Mark Carney revealed that the Bank of England is cutting its growth forecasts, and poor productivity is a key factor.
Here are our ten suggestions for turning it around.
Yesterday Mark Carney, governor of the Bank of England, downgraded the UK’s growth forecast and laid a significant portion of the blame on poor productivity performance. He said that productivity has taken much longer to recover than expected.
“We have been successively disappointed with the productivity performance of the UK,” Mr Carney told the BBC.
“For the economy to move forward, it’s going to be a story of increased productivity.”
After 25 years of helping companies to improve productivity I can think of ten simple things firms can do to improve efficiency and the effectiveness of their businesses. To me, it’s relatively simple to make a productivity improvement.
So, what do you need to do?
Ensure that all senior managers know how to improve productivity
Sounds obvious but we work with clients all the time where the senior team do not understand how to be more effective or how to better utilise their resources.
Ensure you have a plan in place to improve productivity
Ask yourself or your senior management team what plans they have to make improvements. If it’s not a solid plan, you will not see solid results. You need to put in place a programme that will ensure productivity improvements happen.
Engage your staff
Teach your workforce about the damage waste and variation causes to a business (and their enjoyment of their job), and get them engaged in eliminating it.
Ensure that everyone understands some simple improvement concepts
- The difference between activities that add value, and those that do not
- The importance of having a best practice approach, and sticking to it
- How to identify waste (non-value added activities) – such as looking for parts, waiting for information or doing things twice
- And what to do when they find them!
Fix the right problems
Put in place a robust process to identify the root causes of non-value added steps and how to eliminate them
Get the information you need
Make sure that every decision you make is based on accurate data that can prove a problem or the value of a solution
Prioritise productivity improvements
Prioritise the problems which will have the biggest impact on the customer and improving productivity. Don’t work on pet projects, don’t sweep things under the carpet, don’t work in silos and don’t work on the easy things
Allow people time to analyse a problem and implement a robust solution
If you pick the right project, give people the tools and knowledge to solve the problem and give them the time to speak with data, do the analysis and implement great solutions you will generate huge benefits
Measure the right things
Make sure that all staff, but managers in particular, have Key Performance Measures which are about productivity or Business Improvement no matter which function they work in. Every single part of a company can become more productive from accounts to legal, from logistics to purchasing
If you’ve implemented relevant KPIs, you’ll only give rewards or promotion to people who actually improve productivity. Everyone in a business should have two sets of goals: Their function goals and making the business more productive. You should reward those who meet both
These ten simple steps will make any company more productive. They are easy to implement and just require focus from senior managers. We have helped countless companies to be more productive using simple techniques, essential training and effective motivation.
Talk to us about how we can help make your business more productive so that the country – and Mark Carney – can see growth, prosperity and security.