Productivity

Introduction

  • Productivity improvement has become a complex subject embracing most management disciplines, made even more complex by its measurement becoming more difficult as economies develop and services come to dominate

  • The upside of widespread productivity improvement is a vast increase in national economic growth rates and standards of living – mostly achieved by reducing unit costs of goods and services enabling many more people to afford them

  • Demand then increases and company profits improve enabling increases in pay levels which generate even more demand plus more tax-take for governments to provide more and better public services

  • The downside can be job losses for some but, to date, productivity improvement has led to a net increase in jobs plus whole new sectors created – and most people outplaced are able to find other jobs, often better paid and more fulfilling

  • With such benefits, ‘how to improve productivity’ has become the most important issue facing any manager or government minister in peace-time – at least in ‘non-pandemic times’

  • Hence, one would expect there to be thousands of books, seminars, conferences, specialist courses, website pages and apps focussed on productivity improvement – plus directors and consultants specialising in the subject

  • Surprisingly, there are very few

  • Indeed, productivity is ‘off the radar’ for most managers at all levels – everybody is said to be responsible for it, so nobody is – in effect, they’re ‘flying blind’ – unforeseen events top their priority lists, daily firefighting is their norm, productivity improvement is not even on their agendas

  • Hence most organisations in most sectors, public and private, operate well below their potential – not 1 or 2% below but at least 20%

  • The great majority could offer much more and better, many with fewer resources and so at much less cost

  • Hence, the overall aim of this website and our trilogy of productivity books is:

                                           ‘To help managers improve lives’

 

Definitions

There are blizzards of performance measures available to managers, government ministers, academics and economists – but only a few are the most useful for addressing the biggest peacetime issue facing all nations:         HOW TO IMPROVE PRODUCTIVITY AND SO IMPROVE LIVES _______________________________________________________________ PRODUCTIVITY The standard definition is:     Productivity  =  Net …

Why important for individuals

Productivity improvement has not only increased incomes but also released more discretionary income to buy non-basic stuff – goods and services that people ‘like to have’ on top of those they ‘must have’ The result is G7 office workers and carpenters, teachers and taxi drivers, all earn on average so much more than they do …

Why important for organisations

Private sector manufacturing and logistics, in particular, has had spectacular success in reducing unit costs and so unit prices of most household items whilst, at the same time, greatly improving the variety, quality and service levels offered: Compare cars, white goods, air travel, foreign holidays, staple food or table wine versus 50 years ago Watch …

Why important for nations

National productivity is the single most important factor determining an economy’s health – nothing matters more for long-term living standards than improvements in the efficiency and effectiveness with which an economy employs and combines its capital and labour And national productivity growth is the only sustainable source of improvement in the standard of living – …

What scope to improve?

In G7 nations, the evidence suggests there are many more organisations performing below rather than above the median Not only that: 80% never seek to improve by much at all Most of the other 20% only target the next performance level up and, once that is achieved, elect to do little more The fact is …

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