• 08 Jun 2018 7:15 PM | John Heap (Administrator)

    All nations want to increase their productivity.  This makes them more competitive, brings rewards for citizens and allows society to develop.

    The problem is that no-one is quite sure how it can be achieved.

    There seem to be as many solutions (or strategies) as there are nations.

    Is there a simple answer?

    No!  It is right that each nation tackles the problem from their own context and their own starting point.

    Beyond that there will be obvious similarities - build a macroeconomic environment that supports small businesses, build transport and technology infrastructure, educate and train the workforce, support innovation - all simple in principle but not quite a simple in practice, especially when scaled up to national level.

    However, at least (and at last) we are seeing positive efforts to address the issue of productivity.

    If you can address it in your organisation - and people like you can do the same - the collective effort might bear fruit.

  • 01 Jun 2018 6:18 PM | John Heap (Administrator)

    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.

    You need an independent expert who has 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 your spare time - it is too important.

  • 25 May 2018 4:03 PM | John Heap (Administrator)

    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.

  • 18 May 2018 8:50 AM | John Heap (Administrator)

    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.

    The same goes for your organisation.  Producing more is easy.  Producing more productively - and making real gains - is harder but necessary.

  • 12 May 2018 7:08 AM | John Heap (Administrator)

    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.

  • 04 May 2018 7:32 AM | John Heap (Administrator)

    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.

  • 27 Apr 2018 8:58 AM | John Heap (Administrator)

    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.

    If this is your organisation, then you as the leader of the organisation have to find some way of providing a stimulus - forcing your managers 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 you, at the same time, suggest that the total budget allocation will be no more than, say, last year minus 5%, then your departmental managers have to think more deeply about how they can run their departments and achieve agreed outcomes.  Your 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.

  • 20 Apr 2018 12:10 PM | John Heap (Administrator)

    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.


    The rest of the world needs to avoid getting sucked in - no long-term good will come of it.

  • 13 Apr 2018 9:28 AM | John Heap (Administrator)

    Business people who come from the product, manufacturing or engineering disciplines have a natural instinct to try to exercise process control to improve efficiency and profits.

    Those without such a background often aim at controlling costs.

    Some take one or other of these approaches to extremes. (Think Six Sigma.)

    The great advantage of the former (exercising process control) is that it involves the establishment of useful metrics and experimentation to see what makes those metrics move in the right direction.

    The problem with he latter approach (exercising financial control) is that this measurement/experimentation process becomes much more difficult as the linkages between actions and financial consequences are often either too indirect or occur over too long a time. By the time the results are in, it is too late to change the parameters that have resulted in poor results.

    So though financial control might be the ultimate aim, something more direct is needed to give you useful levers to pull (or push).  You need some intermediate, relatively direct measures that will tell you promptly what is happening when you make changes.

    Control the process properly - and the finances will take caee of themselves.

  • 06 Apr 2018 12:05 PM | John Heap (Administrator)

    There is some debate about whether a concentration on productivity is bad for creativity.  However this is a fallacy. Over-concentration on quality - and especially compliance - can be bad for productivity, but productivity and creativity are natural bedfellows. 

    So it depends on how broadly or narrowly you interpret productivity.  Rigid compliance to standard operating procedures (SOPs) in the name of productivity might stifle productivity unless you give your employees another avenue where they can exercise invention and innovation.

    My old friend, Tor Dahl, always used to say that a natural approach to improving productivity is to:

    (a) unfreeze the organisation - allow staff the time and opportunity to contribute ideas as to how what they do might be improved

    (b) experiment with those ideas to arrive at new ways of working

    (c) re-freeze the organisation by creating new SOPs to reflect the new ways of working and lock in the productivity gains.

    Some time later, repeat the cycle. 

    Then we ensure that creativity is encouraged and that it underpins higher productivity.

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