Current knowledge levels

Many, perhaps most, developed nation companies are brainwork companies nowadays i.e. at least 33% of their employees have degrees or equivalent

Clearly, all top jobs require best brains/ problem solvers – there’s little routine work for them – it’s their ideas, decisions, tactics and plans, actions and people skills that are needed most

But the same logic now applies to the majority of workforces – most jobs require more brain than brawnpower – in addition, they increasingly require an interaction with and use of ICT systems for them to do their jobs well

This means perhaps less than 20% of all jobs require mostly brawnpower – simple instructions must be followed – little knowledge/ skills/ experience and so training or experience is needed

Hence, some 80% of any developed nation’s workforce relies on brainpower and considerable training to do their jobs well

But training in what?

At present all UK kids are forced to go to primary and then secondary schools to learn the same range of basic subjects up to age 15:

  • Many then leave either to earn a living or attend some apprenticeship course – the former usually find employment opportunities and pay levels for the unskilled are meagre, the latter are (currently) limited in choice and made to feel second-rate versus any degree course
  • Most that stay on to their sixth form have to choose between studying arts or sciences, but not both
  • And most that go on to university have to further specialise, their choice of subjects usually made on the basis of what they like and/ or are ‘good at’
  • Throughout this whole process, ‘careers advisers’ might get involved but, in my experience, their inputs are either useless or worse
  • Nor do the kids get any significant nudges from either government or industry when choosing what to study

The end result is UK kids emerge into the world of work having cost a fortune being educated, whatever the level, but not knowing much of what they need to know

Is it any wonder businesses forever complain of a mismatch between skills available to them and those they need?

And that’s not the only problem nowadays – whilst many UK universities are ranked among the best in the world, there has been a huge expansion in their total number – this has led to a dilution of degree standards which is infecting the whole tertiary system viz:

  • Given students are universities’ customers, many choose where to apply (if not a top university) partly based on the likelihood of being marked well – hence most universities now award first or 2.1 degrees to well over 50% of their customers
  • Many lowly-ranked UK universities are struggling to attract sufficient numbers of students – aka income – to cover their costs and so are lowering their entry standards, even greatly increasing unconditional offers to poorly performing applicants, which has obvious knock-on effects later on

The inevitable result is that many employers are now strongly biassed towards graduates from the ‘top ten’ or Russell Group universities – hence a first from a tin-pot university may only lead to a life of shelf stacking

A major sieving of the long tail of UK universities is thus needed, and soon, before too many kids rack up too much student loan debt and have their dreams shattered

What’s needed is a raft of technical apprentice colleges, but call them something grand to stop people looking down on them – as per MIT (Massachusetts Institute of Technology) offering courses up to Bachelor and Master degree level in skills not only business but the general public desperately need i.e. not only engineers and computer scientists but electricians and plumbers:

  • A start has indeed been made with many more apprenticeships on offer
  • However, in most people’s opinion, the very word ‘apprenticeship’ downgrades the value of current courses on offer versus any degree
  • And take-up of these courses has also been disappointing to date

Worst of all, there’s still no clear steerage or incentives from business or government for kids to obtain the skills the nation most needs

And the above ‘training gaps’ only relate to kids at the start of their careers – delve into the training most companies offer their employees after their start and the picture is equally pitiful:

  • Some have formalised induction programmes – most are superficial at best
  • Many view training as a few days junket at the expense of the firm, and no use to anyone afterwards
  • The more senior you are, in the West, the less the training on offer despite the rapid changes ongoing these days

Yet most staff at all levels are usually keen to upskill themselves – and they look to their employers to help them do this – however, many companies don’t recognise that employee training should be good for them too by helping their employees be more productive

Overall, companies should thus take note of surveys that show those with formalised training and workshops have at least twice the income per employee compared to the rest – they also enjoy big increases in productivity and sales whilst reducing stress and attrition

CONCLUSION

At present, there are training pot-holes all over the national road to increased productivity and prosperity – and there seems to be no concerted effort by those in power towards filling them in properly

Aggregation hides info needed

Current measures of productivity become less and less useful the higher the level they go:

  • Aggregation increasingly blurs the performance picture
  • Apples get mixed with pears
  • Specific inputs used for specific outputs and outcomes get lost in the mix

At national level, this aggregation problem is at its worst, compounded by much output and most input being uncounted or uncountable rendering official statistics useless for managing the economy and meaningless for any manager struggling within it

At organisation level, different outputs in the private sector can be counted either separately or together if converted into cash

However, the latter is not possible in the public sector where outputs (of most services) are provided free at the point of delivery and so have no price attached – hence official statisticians employ estimates and assumptions to complete their calculations, thereby introducing considerable errors which further blur the picture

And, in all sectors, costly inputs counted are confined to volumes of labour (hours or FTE numbers being easily measurable) whilst quality of that labour (skill levels, experience, morale), raw materials, SFGs (semi-finished goods), capital investments, IT systems and corporate knowledge are all ignored

The result is most national productivity figures cannot be trusted for an ‘accurate fix’ on the current national position, nor trends being followed, nor relative productivity gaps with other nations

Dare to claim this in public and the only credible defence one hears is: “They’re the best and only measures we have”

One response heard is: “If that is so, then ignore them – better to stick your finger in the air and just hope”

We say: “Surely it is not beyond the wit of man to find a set of measures useful to those on any bridge which helps them avoid rocks ahead, take advantage of wind-shifts and compete with the rest of the fleet”

CONCLUSIONS:

  • Officials should accept that, at the macro level, it’s impossible to measure productivity in any useful way
  • What ministers at national level and managers at organisation level need is first, an alarm bell system to warn of dangers and opportunities ahead – then a framework of measures enabling them to drill down to levels where productivity measures are meaningful and useful
  • Only then, would ‘officers on watch’ have a suite of productivity measures which put them in good control for navigating their ships safely

 

UK productivity gap half-explained?

According to Philip Aldrick, Economics Editor of The Times, Britain’s dismal productivity gap with much of the developed world is due not only to lack of investment, bad management and low interest rates as previously thought

Another significant causal factor has been found

The UK’s ONS – Office for National Statistics – asked the Paris-based OECD – Organisation for Economic Cooperation and Development – to look into the consistency of national data produced by 40 different countries and they found ‘the maths used leads to misleading results’

It turns out there are differences in the adjustment of official figures used to calculate hours worked and employment levels – different countries make different adjustments for their self-employed, overseas workers, prison workers and even drug traffickers and sex workers – and for workers’ tendency to underestimate holiday time taken

For example, France marks down employees’ reported hours by nearly 20%

Hence, comparisons of national labour productivity levels – national output (GDP) divided by national hours worked – end up being ‘apples with pears’ comparisons

If the UK made the same sorts of adjustments, it is estimated their labour productivity would increase by 10%

And actual labour productivity gaps between the UK and France, Germany and the USA would be much smaller than officially thought viz:

     . 16%, not 24%, less than USA

     . 14%, not 22%, less than Germany

     . 11%, not 19%, less than France

So, whilst the finding of these errors does not explain away the apparent productivity gaps between the UK and other developed nations, nor cover the errors that abound when assembling all national productivity data, it does suggest things may not be quite as bad as once thought, at least in the UK 

So let’s leave the last words to Richard Heys, deputy chief economist at the ONS: “This research reveals some striking differences in the way different countries estimate the amount of work taking place – however, they don’t explain why productivity growth has been so stubbornly low for so long”

     . 

Work hard or work well?

Many say the secret for a good life is ‘work hard and play hard’

Leila Hock, in an article for Career Contessa, disagrees – ‘work hard’ apparently “makes my eyes roll a little”

She believes we’ve become too preoccupied with “the grind” and it’s actually bringing us down – “It has a negative effect on productivity”

When people say they’re working hard they mean they’re putting a lot of time in – this mindset is because our economies once hinged on time:

  • Workers ran machines or performed rote tasks, and those machines and tasks would give a pretty static output per hour
  • Occasionally, someone would find a way to increase output per time unit but, usually, more time spent led to more productivity

 

Nowadays, developed economies have transformed into knowledge economies, and they require brainworkers/ thinkers to produce new/ better ideas, decisions and results

The problem is that appropriate performance measures to monitor their progress at work have not been developed – instead, the old familiar industrial-age measures and thinking continue to be used for the new economies

People still tie time to the value of work, not least because measuring time is easy – it’s a number and numbers can be easily compared

Hence, when most managers see someone arriving early at the office, leaving late and responding to emails at all hours of the night, they usually think said employee is committed to her work and trying hard – why would she spend all that time that way otherwise?

What most managers need to do is start measuring the value of employees’ work – and that means truly understanding why they were hired and what they were required to produce – and it’s not just the quantity but the quality of their output that now matters

Few managers do this at present, however, not least because it would take considerable time – and as hours input wins their attention more than productive work, such an exercise is deemed ‘a waste of valuable time’

Consider also the professions that still bill clients solely by their time inputs rather than ways which reflect quantifiable results achieved – and who value their employees by the hours/ days billed regardless of the value obtained by the clients – for example:

  • Lawyers
  • Management consultants
  • Accountants
  • Marketing and PR consultants

 

Leila ends up saying that, instead of such archaic thinking, what’s needed nowadays is a focus on ‘working smarter, not harder’ for the benefit of both customers and employees

Conclusions:

  • Success is no longer determined by hard work and long hours
  • Success comes from using time productively and being effective
  • That requires a focus on what one is trying to accomplish each day and week
  • And, once completed satisfactorily at least, one should relax

All nations need a National Productivity Centre

An article by Lalin Fernandopulle in Sri Lanka’s Sunday Observer, headed ‘Productivity policy vital for economic growth’, promotes the worth of all nations having a National Productivity Organisation 

Sri Lanka is the only APO (Asian Productivity Organisation) member country which does not have an NPO (National Productivity Organisation).

Company director Sunil Wijesinghe says: “Setting up a fully-fledged stand-alone NPO is the way forward for industrial and overall economic growth in Sri Lanka”

He said their National Productivity Secretariat (NPS) is still only a unit under a Ministry while in Singapore and Malaysia they are powerful statutory bodies.

The USA was the most productive nation at the end of the World War 2 – Japan realised Asian countries lagged behind in economic growth and initiated the Asian Productivity Organisation (APO) in 1961 with Asian member countries – Sri Lanka too joined, albeit a few years later

Most other Asian countries had open economies at that time, and developed their productivity programmes fast

For example, the Japanese Government carried out a massive program to inculcate good productivity habits and promote productivity techniques and practices in the 1960s through radio and TV programmes but later it was the private sector that carried it forward through the Japanese Union of Scientists and Engineers (JUSE) and the Japan Productivity Centre for Socio Economic Development (JPC-SED).

At the start of the National Productivity decade in 1996 Sri Lanka started emulating Singapore but later the focus changed.

Singapore claims their productivity programmes have helped economic growth substantially – they had the highest patronage with former Prime Minister Lee Kuan Yew initiating the programme when the annual productivity theme was launched each year – the initial focus of the program was to make government institutions more productive.

A few Sri Lankan enterprises have adopted good productivity practices while others lag. We need a massive re-launch of productivity enhancing programmes in Sri Lanka.

Not only industrial growth but also overall economic growth can be influenced by productivity because productivity improvement techniques can be applied not only in factories but also in offices, plantations, schools, government offices and even homes

Sri Lanka lags behind in industrial growth since economic policies are not consistent – frequent policy changes wreak havoc on the strategies of private companies.

What is needed is for policy makers to prepare a comprehensive medium-term strategic economic plan, in a similar way to strategic corporate plans – Singapore prepared a Strategic Economic Plan in 1990 and stuck to it.

Thereafter we need to communicate it to the people using tried and tested change management programmes so that the population buys in to it.

The ideal would be economic policy stability even with changes of government.

During a productivity study tour to Singapore in the 1980s, and following a briefing at the then Singapore Productivity Board, one of our Sri Lankan colleagues visited the wash room and, having seen a notice there which said “20 dollar fine if you don’t flush”, came back and asked the Director conducting the briefing how they could identify who the culprit is. His response was: “How come only Sri Lankan visitors ask this question? The notice in the toilet is a mere deterrent,” he said.

He said having observed the happenings in Sri Lanka, Singaporeans believe that Sri Lankans are overly legalistic, and this hampers progress.

Today every newspaper, radio and TV channel gives pride of place to (anything other than) coverage of management, productivity, or economics

We should focus on building up our economy and improving the productivity of our enterprises

And setting up a properly resourced NPO would be a good start

N.B. The same void exists in the UK where there is no well resourced/ well-known UKPC – Why?