Five basic steps to big improvement

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 nation

The same five steps also apply to the action required of government ministers for they have a significant role to play – click on the following link

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

Again, 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

Sep 22

‘Accidental managers’ cause low UK productivity?

Alexandra Frean, a business columnist of The Times, claims: “the most accessible solution to Britain’s low-productivity problem is the presence in virtually every workplace of accidental managers” i.e. people who are promoted to positions quite different to past jobs where they did well

She says they cannot be thrown in at the deep end – and they’re not born to manage – so they need good training

Ann Francke, head of the CMI (Chartered Management Institute) reckons up to four out of five bosses in Britain are ‘accidental managers’ and so are not performing to their full ability – worse still, over 70% of employers say they don’t train first-time managers – hence, organisations with good management development programmes perform 23% better than others and their employees are roughly a third more productive (as measured by engagement and retention)

A recent IIP (Investors in People) report suggests £84 billion is wasted in the UK each year through poor people management

The OECD (Organisation for Economic Development) lists improved management and leadership as the outstanding primary factor in tackling the (UK’s) productivity gap

And Andy Haldane, chief economist at the BoE (Bank of England) says there are: “potentially high returns to policies which improve the quality of management within companies”

Hence there’s great excitement over the new chartered management degree apprenticeship just launched which is linked to the government’s apprenticeship levy – they usually take three years to complete with students in full-time employment while learning plus their companies can apply to the apprenticeship levy fund to cover the £9,000 a year in tuition fees for the courses

It’s a new breed of degree-level apprenticeship being created by employers to meet their needs

It also meets national needs for GDP growth and students’ needs for good qualifications at fair prices

At first sight, it seems to be a winner for all

 

 

Sep 22

Trade Unions vote for Brexit

Some Trade Unions are beginning to realise the benefit of being free of the constraints placed upon the UK by the EU

For example, the recent takeover of Opel/ Vauxhall by the French company PSA once would have been judged ‘a disaster’ because of expected closures and job losses:

  • Now, the local Labour MP, Kelvin Hopkins, calls it ‘a positive development’ as long as the UK ends its dependence on importing motor vehicle products and makes them at home instead

  • And John Cooper, a UNITE leader, says: “If PSA want to sell cars in the UK, they’ll have to build cars in the UK” – something that could not be said under the current EU freedom of movement of goods agreement

  • The two expect that car manufacturing will continue in the UK, a home component supply chain will need to be built and more skilled jobs will be created – and none of this would be possible if the UK were to remain in the single market

And the current reliance of some UK sectors on cheap labour from the EU will be disrupted, to the advantage of both those sectors and UK workers

For example, UK agriculture and its relative slow progress to mechanisation:

  • Minette Batters, Deputy President of the National Farmers Union, accepts that such labour reduces the incentive for UK farmers to invest in new equipment/ robots/ automation

  • However, once out of the EU, this labour supply will dry up, UK wage levels rise, UK farmers invest in more machinery, productivity increase, output volumes rise whilst unit costs and so prices fall, sales thus rise and so job numbers rise

  • It’s win win for home farmers and workers

Brexit will thus enable the UK to enjoy a major hike towards its long term aim of being a high-productivity, high-wage, high-skill economy

 

 

Sep 18

The likely impacts of automation?

Doomsayers forecast that robots will fully automate and so steal all our jobs – others say ‘bring them on – the sooner the better’

A report for the World Economic Forum estimates that technology will create about two million jobs worldwide by 2020 – but displace seven million

This is worrying enough for the educated and financially secure according to Tim Worstall, a journalist, but alarming if you are without a job or in low-paid, patchy work

He quotes Paul Krugman, famous Nobel economics laureate: “The average wage in an economy is determined by the average productivity of labour in that economy – if productivity rises, wages rise, and automation increases labour productivity

Hence the barber in Chester earns more than a barber in Calcutta – both are doing the same task using the same gear with the same efficiency but the higher productivity of the alternative uses for UK labour pull up that barber’s wage

Krugman also says that, as automation makes the labour running machines more valuable, so real wage rates rise – and such rises are needed to increase demand for the myriad of things being made by those machines which must be consumed – by people

Others disagree

If two skilled machinists are replaced by an automated machine that only requires one unskilled person to keep it loaded, the alternative jobs available to them might be a shelf-stacker in a supermarket or an Uber driver – so the rise in productivity has not led to a rise in average wages

But others point out that automation is more likely to produce ten times the output of the previous two skilled machinists and so require ten unskilled persons to load up – a cheaper product will then result, so many more units will be sold to a lot more poorer people

That way, skilled weavers were replaced by machines and high quality cloth that only the super-rich could afford became available to everyone – likewise, expensive hand-built motor cars were replaced by much cheaper cars made on mechanised production/ assembly lines, starting with Henry Ford’s ‘Model T’

Demand soared, output soared, unit costs dived, selling prices became a lot cheaper and so affordable – almost everyone, whether a customer or supplier, was happy

As stuff becomes cheaper, whole new sectors can grow

And if unit prices drop relative to wages, the effect is the same as if wages had risen – hence, society becomes wealthier not by people getting higher wages but through goods and services getting cheaper

So, if automation truly takes over, the price of everything may well drop to zero

Everyone will then be able to afford anything with only the most minimal amount of work needed

 

Sep 17

Human needs to be met at work

Much has already been said about hierarchies of human needs which need to be met if workers are to be motivated

However, a recent study of 12,000 white collar workers by Tony Schwartz, CEO of ‘The Energy Project’ and Professor Christine Porath of Georgetown University is well worth noting

They claim that employees have four core needs:

  1. Physical needs – People are most productive and satisfied at work when they feel supported, rewarded and aligned with the work they’re doing and are encouraged to take frequent breaks to recharge

  2. Emotional needs – People need to be valued and appreciated by their bosses and team-mates for their contributions – to feel cared for and supported, especially by their immediate boss – to feel they’re contributing not just to the bottom line but to their customers’ lives and the world at large

  3. Mental needs – Managers should stay close to all in their team, especially in times of stress, offering a shoulder to lean on, not back-stabbing – then, team members can cope with just about anything – they can prioritise, focus on one task at a time and not be constantly side-tracked – they can define when and where they get their work done

  4. Spiritual/ social needs – Support from above is also vital – empowered managers need the ability to get the support to do what needs doing – it makes work so much more enjoyable and long hours become no problem

The more the above needs are met, the more loyalty, job satisfaction and energy from a team, and the lower their stress levels

Meet one of the above and performance will improve – meet more and the more the impact (although how much more is not clear)

Nevertheless, if you ask a manager: “If your employees work so much better when these needs are met, how much do you invest in meeting them?” be prepared for the uncomfortable silence that usually follows

Sep 16

AI will transform the future

In the early 19th century, most of the world’s population was employed on manual, back-breaking agricultural work – then automation increased the productivity of farmers more than tenfold whilst reducing their numbers from being the majority of the workforce to less than 2% – and the many outplaced moved on to new, better-paid jobs in the manufacturing sector

In the 20th century, automation increased the productivity of those manufacturing workers whilst reducing their number to less than 15% so that, today, knowledge-based and service industries employ over 80% of G7 workforces

Now, in the 21st century, automation in the form of Artificial Intelligence (AI) is beginning to transform the way we work and live, especially in the way we produce both goods and services

According to James Walker, a researcher at the CPS – Centre for Policy Studies in Western Australia – “AI uses algorithms that learn from raw perceptual data in a process loosely comparable to that of a human infant” – except they have vastly more storage capacity

Robots are increasingly performing more of the functions we workers did up until only a few years ago viz:

  • Replace human jobs – manual repetitive jobs, administration work, transport driving, process controlling using sensors

  • Augment human jobs – advisory support, search and selection of information, voice and text translation

  • Create new human jobs – higher reasoning, critical thinking, complex problem-solving – knowledge learning, creative design, new health and lifestyles services – algorithm data scientists, robotics engineers

  • Conduct new tasks humans cannot do – data analysis for advanced insights – e.g. cures for diseases – working at incredible speeds and levels of precision with vast volumes of data that are well beyond human capabilities

Clearly, as Viktor Shvets, Global Equity Strategist at Macquarie Group, Australia, points out: “There’s a declining return on humans because of the inferior capacity of humans to achieve productivity growth compared to machines”

McKinsey believe 5% of current occupations could be automated entirely and some 60% have at least 30% of their activities automated – and these %’s will only rise over time

The Economist goes further: “As machines become better at doing things, the human role in generating faster productivity growth will converge towards zero – at that point, so long as society expects everyone to work, all spending in the economy will go towards services for which it is crucial that productivity does NOT grow, in order to provide jobs for everyone – society could seemingly be both characterised by technological abundance and paralysed by (Baumol’s) cost disease”

But why be so dismal when AI can remove so much drudgery from our working lives?

Some optimists, like technologist Nick Bostrom, even believe AI is: “The last invention the human race will ever need”

These are early AI days, however – questions still being asked include:

  • How can we make sure robots’ only purpose would be to serve humans and our environment and make human lives better?

  • Should robots decide on their own without approval from humans?

  • Should we allow robots to fight autonomously in future wars?

  • What will most humans do if most of their work is done by robots – be idle or creative? – write, paint or compose better? – create new things, go to new places and/ or make the environment cleaner? – enjoy more time in leisure and recreation?

  • In particular, what will the many uncreative, lounge lizards do given having so much more free time will be a big challenge not only for them but society as a whole?

In addition, some serious players have already offered serious words of caution about the future role of AI which will have to be addressed, somehow:

  • Elon Musk, the US billionaire, developer of PayPal, owner of Tesla electric cars and founder of the Space X interplanetary rocket company says: “We need to colonise Mars so we’ll have a bolt-hole if AI goes rogue and turns on humanity – AI scientists may have perfectly good intentions but still produce something evil by accident, capable of destroying mankind”

  • Professor Stephen Hawking says: “The development of full AI, which can match or surpass humans, could spell the end of the human race – it would take off on its own, and re-design itself at an ever-increasing rate

Overall, however, the productivity gains when most human work is done by AI will be enormous – its potential is unlimited, and unstoppable

Tasks we humans would not do, except for money, will be mostly automated – tasks we already like to do, for no money, will come to dominate our lives

The future is bright indeed

 

Sep 15

The coming productivity boom

Why is the American economy not as productive as it used to be?

Why is US GDP growth below 2% per annum, well short of the 3.5% it averaged before the Great Recession of 2008?

Bret Swanson, President of Entropy Economics, and Michael Mandel, an economist, believe ‘the long productivity drought is almost over, as the information revolution will transform traditional physical industries’

Current pessimism has it that innovation is over and IT is not being applied well in the whole economy the way electrification was 100 years ago – so we should lower our growth expectations for the next decade or so

Instead, Swanson believes we are on the verge of a new productivity boom because there are many industries (sectors) that have not, so far, shown fast productivity growth comparable to digital industries – and when they do start applying new technology in innovative ways, overall economic growth could easily rise to some 3% per year

So what’s stopping them?

When computers and then the internet came along, their most obvious applications were in information based industries – new, media, finance – all industries which have been transformed over the last 20-30 years

Such industries also provided ‘a platform to unleash unpredictable explosions of further entrepreneurial activity e.g. the web for entrepreneurship and the iPhone for apps’

That leaves huge potential in other industries such as manufacturing, transportation, healthcare, education and energy – they have yet to figure out how best to apply much of what IT offers in innovative ways – but they are also much more highly regulated than the tech world which operates with a relatively free hand

Hence we see lower rates of investment and less disruptive innovation from upstarts in those sectors simply because they’re either not able to or the cost is higher

But such hurdles will inevitably be overcome, and sooner rather than later

 

Sep 14

Robots to transform education

An article in The Times reported that Anthony Seldon, former headmaster of Wellington College, UK, believes: “The imminent arrival of robot teachers will herald the greatest revolution in education”

“Personalised learning, facilitated by artificial intelligence, will mean that every student from Eton to the most deprived school in Blackpool, will receive education of a standard higher than available today”

Robots will be able to learn students’ individual learning styles, preferences, motivations, quirks and difficulties – and then tailor courses to their precise needs and speed of learning

Each pupil will be able to work at their own pace, not at the rate of the slowest member of the class

At present “we have a factory model of education whereby everyone arrives at the same time of day and moves up by ages, when it is transparently clear that a 13-year-old might be at the level of a 10-year -old in French and a 17-year-old in maths – but they sit in classes, with the teacher at best giving a 30th (?) of their attention”

By contrast, and in the near future, the electronic virtual teacher will follow a pupil all the way through school and higher education

However, Seldon thinks there will still be an important role for teachers

“They will no longer need to stand up at the front, nor mark work or prepare lessons”

“They will be organisers, structurers and discipliners instead”

Sep 04

Future lives of leisure, not work?

Raphael Hogarth asks in The Times:

  • What if AI does destroy most if not all jobs?

  • What if the economy fails to create  a load of new jobs that ordinary folk can do?

Elon Musk, the billionaire owner of electric, some self-driving, Tesla cars, warns that: “AI poses a vastly bigger threat than North Korea”

His solution is to redistribute all wealth created via a UBI – Universal Basic Income – it’s now ‘inevitable’ – the state will tax technology and handout the spoils to all citizens so all have enough money to be comfortable

But what of the social impact?

What about personal fulfilment?

Will we be happy as a society of benefit claimants, doing nothing for ever and ever?

Will it be enough just to fill the vacuum with leisure?

John Maynard Keynes, prompted by the mass ‘nervous breakdown’ he saw afflicting the idle rich back in the 30s, resolved that “a life of leisure would instead offer the chance of great flourishing to those who can keep alive, and cultivate into a fuller perfection, the art of life itself”

In other words, ‘the idler of tomorrow will nourish personal relationships with shared experiences and passions’ – for example, learn to play the piano, discover the wealth of literature, appreciate art, acquire knowledge

Ergo, a Keynesian utopia, a life he called a ‘passionate state of contemplation and communion’

But will such a life suit everyone?

In a society where people work, we all have a source of worth – the market values our labour – strip that away and only the cruellest meritocracy is left

Studies show that, overall, the unemployed are far less happy than those with a job – and note that most lottery winners keep working after their success

Much of any happiness we enjoy is derived from ‘our level of earned career success’

So the life of leisure we seem destined for may not be what we want after all

 

Sep 03

Unconventional meetings

Paul Sullivan of the New York Times, writing in The (Central Oregon) Bulletin, reveals surprising examples of new activities to increase productivity and retain employees

Eric Tetuan runs an event and production company called ProductionGlue based in Midtown Manhattan, New York

A few years ago, he saw staff morale was sinking and mistakes rising so he forced them to take walks, ride bikes or just sit by the Hudson River – not for solitary moments to recharge but to accompany colleagues to discuss work outside the office and so increase creativity

“There are a lot of distractions when in the office or a conference room – workers focus half on others and half on their devices – on a walk, we spur more ideas”

Think of Google rewarding employees with massages or Spotify’s lunchtime concerts – unconventional approaches to improve employees’ focus

According to Fractl, a Florida advertising agency, employees seek certain traditional benefits when job-hunting like health care, flexible hours and vacation time

However, Technology Advice, a Nashville marketing agency, say more elaborate perks like games rooms and gym membership are needed to retain workers

Professor Jennifer Chatman from the Haas School of Business at Berkeley says: “Above some level of financial security, people care about being part of a community and belonging at work – these kind of perks bring people together and make work more fun – in this way, they effectively increase motivation and performance”

And meetings outside can not only spur creativity, they can also help end impasses

Larry Newman, COO of Health Media Network, a health education company, credits surfing (sea waves) with helping him close several deals including the sale of his first company

“We had spent countless hours in meetings and with lawyers – I suggested we do this face-to-face – in between rides, we sat there in the water on our boards and talked about the final points – you’re negotiating to a human level, not a business level – it excites people”

So, find fresh places to hash out ideas – ‘they may sound fun and relaxing but they can also be productive’

Sep 03

Remote working

A Northern Ireland finance firm, AKFP Group, closed its HQ for a full month in July for 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 the 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 a 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”

Hence, the firm is planning to roll out the one-month initiative again next year

 

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