Business Productivity is a subject that crops up for many of my clients. Productivity in the UK has been a hot topic for the last few years in business and political circles. At the start of the recession in 2008 the productivity levels in the UK dropped and since then have struggled to pick up.
When our nation’s productivity struggles to improve, it means we are less competitive across the world and our real national earnings (and personal earnings) fall. The Institute for Fiscal Studies has written much about this problem – The last paragraph of the IFS article says:
“Much has been written about the various explanations for the lack of productivity growth, which include low investment in new capital, an impaired allocation of resources, higher employment as a result of weak wages and possibly some measurement error. When the Chancellor sets out his productivity plan, the focus is likely to be on those areas of public policy that we can be confident matter for productivity, such as investment in skills, science and infrastructure. Such investments could provide a welcome boost to productivity in the medium term but are unlikely to provide immediate fixes for current productivity. Finding ways to boost productivity today will be much harder.”
I would never claim to understand all the economic theories and analysis these research bodies can produce, but the last sentence says it all for me….
Boosting productivity can be hard!
Yet my message to owners of SMEs, the power house of the UK economy, is that business productivity can be improved when business owners focus on using the power of the workforce they already have.
When I work with clients who have not carried out any efficiency or improvement projects I expect profit improvements of 10-20% to be produced – there can be hidden profits in the business despite years of cost cutting and asking people to be more flexible.
I regularly talk about 4 key disciplines needed in a business: Clarity, Focus, Discipline and Engagement (see my on-line 4 Disciplines check). Within those 4 disciplines are practical approaches to improving business productivity that uses the knowledge and input of the workforce.
For more ideas and to assess how well your business applies the 4 disciplines…take the test!