How do you think your business is doing in terms of productivity? Do you really, even, know?
Hard to measure, at times, perhaps, but your productivity may be key to survival and growth.
It may also set you apart from your competition – as UK businesses, generally, are suffering a long-drawn out productivity slump.
Did you know that productivity has suffered a serious slump over recent times? A slump small businesses can’t afford.
Here’s a good quote from the piece. It’s from economist and Nobel Prize winner, Paul Krugman:
While ‘productivity isn’t everything, in the long run,’ he says, ‘it is almost everything’.
So how is productivity looking for your enterprise?
Entitled ‘Why solving productivity is crucial for growing firms’, The Telegraph piece highlights ‘the troubling disappearance of productivity growth in the UK since 2008’s financial crisis, which has left the country trailing its neighbours’.
It quotes the Bank of England’s Chief Economist, Andy Haldane. ‘Productivity is a gift for rising living standards; perhaps the greatest gift’, he says.
‘It is not, however, one that always keeps on giving, as recent events attest.’
So what’s gone wrong? How have British firms lost their way in keeping up productivity levels? And is yours among them?
What’s described as a ‘persistent sluggishness has been blamed by economists on low interest rates artificially supporting weak companies,’ says The Telegraph, ‘a boom in relatively unproductive jobs, an under-reporting of burgeoning online activity, and reluctance among entrepreneurs to invest.’
It’s been coined the ‘productivity puzzle’, and ‘has confounded the boom-and-bust cycle that turned previous recessions into rebounding growth’.
So what really lies behind the conundrum? And is it a ‘puzzle’ that speaks to your personal business experience?
Productivity can be hard to pin down at the best of times, and it ‘doesn’t always align itself with profits’, says the piece.
Lots of small businesses aren’t even sure whether their productivity is up or down, suggests a recent study from the University of Gloucestershire.
One initiative designed to tackle some of this emerged from a Government-backed review led by John Lewis Chairman Sir Charlie Mayfield.
This suggested pairing more and less productive enterprises so they could compare and contrast approaches.
‘Be the Business (BtB), an organisation set up following the Mayfield review,’ says The Telegraph, ‘is attempting to bring the topic of productivity out of economists’ reading rooms and into the front rooms and boardrooms where small businesses are run’.
The idea is to compare yourselves ‘with peers on productivity measures such as digital maturity, talent management, leadership and planning, as well as offering training and links to bosses in the same boats.’
See what you think.
Changes don’t always need to be – indeed, often won’t be – dramatic.
Currently, 34 businesses are going through a 12-month training programme with BtB, with support from Lancaster University, says The Telegraph.
Chris Blade is Managing Director of one – Cumbria Crystal – and he reports on his experience thus far.
‘I’ve brought about a range of small incremental improvements within the company’, he says: ‘engaging staff, getting them to look at working differently, bringing about small 1pc changes – things that we can do quite reasonably within the company.’
‘Collectively they add up.’
In the first 6 months of this year, he reports, company turnover has increased by 41 per cent, compared with the same period the year before.
‘Once companies have pinpointed areas for improvement, there are countless ways to make incremental gains in productivity’, says the piece, ‘– not all of which involve big spending on new staff or kit.’
Here are a few of the kinds of small, incremental changes businesses might make, touched on by The Telegraph article:
• New managers
• Walking meetings
• Office plants (as the piece says, some are ‘more offbeat ideas’)
• Implementation of chat tools such as Slack
• Flexible ‘or pared-back working patterns to try to push staff into more efficient workdays’
It cites a couple of case-study examples – and is well worth a read in full.
But really the message is this: think hard about your business productivity. Look around at how others work. Make small changes.
Buck this trend, and see the difference.