Doug Baird, CEO of people advisory firm New Street Consulting Group who helps you find, assess, build and accelerate teams and leaders.
Widespread strike action and low energy consumption offset growth areas such as construction, according to the March 2023 data from the Office for National Statistics (ONS). The Office for Budget Responsibility (OBR) has said the U.K. will avoid recession in 2023. Despite predictions, however, the economy is still expected to shrink overall this year by about 0.2%, which is flatlining, at best.
Of course, economies are cyclical, and we expect highs and lows. It’s typical for productivity to fall during downturns, as we saw after the financial crisis of 2008. This situation, though, is much more complex. Productivity growth has remained slow in the U.K. during the past decade, and output per hour has underperformed G7 peers for long periods. This has become known as the productivity puzzle and is a challenge leaders and policymakers are all trying to address. So, what can business leaders do to solve this puzzle?
Look to talent as well as tech.
Such of the conversation around productivity is focused on technology, systems and processes, and there’s obviously a case for investing in these areas to save time and measure more. But what about the untapped human capital investment you already have in your organization?
If you want to unlock productivity, create an environment where employees have the mandate to think creatively about solving a problem or completing a task. Rather than keeping productivity as a boardroom agenda point, consider what potential you haven’t yet tapped into from those who are often closer to the details of how improvements can be made day-to-day. Ask them what could be changed about individuals’ roles or if there are shortcuts and efficiencies they’ve uncovered in some areas of the business that could be rolled out. Allowing your team to do more of what they are good at and engaging them in the journey can enhance engagement and, in turn, boost productivity.
Systems, AI and tech all have a role in driving optimization—but so, too, do the people who sit behind all of this. And it’s the role of leaders and managers to find ways to unleash that potential by training, developing and empowering their people to do so.
Work smarter, not harder.
The productivity puzzle almost sounds quaint, but it is a stark and potentially fatal issue facing the future health of U.K. plc. At a company level, the instinct can be to increase productivity by adding hours or targets for employees, but in my experience, this approach is unlikely to lead to a sustainable impact.
Since the onset of the pandemic, working patterns and practices have transformed beyond recognition, but we are still grappling with finding the best balance for individuals and organizations and what it really means for productivity. It feels like the emergence of a new social contract between employees and employers post-pandemic, in which workers are demanding a better balance but the trade-off is a happier, more engaged workforce.
Nurturing flexibility and reframing the terms of engagement make good business sense, but what success looks like will vary from business to business. Focus on uncovering what works best for your workforce and productivity; it shouldn’t just mirror what you’ve seen work elsewhere.
A similar situation emerged after the Second World War, when the United Auto Workers union agreed with General Motors (subscription required) to allow management to set business strategy and establish workplace rules in return for making lifelong pensions and greater healthcare benefits a permanent part of labor contracts. This redefinition of the worker-employee relationship is credited with an increase in growth and productivity in the post-war era, so it makes sense that leaders need to be open to this scale of change again.
Sometimes, looking backward can enable you to plan ahead more effectively. What seemed like radical thinking at the time may help to reveal the level of change that is really possible.
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