Issue 4

Andrew Bass's Pragmatics Newsletter

Practical techniques and thought-provoking ideas

ISSUE Number Four. August 2007 

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An Extra Day Off Every Week?

Research by the London School of Economics recently reported in the Financial Times ("UK productivity still trails competitors" June 25, 2007) showed that in terms of output per hour worked, Britain lags behind Germany by 13%, the US by 18% and France by 20%.

According to Raffaella Sadun, the report's author, "This means that if we could reach French productivity levels, we could award ourselves 20% higher wages or take a day off and still earn the same". Well maybe, or maybe the figure is flattered by the fact that the French are only allowed to admit to working 35 hours per week... Either way, most people I've talked to agree we can be confident in the German and US comparisons. 

The report found that the lag in UK productivity was mainly due to "deficits in innovation, skills and management practices". In my view there's really no excuse for deficits in these areas. There are many well-understood methods for improving them, they need not be expensive (they are certainly cheaper than the average white elephant IT system), and there would seem to be a clear ROI for pursuing improvements.

Too often there seems to be more interest in maximising capacity utilisation than ultimate productivity. In other words, whatever the organisation says, in practice people are more interested in the number of hours someone (or some machine) is kept working - and therefore how busy they appear - than the efficiency with which they produce a result for a client or customer.

These are some of the symptoms: 

• Doing an easy job yourself rather than delegating it to the appropriate level.
• Presenteeism" - making a show of being in the office to conform with some ridiculous cultural norm.
• Rewarding people on the basis of revenue (or worse, volume) when you should be rewarding them for making a profit.
• Counting the achievement of artificial internal targets which are unrelated to the value produced for a customer or service user (this is endemic in the public sector from what I can tell).

Here are some quick suggestions for where to seek productivity gains, one for each of the three areas mentioned in the FT article: 

·         Innovation, especially process innovation. Suspend what you know about how to run your operation and think about it afresh from the client's or customer's point of view. What do they need to have happen to be satisfied? How can you arrange for them to have the same (or, ideally, better) experiences than they receive currently using less time, inventory, effort and/or expense? You can learn more about this powerful way of thinking about your business in this article: The Importance of Customer Experience is Nothing New - but it IS Important.  

·         Skills. Perhaps the single most effective skill for increasing productivity is effective delegation. To maximise efficiency, the principle is to delegate to the least expensive person or resource that is capable of performing the task. Read my article Eight Steps to Effective Delegation for a delegation format which you can adapt to your situation. Although I grant that there are considerable psychological and cultural barriers to effective delegation in some organisations, the skill itself is quite easy to learn, and the reward is huge (e.g. freed up management time, better developmental experiences for staff, faster organisational response to clients and customers).  

·         Management Practices. Step back from your culture and look out for anything which reinforces busy-work over true productivity. For example, are professionals rewarded for high personal billings rather than the profitability of the total work group they manage? Is it more important to cross all the t's and dot all the i's on the paperwork than to attend to a customer? Is winning a new account (even at a net cost to the business) considered 'heroic', while quietly developing a highly profitable long term client relationship is seen as 'boring'? There are not always quick answers to these issues, but have a look at my article about How Culture Helps or Hinders Results if you want more ideas - or call for a chat.

My first two examples can lead to fast and dramatic results without rattling too many cages. The third one is deliberately more challenging but may have even greater rewards over the longer term.

By the way: would you take the 20% increase in pay or the extra day off?

Copyright 2007 Andrew Bass.  All rights reserved. 

Permission granted to excerpt or reprint with attribution.  

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