Explaining productivity growth

Explaining productivity figures needs interpretation and judgement.

For example, the UK has had low productivity growth for the last few years.

Why?

Bank of England economists suggest that one reason might be that fewer businesses have collapsed in recent years, meaning fewer workers have moved from low productivity into higher productivity firms.

As the economy improves, some of these firms that have survived and staggered through the last few years may be able to pick up production without hiring additional labour. so, we may see productivity rises in the new couple of years.

Learning from the Past

I’ve recently returned from Greece where I was privileged to visit the site of the oracle at Delphi – a major centre of  world communication in the 5^th century BC.  The size and scale of what was the Temple of Apollo is staggering – this was both a communications and commercial centre of real magnitude.

It is good to be reminded of past civilisations and their power and influence – and also good, of course, to be reminded that such civilisations often collapse or fail.  ‘Success’ is a fragile commodity – and the world changes around successful organisations – and nations.   Those who fail to ‘read the runes’ and fail to adapt to the changing environment are doomed to fail.

Don't blame the team

On my recent visit to India, I visited a number of organisations and facilities where the senior mangers were critical of the performance of the workforce - citing their reluctance to work harder as a major reason for low productivity.

My many years of experience has taught me that this is rarely the case.

If productivity - and labour performance - is low, it is almost always entirely down to the 'the system' - the processes, procedures, and working conditions set by managers and supervisors.  Workers end up with low performance because they spend too much time waiting for work, using poor tools, dealing with inferior materials and operating unreliable machines. It is rarely because they are not working hard enough.  They are not being allowed to work harder.

So, before you blame the team - take a good look at these factors ... and then take the responsibility (and any blame) on yourself.  Your workers cannot change these things. You can!

If I can't prove it, it probably isn't true.

In a recent trawl across productivity writings - papers, blogs and so  - which I find useful both just to keep in touch and occasionally inspire me to new thought -  I came across the following..

Decide on a plan, get your supplies and ready your team. This is how you set yourself up to take advantage of the Virgo full moon of productivity.

This was in a respected publication. I was appalled.  Not by the advice, of course.  Though it may be a bit over-simplified, the 'plan and prepare' message is essentially sound.  But to couple that with astrology, suggesting that the alignment of planetary objects somehow affects what you should do to improve productivity, is at best inappropriate.  I am a scientist by background and believe that to make such claims requires evidence of causality.

As a scientist, I am prepared to accept that there are things we cannot explain. But to invent pseudo-science and claim causality where none exists is simply fraudulent.

Productivity improvement can sometimes be as much of an art as a science - after all we are dealing with human beings ... and they can be unpredictable and illogical ... but one has to 'dig deeper' to understand the psychology of individuals and groups - not assume that there are external, controlling forces.