Five basic steps for big improvements

ORGANISATION LEVEL:

Managers, whatever their level, need to take just five basic steps to make big productivity improvements – click on the link below for outline details

http://www.productivityknowhow.com/?page_id=378

BUT:

1. Corporate plans – If they exist, they’re not seen or understood by most managers

2. Performance measures – Most lack 80% of the measures they need

3. Analysis of potential – Most managers don’t know how to assess their % scope on offer to improve

4. Special improvement projects – Most have not been taught how to manage special improvement projects

5. Continuous improvement – Most in the West ignore the huge benefits possible from taking such action on a daily basis

No wonder national productivity improvement is slow at best, whatever the organisation

 

NATIONAL LEVEL:

The same five steps also apply to the action required of government ministers for they have a significant role to play in productivity improvement

Click on the following link

http://www.productivityknowhow.com/?page_id=1331

The same problems as above arise with each step

Hence, despite well-intended speeches and media headlines about the need to improve productivity and ‘close gaps’, little effective change happens

Jan 18

Groupthink waffle or Vanguard results?

The following is a precis of part of an email from Professor John Seddon of Vanguard Consultants (with whom I have no connection) who  spoke at a public-sector ‘shared services’ conference

The opening keynote was from the interim leader of the Government Shared Service programme – a very nice man – who said:

  • We aim to be the best civil service in the world, we are already world class

  • Shared services is a lever for change

  • Shared services in government is no longer a ‘programme’ it is ‘strategic’

  • We are to be a centre of excellence

  • We are re-shaping our governance to be more inclusive and more strategic

  • Technology drives a different way of doing things

  • The wider changes in society mean greater expectations amongst the public

  • Implementation will be Agile

  • We are going to professionalise our people

  • We will drive value and efficiency

  • We will take advantage of off-shoring

  • We want more self-service

  • We will be using robotics and artificial intelligence

 Interim Leader described how this was going to be done:

  • A decision has been made to split up the management of technology and management of the service centres as this, we were told, will drive lower costs

  • There will also be ‘process convergence’; process standardisation will be ‘relentlessly’ driven and there will be ‘standardised functions across government’

  • The services will be ‘designed around user needs’ and will be ‘intuitive, easy to use and mobile’

  • Just as services will be digital, government will be ‘digital on the inside’

  • And everything will be done in a ‘collegiate and collaborative’ way, establishing a ‘cohesive community of practice’

Hearing that, what’s your level of confidence (as a tax-payer) – would you invest?

 Well, actually, you are investing

Interim Leader assured us they had already saved 20% of their operating costs. This was a surprise to me. The most recent National Audit Office (NAO) report said the savings were less than the costs.

The NAO Representative there then told us that shared services should be seen in conjunction with ‘transformation’ and the quality of business cases – and they should be ‘realistic’, represent ‘value for money’, have ‘clarity’ and show understanding of ‘risks’

However, despite a series of NAO publications evidencing the expensive failures of shared services, we had no explanation for this

And a quick search on the internet revealed NAO Representative used to work for McKinsey – and I knew already his boss used to work for PWC

Next up was IT Man who proclaimed:

  • Digital and Artificial Intelligence (AI) are ‘disruptive’ technologies

  • ‘You don’t want to go the way of Blockbuster’ (yawn – how often has that been cited as the ‘killer’ case?)

  • ‘It’s a mobile / social media world out there now’ – ‘the technology is coming to the office’ – ‘traditional organisations are ‘edging towards digital’

  • The two ‘operating models’ will meet – ‘AI will connect them’

  • It’s all about doing things in an ‘Agile’ way.

And he banged the same drum that is the basic rationale – transactions will be cheaper – we will save enormous sums of money.

Oh really?

When it was my turn I presented a report from the Public Accounts Select Committee which had this to say:

“Central government has long pursued shared service centres as a way to reduce costs and free up resources from back-office functions to provide better front-line services. The principles of reducing costs through using shared services are straightforward and widely understood, combining two key elements:

  • Standardise processes and services so that they can be provided in a consistent and repeatable way, in high volumes, by a single provider on a common operating platform;

  • Outsource operations to an organisation that can specialise in providing a service and, through economies of scale, can offer the service at a lower cost.”

But these are politicians – what can we expect them to know about management?

How did they come to this view? By listening to advisers

And where were most of them from? The IT and Big consultancies

And they should be aware of four basic arguments for not sharing services:

  1. A ‘common operating platform’  is a euphemism for a large-scale IT system:

    1. 90% of large-scale IT systems fail

    2. 30% fail completely (e.g. Single Farm Payment, NHS patient records)

    3. 60% fail in as much as they cost much more than planned, are not fit for purpose and don’t deliver the planned savings

  2. Standardisation of service work drives costs up, not down, simply because a defining feature of many service organisations is the variety of customer demand – if you push high-variety demand into standardised processes you drive costs up.

  3. Economies of scale:

    1. From less of a common resource – i.e. fewer managers, IT systems, buildings and so on – it’s often hard to dispose of buildings or existing IT contracts and any saving from less of a common resource is relatively trivial, albeit the only real evidence protagonists cite

    2. From lower transaction costs – much larger savings are promised here but, if you focus on cost, your costs go up.

  4. Outsourcing services to specialist organisations – but when you do that you lock in cost escalation

I then asked the audience how politicians react to the abundant evidence of failure with ‘shared services’.

Admittedly, they were unaware of failures in the private-sector, and there have been many, but public sector failures have been in the news regularly:

  • Think Cornwall, Somerset, Sandwell, Liverpool, Rotherham, Birmingham, Suffolk, Account NI, Research Councils, centralised police call-handling in Scotland among many others

  • And news of the same in Australia, New Zealand and Canada where governments have imagined the UK government knows what it’s doing

When the shared services initiative started five years ago we were told it was going to save £2 to £4 billion a year – we haven’t seen anything to match this promise – instead we are overwhelmed with evidence of failure – and, as time has gone on, the promises become less ambitious

By contrast there is abundant evidence that public services can be massively improved while at the same time radically reducing costs and it can be done in months, not years

But that’s for another precis of another part of Seddon’s talk

 

Jan 15

Scrap traditional organisation structures

Alison Vekshin, a freelance journalist, says: “Companies have followed a linear top-down organisation structure, but that approach is quickly becoming outdated – business leaders now favour a more flexible structure, and have seen that workers are more productive and innovative in an autonomous work environment”

The traditional linear organisation chart was designed to ‘create order and delegate responsibilities when there was limited technology and communication’ – the top delegated to and managed the middle layer which did the same to the bottom

Critics said this created bureaucracy which reduced efficiency, productivity and speed

Vekshin claims such pyramid structures are becoming obsolete, to be replaced by flatter structures

As new technology revolutionises how, when and where people work, companies recognise that, by removing a rigid chain of command and empowering employees to voice their ideas and make their own decisions, productivity increases

Google, for example, have already moved to a flatter structure, allowing workers to make decisions and have direct access to top-level executives

Valve Corp, a Washington video game developer, has an employee handbook which opens with “Welcome to Flatland – this company is yours to steer – toward opportunities and away from risks – you have the power to green-light projects”

Zappos, an online shoe retailer, also employs a self-management system which they call Holacracy  – it replaces managers with self-directed circles and traditional job descriptions with a fluid approach of people filling several roles

Tony Hsieh, CEO of Zappos, says: “When companies get bigger, innovation or productivity per employee generally goes down” – Holacracy enables employees to act more like entrepreneurs and self-direct their work instead of reporting to a manager who tells them what to do

Conclusions:

  • When companies adopt a fluid, not necessarily flat, structure workers move with ease among different roles and responsibilities

  • Such companies set themselves up for success by utilising freelancers to provide niche expertise and help the companies scale up and down as needed

Jan 13

What do the East want from the West?

When we Westerners drop in to Asian countries nowadays, most are staggered by the modernity that confronts us – the numerous sky-scrapers, concrete flyovers, n-lane motorways – and millions of cars and motor-bikes with few of them old bangers

Hong Kong, Jakarta, Bangkok, Tokyo, Singapore, Kuala Lumpur are but a few capitals where this applies

And there’s skyscraper building cranes everywhere so much more to come

Asian middle classes already number billions – and it’s those billions that now drive a large part of global demand

The question for Western G7 nations is ‘demand for what?’

  • Clearly it’s not demand for basic commodities – e.g. bog standard cars, motorbikes or bicycles – where most demand is met by local suppliers

  • But it is demand for quality, upmarket stuff that lets them differentiate themselves or at least ‘keep up with the Joness’ – and most seem to want stuff which is distinctly Western

Sadly, none of these developing or developed Asian countries seem to want to build on and develop their own cultural histories and ways of living – the very things we visitors would like to see and cause us to visit more

Instead, for example:

  • Their cities comprise buildings which look the same as in the West and leave one thinking one could be anywhere in the world, not somewhere different and so interesting

  • Their streets are littered with Western outlets for the likes of Starbucks, KFC, Boots or Tescos

  • Their upmarket clothes, trainers et cetera are all western brands, sporting latest logos

  • Even their choice of music is usually western – and they know the words to many of our pop songs

The good news is the existence already of this huge demand for our quality goods and services

The better news is it’s increasing, unlike demand from our current biggest export market, the EU

So our home suppliers of said goods and services need to be pushing their wares out there, especially post Brexit

Jan 13

Japan falls down manufacturing productivity ladder

Back in the 80s, the West was besotted by the miracle performance levels of Japan’s manufacturing sector and mistakenly concluded that TQM – Total Quality Management – and ‘culture change’ was their secret

Actually, it was mostly due to good performance measures, use of basic statistics and common sense in finding best ways to meet customer demand

Since those heady days, their apparent productivity levels have steadily declined

According to the JPC – Japan Productivity Center – in the last five years alone, labour productivity there declined by 10% leaving it at around 70% of the US figure

And according to the OECD – Organisation for Economic Cooperation and Development – Japan’s position versus others of its members was:

  • First In 1995

  • Seventh in 2005

  • Tenth in 2010

  • 14th now, below France, Germany and the UK

This downward trend is mostly due to a weaker yen plus technological advances made in other countries

Hence the Japanese government is to offer tax breaks and other incentives for companies to invest more in new technology

The next decade will certainly bring some ‘interesting times’ for this global sector

Jan 08

Hours and places of work?

Why is it we now work 9 til’ 5 for 5 days a week?

Many years ago, people worked 7 days per week – then this fell to 6 days per week, but 12 hours per day

It took Henry Ford, back in the 30s, to reduce the working week to 40 hours – 5 days at 8 hours per day

Why so?

To improve his workers’ productivity by making them happier – and when his profit margins doubled in a mere two years, many other firms did the same

And it did not take long for white-collar office workers to follow suit although, for a time, some worked half-a-day on Saturday mornings (e.g. bank staff) but this proved such a waste of time for most that it was soon stopped

Nowadays, offices open at 8a.m. or earlier, and stay open until 7p.m. or later – many people believe that being ‘seen’ in the office early or late demonstrates to their boss that they’re working hard, thus helping secure their job

But the thing most wanted from most workers nowadays is quality of results, produced on time i.e. not time inputs – it doesn’t matter when they start or finish work, nor where they do much of it, as long as they produce the results needed

So, if companies are to get the best out of their troops, they should consider introducing flexibility into working hours and places they require of their troops in order to keep them happy and thus productive

Why not a 4 or even 3 day week?

Employees would love this, as long as the hours per day were not excessive

Most brainworkers can’t work long hours over 3 consecutive days – they will become fatigued and unable to produce the results – and brawnworkers might well suffer an increase in shop floor accidents because of tiredness

So the concept is attractive, but not if it involves 35-40 hours input being squeezed into the shorter period

Why not a shorter working day e.g. 6 hours?

Some companies already have moved to this, believing their employees would become happier and healthier, and thus more productive, not less

This is especially true for creative companies where brains need regular breaks and refreshment if they are to be creative – a good reason why employees should not be ticked off for using social media at work

Some say 4 continuous hours a day of hard thinking is a maximum for most brainworkers – and a high proportion of such work can be done anytime, anywhere, especially given the internet connectivity now available

So, to recruit and retain the best people, many brainwork firms must recognise that rigid time rules from yesteryear will not work nowadays

Why not flexible hours?

For some, this allows workers to start work at non-conventional times – say 8 to 4 or 10 to 6 rather than 9 to 5 – or work a mix of short and long days – such flexibility helps workers tailor their work time to their domestic situation plus avoid rush-hour congestion

For others, it means shorter working weeks, even working on ‘zero hour contracts’ where firms call them in as and when needed – such contracts suit many people who only want part-time employment – sadly, many others choose them because they have no alternative

The upsides here for both employers and employees far outweigh any downsides so it’s surprising that so many still do not offer flexible hours

Why not remote working?

A Northern Ireland finance firm, AKFP Group, closed its HQ for a full month on a ‘remote working initiative’

They found it boosted both staff morale and productivity

Staff were allowed to work from locations of their choice – the result was ‘they reaped the benefits of being able to change venues, eradicate long commutes into the office and, above all, increase the happiness of employees’

Potential setbacks to workflow were minimised due to a cloud-based project management system that aided the effectiveness of remote working as staffers were able to access everything required from the cloud to service clients as normal

Calls into the office were shared or diverted to an allocated mobile and clients were made aware so that face-to-face appointments were scheduled the month prior as part of the planning phase

Group director Roger Kennedy said: “All our clients and the whole team were really supportive of the initiative – all client queries were dealt with efficiently and in line with our service levels – working remotely enabled my team to spend more time with their loved ones and get out on a summer’s day, providing they had completed their task list”

A staff member said: “There is a high level of trust in the office and it’s a great feeling to be given the flexibility to do this – we did have to visit the office occasionally to review post, but that wasn’t a problem”

Conclusion – the firm is planning to roll out the one-month initiative again next year

 

 

Dec 28

Work hard, then play hard, for best results

Very very few can run at speed for long, like Mo Farah – we need to pause, rest and recover – only then can we rejoin the race and compete

Nils Salzgeber (aka Hacker Noon), in a recent post, claims this is because ‘all organisms on this planet follow rhythms’

The most famous is the circadian rhythm where, over a 24 hour period, we’re awake for 15-17 hours, spending energy, and asleep for 7-9 hours, recovering, given our energy resources aren’t limitless

Hence, not even Usain Bolt can sprint flat out for more than 10-20 seconds – equally, we can’t concentrate/ be alert and creative for hours and hours on end – our performance levels soon plummet after a short while – a rest/ recovery period is then needed – it’s why critics of staff who use social media at work might be well advised to take a step back and reflect on the likely impact of their views on productivity levels

So to maximise our performance/ productivity levels, the suggestion is ‘best to have periods of intense activity followed by periods of intense rest’ – a series of sprints, not a never-ending marathon

But this is not how most of us live

Most are never fully on, nor fully off – instead, always partially engaged, thinking about work even when at home, even in bed

Few take frequent breaks, most indulge interruptions even when trying to concentrate on one problem say – most plough on even when dog-tired

Then home time comes – we suffer commuting tedium before flopping on the sofa in front of the telly and watching some dull programme or bad news i.e. fun factor zero

This half-way house is no place to live – work hard, then play hard is a far better work/ play formula – you’ll get much more done that way

Tony Schwartz and Jim Loehr go further in their new book The Power of Full Engagement – they say:

“To get the most out of your working day, go full out for 90 to 120 minutes and then take a break for 15 to 20 minutes”

“And if you try to resist this with the use of caffeine, nicotine, cocaine or amphetamines, toxins and stress hormones will build up in your system and, over time, take a toll on your body – they’re definitely NOT a long term solution”

Dec 27

The ‘Unipart Way’

  • Unipart, the car parts company, founded by John Neill some 30 years ago and a huge success given it now has £1bn revenue and 10,000 employees – this week I was invited by Frank Nigriello, their Director of Corporate Affairs, for what turned out to be a long chat about their approach, the ‘Unipart Way’ and whether it could be improved:

    • Driving up to their Oxford HQ, one is peppered with roadside hoardings announcing ‘Productivity up by 33%’, ‘Waste down by 80%’ and so left in no doubt about what matters there

    • Frank and I then sat in the canteen that all levels of staff use – no separate directors’ dining room, lifts or loos as was often the case in my ‘old days’

    • Apparently, it’s difficult to summarise the Unipart Way as a sequence of discrete steps but my understanding was it’s a mix of:

      • Management communicating company plans to all staff – and highlighting exciting changes en route e.g. a new working environment such as that found at Disneyland

      • Hoshin Kanri – aka policy deployment – a system which translates directors’ aims into meaningful action and improvement projects for levels below – it also seeks feedback from below on possible problems/ barriers and suggestions for even better projects to produce changes needed

      • Less than 20 specific KPIs (Key Performance Indicators) employed overall – for example:

        • Customer satisfaction measures cover customers’ ratings of the price, quality and service levels offered them – as I also recommend

        • However, Frank added an extra heading ‘innovation programme’ saying customers put great emphasis on efforts made there

      • ‘Circles’ of representatives formed for each work area – members are empowered not only to think of lots of ways for continuous improvement (CI), no matter how small, but also implement them – CI is an approach ignored by most in the West yet it offers huge benefits for little cost and risk – go figure!

      • Process mapping helps identify wasteful activities and agree ‘standard methods’ for doing things – at least until even better ways are found

      • LEAN is used to reduce ‘seven’ causes of waste – Toyota had even been over to teach Unipart how to do this well – now, they offer to pass on this knowledge

      • Performance charts per work area displayed on several of the canteen walls showing trends and gaps, plus action planned and taken:

        • All are audited daily by internal staff – and there was no sign they found this ‘a chore’

        • The key is all this performance information is visible to all employees who can then offer their own ideas anytime

      • Frank then reeled off an impressive list of household name clients (e.g. Vodafone) where the Unipart Way had achieved significant hard-nosed results

      • I had originally thought their approach was essentially just another version of CI with a large dose of wishy-washy five year journeys and culture change thrown in

      • Wrong

      •  UW = ∑ (QL + CI) projects = a mix of Quantum Leap + Continuous Improvement projects underpinned by strong employee motivation/ involvement levels 

  • The latest buzzword for the latter is ‘employee engagement’ exemplified on my visit by the following:

    • First, the smiley/ friendly atmosphere that greets you as you walk into the HQ building – after countless client visits, one learns to spot the difference between happy companies and others

    • Then the same in the canteen where girls behind the counter or on the till called Frank ‘Frank’, not ‘Sir’ – and Frank called them by their first names too – no aloof ‘command and control’ here

    • Then Sid happened to walk by us – he was an ex-employee who had retired to South Africa five years ago and was visiting the UK – he just wanted to meet up with his old chums, including Frank, whilst over here – and, again, it was first names only

    • My only quibble was Frank kept banging on about ‘employee engagement’ whilst I dared suggest it depended largely on the quality of leadership over said employees – perhaps modesty forbade any follow-up comment

  • Last, I asked Frank whether any further steps were in hand to improve the Unipart Way

  • ‘Digitalisation’ of all staff i.e. the ongoing teaching of all about potential benefits from use of robotics, 3D printing and AI (Artificial Intelligence) – already, this has produced a suggestion to instal sensors in canteen fridges so staff don’t need to keep checking that temperatures are kept within strict limits and food is not wasted

  • Before I left, and knowing that Frank and Chairman John Neill are keen to help improve UK productivity, I suggested that Unipart sponsor/ conduct an annual UK productivity survey – much like the survey I led in the late 80s in conjunction with the CBI – in the process, they would enjoy splendid publicity for their consultancy arm as well as do something positive for the nation

  • And, if/ when that proved successful, Unipart might consider pushing for a powerful successor to the old UKPC, along the lines followed by Carla O’Dell and her APQC (American Productivity and Quality Center) – a win/ win result for all

Nov 28

How does Germany beat UK at productivity?

Unite, a UK trade union, commissioned a study to establish ‘the most significant reasons for Germany’s high productivity rate’ when compared to the UK

The results were:

Reason 1 – Skills:

  • Germany has a highly skilled workforce, which their government has invested a lot in:

    • More than 80% have received formal vocational training or possess an academic degree

    • Technicians are seen as highly skilled professional workers with a long term future – they’re ‘somebody’

  • The UK has yet to give up-skilling and apprenticeships the money needed to get to where we need to be

Reason 2 – Long term investment:

  • German companies invest for the long term – and employees know this

  • In the UK, most decisions are made for short-term interests

Reason 3 – Minimal off-shoring:

  • German firms are inclined to keep production ‘in-house’ rather than go off-shore to low-cost nations

  • The UK sees outsourcing as an important way to improve performance

Reason 4 – Close working with Unions and workforces:

  • In Germany, Unions and works councils enjoy regular top-level information and consultation – they’re respected and involved in major decision-making

  • In the UK, they’re kept at arms-length – opinions are not sought or often derided, a lingering hangover from the bad old days of the ‘British Disease’ in the 70s

And it’s not just productivity benefits they enjoy – the study found that German workers also work shorter hours and have longer holidays than the Brits

Cautionary notes here, albeit not excuses:

  • It’s no surprise that trade union Unite publicises these findings – they have a vested interest in the German formula – if adopted by the UK, they would get much more power and influence

  • Who says German workers are so much more productive than the Brits – to date, productivity statistics issued by the ONS and OBR are seriously flawed – and only used because there’s no others

 

Nov 23

Government action for big productivity improvements

Words are all very well but good measures leading to worthwhile actions matter most to people and nations

And, to boost national productivity, governments must look to:

  • Boost their private sectors by helping them produce the profits which pay for everyone’s SoL (Standard of Living) and underpin their QoL (Quality of Life)

  • Ensure all public sector service units offer the tax-payers who fund them good VFM (Value for Money)

 PRIVATE SECTOR:

“There’s no magic money tree” said both Prime Minister Theresa May and Home Secretary Amber Rudd i.e. the nation has to cut its cloth to what it can afford

Nevertheless, to boost its private sector, the government must seek to offer it a mix of the following:

  • More generation of new technological ideas, patents and intellectual capital via more incentives for firms to do this aided by more investment in government-owned R&D organisations and university research – plus:

    • More links/ knowledge transfers between them all

    • More commercialisation of new ideas, especially via access to venture capital which does not seek a quick buck

  • More investment in the labour workforce to provide the skills firms need rather than leave individuals to choose what to study without any guidance

  • More encouragement for the private sector to form clusters of firms in specific fields so each firm is close by and either helps or competes with others there, so all rise with a productivity improvement tide

  • More investment in better infrastructure to reduce work delays, improve service levels and increase labour pool sizes for many needy geographical areas

  • More incentives to build more houses, not only to address current shortages but also encourage more workers to move to where they’re needed most

  • Better use of performance measures and BPDBs – Best Practice Data Bases – in all public sector units to identify current waste and inefficiency levels and establish where extra funds clamoured for are truly needed

  • More devolution of power to major cities to let them decide how best to use local tax-take to meet local economic needs

At the same time, they should fund a major HMRC drive to minimise the immoral but legal tax avoidance schemes employed by major behemoths such as Apple or Starbucks who apparently hide enormous profits offshore leaving other businesses at home and the population to fund the public services and supply the demand on which they rely for their gains

Overall, there’s no one silver bullet for government here – politics will determine priorities for each of the above – and all will take time, some maybe decades, to be fully effective

PUBLIC SECTOR ACTION:

As a nation’s private sector grows and becomes more successful, so it also provides more taxes for the government to fund better public services to meet the population’s demand for them – and once one need is satisfied, more and better is wanted across the board

Politicians then have to decide which public services to fund and how much cash to allocate to them given there is no bottomless pit of tax-payers’ money available

They also have to ensure the tax=payer gets good VFM (Value for Money) for each pound of tax he pays – ‘the most bangs for his bucks’ – to maximise the number and quality of public services that can be afforded

But government ministers and civil servants are not productivity experts so they hire others who claim to be so – outside advisers, top management consultants, academics and economists who are at the leading-edge of thinking in how organisations and national economies can become more efficient and grow

And what do ministers get, mostly?

Management-speak, buzz words and gobbledegook before any business commonsense – major projects set up but most end up making major losses and only a few clock small wins

How so?

Ministers and service unit managers nod through project proposals after diagonally reading them – and they don’t want to ask too many questions for fear of looking ignorant in front of their peers – meanwhile, the workers affected soon ‘cut through all the crap’ and become even more disengaged

Public sector productivity thus falls further, managers pleas for money to continue wasting money as before grow ever louder, opposition MPs bang on about incompetent ministers and also shout for more funds given votes for them in doing so

And despite a litany of project failures, especially when employing latest management fads – once it was TQM, now it’s LEAN – the ‘top boys and girls’ keep on peddling them as the panacea for the sectors’ ills

Someday, government ministers will recognise how much they are being conned here by admittedly bright people – indeed, one wonders how the latter don’t dig a little deeper and figure things out for themselves rather than spout their groupthink bulls..t

It’s not leading edge fads, nor rocket science, that’s needed to make a big difference to the productivity levels of each of the public sector services – it’s simply:

  • First, good productivity measures installed at all levels in each service unit which highlight the % waste of costly resources and time, and the % waste of capacity of each process or task team

  • Then process and task teams taking time to study and understand where and how they waste so much – after which, they apply business common sense, not complex mathematics or IT, say, to massively reduce this waste and make better use of existing resources – only then might fads, IT or outside advisers be considered appropriate – usually, they’re not!

Currently, billions upon billions are being wasted by the public sector – ministers are on the back foot and cave in to much of the demand for even more funds – they keep on believing what top advisers tell them to do, and thus waste more and more – they ignore other consultants who have demonstrable success employing their own versions of the above broad approach – “it can’t be as easy as that”

So tax cuts to give a boost to the overall standard of living and economic growth are off their agenda

It’s a national scandal, just waiting to be addressed by some brave public sector minister itching to make his or her mark and climb the Westminster ‘greasy pole’

Nov 22

BoE powerless in UK productivity crisis

Tim Wallace in the Daily Telegraph reports Mark Carney, Governor of the BoE (Bank of England) saying: “Britain’s economy has a new, lower speed limit”

Growth can only get to even modest levels before inflation takes off whereupon “we must ease our foot off the accelerator”

Ben Broadbent, one of Carney’s deputies, claims: “Productivity growth has slowed in just about every advanced economy, but it has been more severe in this country than in others”

Apparently, poor investment and poor productivity growth is “the biggest part of the story” – oh, and Brexit has had an impact too

As we all know, the BoE has just one club in its bag – interest rates – both to drive the economy further or get it out of trouble

For the past decade, extremely low interest rates have been used to prop up demand – it keeps mortgage bills down, encourages savers to spend rather than earn measly returns – and, theoretically, businesses can fund investments more cheaply

But it has failed with business investment

Carney says we had much spare capacity in the past so lack of investment didn’t have much impact on the ‘speed limit’ of the economy

But now, labour supply and capacity is at its limit – production capacity also – so productive investment is certainly needed

One’s left hoping for the best and keeping one’s fingers crossed

After all, what are central bankers paid for?

 

 

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