Productivity – National Issue or Business Necessity?

20-September-2013 in Granite Consulting Community by Lucy Thomson

“However beautiful the strategy, one should occasionally look at the results”

Our Leader Series has progressed this month with Peter Kullen’s (Director at The Productivity Imperative) recent presentation titled Productivity: National Issue or Business Necessity? With a large group of Business Process & Change and Keynotes professionals, Kullen facilitated an informative and thought provoking discussion.

Understanding Productivity. First to define productivity – it is a relationship between input and output. There are 5 ways that the ratio that is productivity can be lifted:

1) An small increase in input, generating an notable increase in output
2) A small decrease in input that results in no change to output
3) A large decrease in input, that results in a small decrease output
4) No change to input but an increased output
5) A decrease in input that generates an increase in output

The ever-challenging paradox in productivity is to achieve more with less and cause the nirvana scenario (the 5th point above), but more commonly we appear to be achieving less with more.

Costs. An important point raised by Kullen was that cost reduction does not necessarily relate to improved productivity in a business. Consistent cost management makes economic business sense, however constant cost reduction can be ineffective and detrimental. While it is easy to reduce business costs, reducing them in a way that does not impact the capacity to effectively execute strategy is not so simple. Furthermore, how do you ensure they don’t simply grow back? If you can only compete on price, then your focus will always be on costs, and this doesn’t guarantee success.

Change Management. Kullen’s opinion is that such change management itself is somewhat an oxymoron – you cannot manage change, you have to learn to live with it, therefore the capabilities required for change managers should be the capacity to be flexible, adaptive and responsive. When a company’s position is high, the need for change is low. However when a company’s position is low, the need for change is high and the resources available are often limited.

Culture. Company culture is slow to change – an anthropological study of 267 societies found that none changed their culture across multiple generations. With that in mind it is unlikely that the culture of an organisation will change over the lifecycle of the CEO (typically 3-7 years). Consequently, the same problems tend to cycle round generations of teams, they were solved in eighties by one team, the nineties by another and are probably being solved at present but another team again. An unnatural disregard of the past frequently exists, companies already have a rich history and understanding of what has and hasn’t worked.

Many thanks to all of those who contributed to this discussion, the feedback was entirely positive. For more information on this session or to request the slide presentation, please email [email protected]