try to blog it there and then.

What I'm particularly interested in is whether I can discern differences in (productivity improvement) practice between the UK (and Europe) and the US?

Any bets on whether I can?

Brand new country

Vietnam has established a National Brand Name program that by 2050 aims to convey an image of a high productivity country backed by a firm set of values. This is to be a responsibility of every citizen and every organisation.

This is a real challenge as currently Vietnamese productivity is quite low.

One strategy is to build the national brand on the few strong brands marketed by Vietnamese countries.

This looks a positive mission and a laudable aim .. but currently the program looks heavy on exhortation, light on detail. Still, in 40 years or so ... we'll see how close they got!

This is not a productivity programme

Schering-Plough Corp., the Kenilworth, New Jersey-based pharmaceutical company, has announced that it will cut costs through layoffs and other reductions. The company promoted this as a 'productivity transformation program' - cutting 10 percent of its jobs and shutting plants to save $1.5 billion annually.

This announcement came two days after a panel of doctors had said that its crucial cholesterol drugs Vytorin and Zetia Vytorin should not be used as an initial treatment. The panel recommendation could badly affect sales, which reached a combined $5 billion last year.

This is NOT a productivity programme. It may be a rational and necessary decision in response to external market conditions but to masquerade it as a productivity programme does a(nother) disservice to the concept of productivity.

Quebec signposts for the world

Quebec recently saw a new provincial budget unveiled. Now Ministers are trying to sell it to their voters. Recently it was the turn of the Economic Development minister Raymond Bachand.

He didn’t mince his words … saying "Productivity has become my obsession."

Bachand ticked off a few reasons why the productivity issue has become so urgent: the worsening economic slowdown in the United States, the strength of the Canadian dollar, rising energy costs, competition from emerging economies and looming labour shortages in Quebec as the workforce ages.

Do those of you outside of Canada recognise the drivers?

Steely resolve

Those who work in the most complex manufacturing environments have the most to gain from the use of problem-solving teams. This is a finding from a recent US study.

Using data from steel minimills, the study shows that teams had the greatest impact if they tackled complex tasks in these environments, enjoyed meaningful incentives, and knew that management listened to them.

Steel mills traditionally have focused on the quality and quantity of goods produced rather than how workers interact, and managers often resist the idea of taking rank-and-file workers off the factory floor or paying them overtime for meetings so they can become collaborators. Yet during the five-year study, the number of mills using problem-solving teams more than tripled — and the practice became virtually universal on lines executing the most complex tasks.

“It’s not teams, per se,” said Kathryn Shaw, the Ernest C. Arbuckle Professor of Economics at the Stanford Graduate School of Business, one of the study’s authors. “It’s having an environment that supports teamwork. You need a group of experts coming together to solve a complex problem. You’re bringing people together because no one person can solve the problem as well as the group.”

Minimills operate 24 hours a day, so companies can’t increase yield by having people work longer. But rank-and-file employees can come up with ways to work smarter, from having more efficient training to reconfiguring production lines or finding faster ways to identify and reject unacceptable products.

This study might not surprise you - but the fact that such teams are still comparatively rare means that the point needs to be re-emphasised continually.

New Zealnd .. so far, so good ... but the future?

New Zealand has enjoyed almost continuous economic growth for the past nine years. The current economic cycle is now the longest and strongest in about 60 years, according to the Reserve Bank.

Having said that, the strong growth has seen several big imbalances develop such as the buoyant housing market, a tight labour market, the incredibly high level of the New Zealand dollar and a surge of imports. The result has been a rapid increase in the account deficit.

Three things are holding NZ back. Firstly, inflation, (currently about 3.5 per cent). Secondly, there is a very high current income deficit - in other words, they spend too much.

Thirdly, it's the productivity story. If they don't turn that productivity around, NZ will not be able to take the opportunities being presented.

New Zealand has weak productivity growth across the board particularly in construction, retail and business services. Productivity growth at the moment is 1.3 per cent, half of what it was in the 1990s.

Productive HealthCare?

The General Practitioner (GP - or Regular Neighborhood Doctor) is the cornerstone of UK health care - the primary route into the health care system for non-emergencies. GPs recently were awarded a new, controversial contract which appears to pay them quite a lot more money for possibly less work.

In productivity terms this seems a little crazy .. but it is difficult to get beyond the rhetoric of the press and get true, unbiased information or opinion.

However a recent report for the National Audit Office gives a useful figure - in terms of measuring value. Evidently the GP system (including the associated nursing and admin staff) costs each UK resident about £120 per year. Productivity may be unknown but value looks pretty good to me ... i pay less than my TV licence!

Prospects for Africa?

Africa is not always what you expect .. it throws up many surprises. Take Swaziland ... while unit labour costs are relatively high compared to other middle income countries, productivity is also as high as in some high performing middle income economies such as China and Thailand.

The country's latest investment climate assessment report prepared by the World Bank states that even though local firms are less competitive than firms in the best performing middle income countries, these still outperform firms in most other countries in sub-Saharan Africa.

If you want to find out more about the relationships between African productivity and the global productivity scene, you should attend the World Productivity Congress in South Africa in September 2008.

Lessons from the Caribbean

Within the next three years, all primary schools across Jamaica should possess a productive school garden as part of the Ministry of Agriculture's thrust to boost productivity.

This sounds like an excellent idea - raising awareness, teaching fundamentals and preparing for the future.

There are all sorts of ways in which this lesson could be extended in other countries in other areas of activity - working towards a national strategic goal.

Release the funds

According to UK accountancy firm, Grant Thornton, if UK industry could match US productivity levels, enough growth would be generated to provide an additional £13,000 to every household.

Productivity is becoming recognised as the true measure of future potential ... again Grant Thornton estimate that many more UK companies - including many SMEs - will have some form of productivity/performance measure in place by the end of this year ... many of them for the first time. They are, however, cautious about the number who will use such measures to drive real improvement.

Who cares about fuel consumption?

Ford are selling the productivity of their new trucks ... the technology that allows fleet owners to more effectively track and maintain their vehicles and allows drivers to be more productive.

The technology -from Ford Work Solutions - includes an in-vehicle dashboard system that provides Internet access, an RFID asset-tracking system, a fleet telematics and diagnostic system and a security system.

It used to be power, performance and cost that drove vehicle sales .. now its productivity and a different kind of 'performance'.

An unheathy Health system?

Recent figures published by the UK's Office for National Statistics (ONS) suggest that the output of the National Health Service has increased, but productivity has fallen.

NHS output rose by 3.8% a year from 1995 to 2006, according to the estimates. By 2006, output was some 50% higher than in 1995, before allowing for changes in quality.

However, inputs grew at a faster rate, and productivity actually fell by1.0% a year.

Miles further

The 'public' is becoming concerned about food miles - the distance food is transported before it reaches the table (from field to processor to distributor to supermarket, for example). The actual 'carbon footprint' of such journeys is hard to work out and hard to compare to alternative (perhaps less efficient) ways of processing the food

This is of little concern to most of the public - they are concerned on principle and often emotionally rather than logically.

Food processors and retailers have to take this into account.

It may be that after 20 years of demanding strawberries year-round, the public will only expect them when in local season.... and the customer is right as we know!

And Costa Rica was ...

So, Costa Rica is beautiful .. and rich and diverse in terms of flaura and fauna. But you knew all that. Did you also know that the boom in property is causing a garbage disposal crisis .. how to collect it, where to put it, how to move it??

Regional and national government is trying desperately to balance the need for economic expansion with the need to protect the environment and to ensure adequate infrastructure.... sometimes they get it wrong!

Reminds me of many companies who crash ahead in one direction without thinking of the unintended consequences.

Big issues and big decisions need thinking through!!

Meet Me in St Louis

... or San Jose, Costa Rica actually. I fly there tomorrow for a Board meeting of the World Confederation of Productivity Science. Before you say something like ... "Couldn't you do it somewhere less exotic - or be videoconferencing" ... the answers could have been 'Yes' and 'Yes' but we are trying to meet a number of influential members of the Costa Rica political and economic community with a view to discussing some ideas about social productivity and wealth-creation.

That kind of discussion cannot be held by videoconference. Subsequent, follow-up discussions could perhaps .. but the first time you meet someone who you hope might form some sort of relationship or alliance with you, you need to see and 'feel' them ... to establish confidence and trust.

Or is that just old fogeys like me brought up on face-to-face contact. Would the Net2 generation need such contact?

Actions, not words

The State of Selangor in Malaysia is currently experiencing rising levels of inflation. The State government, recognising that this is not sustainable if Selangor wishes to move up the economic performance league table, has declared 2008 as a 'year of productivity'.

So far, so good. However, I have seen no evidence of what this means in practice. ... what are the priority areas, how will they help organisations raise productivity, what are they doing about infrastructure. (Note: these things MAY exist, I just haven't seen them.)

The lesson. Rhetoric is easy. Meaningful action is much harder. But rhetoric solves few problems!

Does IT help productivity?

This is a trick question. Korea has recently experienced high levels of productivity growth (manufacturing productivity rose approx 15% in the June-September 2007 period and continues to grow). This is not as a result of deploying IT but because the IT manufacturing industry is very important to South Korea and labour productivity in this industry rose 25% in that same June-September 2007 period.

The moral is .... Don't use IT, MAKE it.

Peeling away the truth

A recent comment in an Australian newspaper pointed out that 80% of Australia's trade is within Australia., only 20% being exported. This means that increased productivity is necessary for internal reasons rather than as an aid to international competitiveness.

Interesting that we sometimes forget about the obvious ... it may not matter if we take the right actions for the wrong reasons, but if we get the actions wrong on a wrong diagnosis, we are in trouble.

So, when someone says "We need to do this ...", take a step back and ask "Why?" and then ask... "By doing this, what are we not doing?" One or more 'truths' might emerge!

Hair today ... and tomorrow.

I read the following comment recently .....

Manufacturing industry has the scope for continuous productivity improvement. Service businesses have much less scope. Cutting hair and pouring beer take as long now as they did in the Sixties.

It would make an interesting examination question for students of productivity, wouldn't it. Simply give them the quote and ask them to outline a potential productivity strategy for a hair salon or bar.