One of the most provoking sessions at ATD ICE was the Conference Board's presentation on their research into productivity. As shown in the above chart, productivity around the world in terms of outputs has decreased substantially since the GFC. That applies particularly to the Euro area (Brexit anyone?).
But the Conference Board then split this into labour productivity and numbers of workers / worker hours, and labour productivity down again into increases in contribution of capital, contribution of human capital and the increase in overall efficiency of production, or total factor productivity ie everything that helps people contribute more effectively.
It's TFP which provides the greatest opportunity to improve overall outputs and means that there's a range of factors which could support this, including better leadership and line management, innovation and the use of technology.
Ie it is not that workers per se are losing productivity momentum, but that there's a lack of tools, methods and skills that would make them more productive. Or that management and skills are adapting too slowly to the requirement of new technology, innovation and business model.
There seems to be a particularly issue around this in the UK in the use of digital:
The Conference Board suggesting improving this will need to include:
- Realising that innovation isn’t free - investment in intangible assets require alignment of business objectives, organisational capabilities and long-term strategy
- Understand that the workforce matters most - not working harder, but working smarter; continued skill improvement is critical; employee engagement is positively correlated to productivity
- Systematic management practices lead productivity - clear target setting, performance tracking, and rewards will be needed for high performance support productivity growth.
I'd add on collaboration - it's about creating organisations which actually act as organisations rather than just groups of individuals going about their own jobs relatively independently, or often in fact getting in each others' way.
- Consulting Research Speaking Training Writing
- Strategy - Talent - Engagement - Change and OD
- Contact me to create more value for your business
- jon [dot] ingham [at] strategic [dash] hcm [dot] com