Employ a questioner

Several years ago, Peter Drucker noted that if most organisations increased their productivity by 10% it would double their profits.   At that time, 10% seemed achievable.  Now, firms are lucky to achieve 5% - and nations feel good if they move into positive figures.

What has changed?

Not a lot, actually - but firms seem to have lost the 'secret' to improving productivity.

By 'secret', of course I mean adopting a consistent, structured approach to planning and executing productivity improvement projects.  Where are the industrial engineers and work study engineers of yesteryear?  Gone!  Managers are expected to improve productivity as part of the day job.  But they are busy people - and they are too immersed in what is going on.  They cannot stand back and take a dispassionate view.  They cannot ask themselves the hard questions.

We need independent experts who have the skills and the time to take the hard view, to ask the questions, to think about solutions, to evaluate those solutions and to draw up implementation plans.  This cannot be done in spare time - it is too important.

Why aren't firms more innovative?

We hold innovative firms up to the light- as rare, glorious examples.

Most organisations have a number of creative people - whether or not in avowedly creative roles.

When these creative people come up with ideas that could become innovations - the ideas tend to be evaluated too early and too harshly.  Evaluators look for ways in which the idea could fail rather than looking for ways in which the idea could succeed.

Some products will fail because they are not technically feasible - they don’t do what it was thought they would do.  Others will fail because they are financially not viable - they cost too much or will fail to generate sufficient additional revenue.

However, the biggest killer of innovation is a lack (rarely explicit) of organisational feasibility. It just doesn’t fit with what we do - or how we do things. We don’t have a department where it fits.

If you have good ideas, treat them kindly - look for ways to make them fit and make them work. Otherwise you are never going to innovate.

India's difficult task

India is often cited as the next major economic powerhouse - perhaps even overtaking China.  This is based on India's recent record in moving up the international GDP league.

However, look just below the surface and you will see that this impressive growth has largely been fuelled by widening employment participation.  India has been very good at creating jobs.  It has been significantly less successful in creating productivity.  India's GDP per worker is very low. This is OK for growth in certain sectors but limits India's ability to compete in some sectors - and in overall terms.

India knows it has to improve and increase skills - and is trying to find ways of doing just that.  But this is much trickier than simply employing more workers.  It is, however, essential to securing and sustaining long-term growth in productivity.

Start (real) coaching

Coaching has become 'fashionable - the number of business coaches has multiplied dramatically over the last 10 years.

However many of thee coaches are 'consultants' under a different name.

What is the difference?

Well, a consultant attempts to improve your business.

A coach, on the other hand, is trying to improve you - so  that you can improve, and continue to improve, your business. The focus, the approach is quite different - as are the skills required.

So, if you need coaching, make sure you employ a coach with the right (personal ) skills and the right focus.

Get them on board - quickly

Careers have been changing for some time. More and more people have portfolio careers, switching industries, roles and employers frequently to fit in with a more flexible lifestyle and give a better work-life balance.

This means most firms have higher labour turnover and greater recruitment costs.

It also means it becomes necessary to improve the effectiveness and efficiency of recruitment and induction processes - what is often called 'onboarding' these days - so that shorter tenure employees get up to speed quickly.

It can take months to get an employee fully up to speed in a skilled job - every week saved is worth money.

Not exactly taffiff-ic!

The US is imposing tariffs on a number of imports - notably steel and aluminium.  The aim is to protect US manufacturing by making foreign goods more expensive - thus making domestic products more competitive.  Now I haven't seen the details of the tariffs - but I do know that this is an area in which there are often unintended consequences - and my experience also tells me that the 'pain' from unintended consequences often outweighs the 'pleasure' from the intended consequences.

I hope President Trump's advisors have remembered that US auto manufacturers import steel and aluminium parts from around the world.

There is evidence that - mot surprisingly - countries like China will respond in kind, imposing tariffs on goods most likely to come form the US.

There is other evidence that Modi, in India, is also looking towards forms of protectionism - it seems to becoming into fashion as politicians become more populist - looking for short-term vote grabbers rather than long-term economic success.
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The rest of the world needs to avoid getting sucked in - no long-term good will come of it.

Give them a jolt!

Sometimes, well-performing organisations move into 'coasting' mode - they know they are good, so they keep doing what they are doing, perhaps taking advantages of new technologies or 'obvious' improvements when they come along, but not actively striving for change and improvement.

in such cases, the leaders of the organisation have to find some way of providing a stimulus - forcing them to think more deeply about improvement opportunities.

One such stimulus can come from zero-based budgeting where the organisation makes departments bid for all the funds they need rather than taking last year's budget and adjusting it to reflect changes.

If the leadership at the same time suggests that the total budget allocation will be no more than, say, last year minus 5%, then departmental managers have to think more deeply about how they can run their departments and achieve agreed outcomes.  Those departmental managers  might think such an approach is 'unfair' - but if it unleashes creativity and higher productivity, perhaps a bit of unfairness is what is needed.