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Author:
Jean Bertrand de Lartigue -
Chairman of HR specialist HR2all LTD

 

Britain may have the fourth largest economy in the world, but in Europe alone we stand a lowly 11th in terms of productivity. Why? Management expert and Cardiff Business School lecturer Jean-Bertrand de Lartigue says it is largely due to the fact that there are still too many business dinosaurs roaming the land.

But, he argues, it is in every MD's hands to raise each employee's productivity by up to £18,000 a year.

Why is it that Britain performs so poorly in productivity? The answer could be summed up by one word: investment. A glance at some other important league tables show that we start this process early on by “under investing” in education - our children are well off the top when it comes to performance at key subjects, and arguably education is the nation¹s investment in its future.

Britain fares poorly when it comes to capital investment too - the injection of money by businesses in order to modernise their equipment and reduce their production costs.

But I would argue that the biggest single reason why so many British companies find it hard to compete with their overseas rivals in so many spheres of business and public services is a chronic under investment in their single biggest asset: the people that work for them.

Rather than upset any particular business sector, I¹ll pick on the poor old NHS for an example. If a hospital trust spent £250,000 on a new piece of equipment they would go to a lot of trouble to look after that asset: they would probably put it in a specially air conditioned room so that it doesn¹t overheat; they would clean and maintain it regularly, and ensure that it was not overused.

£250,000, coincidentally, is the average amount of money it takes to train a doctor. Go onto any ward in any hospital and you will see how that very expensively acquired asset is treated. It works far too many hours under very difficult working conditions - leaving it tired and demotivated. Is it surprising that sometimes this very important asset doesn't perform to the very highest standards and makes mistakes, or has to take extended leave to recover from stress or overwork?

And yet people are the one asset of a company that - treated correctly - can actually appreciate in value, compared to equipment which will inevitably depreciate over time. A company that recognises this potential will not only make sure their 'asset' is looked after so it performs well; it will train and upskill that person so it can perform even more valuable tasks.

The business dinosaurs still, sadly, to be found in every corner of this country fail to recognise this potential; and they - as well as their staff - are losing out as a result. In fact companies that I have worked with, and have taken steps to modernise their approach, have typically seen a rise in productivity across the board equivalent to an extra £10,000 of profit for every person they employ. Even businesses that I would describe as 'old fashioned' in their approach rather than downright prehistoric, see rises in productivity worth around £4,000 per person.

Armed with those figures, I would ask every company MD or FD reading this to take out their calculators and work out for themselves what they could be adding to the bottom line of their company.

So what is this 'magic solution' which can make productivity rocket? First of all, I divide every business into one of four categories. How far a company has to travel - from the worst to the best run - will decide how much they save.

A real ³dinosaur² company has a ³dependent² structure, where the boss sets out the business plan (if he has one) but doesn¹t involve anyone else in his thinking. Staff don¹t make independent decisions because they are fearful of getting it wrong. They turn up to work, do what they are told and take home their pay. There is no scope for initiative, or for them to suggest better ways of doing a particular job. No problem can be resolved until the boss steps in and tells them what to do. The staff are bored, demotivated and unproductive. The business stands still.

That dinosaur company could be radically improved by involving staff in more of the strategic thinking of the company - letting them in on the company¹s plans, aims and visions, and by encouraging them to take the initiative where needed. This way, they will contribute more by feeling they can find their own ways through problems, they are more motivated and bring more to their work each day. This is now an 'independent' structure, and this company¹s productivity rises substantially.

But there is far more that can be done. Many businesses now near the top of the productivity tables in Europe are what I would call ³interdependent². Much of the work of a company is divided into projects, and teams of people are allocated to drive each project through, chosen for their blend of skills.

Each team has leadership and direction from the top, but it also calls upon people to raise their individual input through a desire to do well for the team - just as you find many 400 metre runners doing their personal best times in relay races. People are motivated because they feel their skills are valued, and there is also scope in these teams to learn how other disciplines operate - adding to their individual skills set.

Modern, efficient companies like this do away with outdated ideas like job descriptions for their staff and bring in 'job design' - a concept that builds a company¹s future round the people it has, not just the other way around. The impact this simple approach has on keeping your best people is staggering.

Losing a high calibre person can set a company back a long way. It represents a huge drain on profitability as you seek to replace that person, train them up and get them working to maximum effect.

Gone are the days when people felt they were with a company for life - each side fulfilling their part of a bargain. Today, understandably, most people work for themselves. But you can earn loyalty by providing a person with a job that they find enjoyable and motivating... and where they believe they are learning and advancing as people. Client and customer relationships blossom in this environment, and it¹s a short step from a satisfied and loyal customer recommending you to others and becoming your best sales person.

And that brings me onto the best and most profitable companies of all: businesses that REALLY take investment in the future seriously by continuously developing and training their staff to do bigger, better and more valuable jobs - and to cope easily with the rapidly changing market conditions that now affect every sector in the economy.

A few more of those businesses, and perhaps the extinction of the dinosaurs will finally be in sight!