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.