The Pursuit of Productivity

According to a recent ONS (Office for National Statistics) announcement, UK productivity has fallen below where it was in the last quarter of 2007 – the period before ‘the economy nosedived into recession’. 

The reality is that increases in productivity are only possible when three things come together

  • Technology
  • Business process efficiencies
  • A culture of entrepreneurism and enterprise.

Technology in this context is not about ground-breaking innovations, or the promise of 5-6-or-even 7G, but rather progress made at the point of delivery – i.e. parity between every home, home-office and small regional business space with the inner-city business communities – which are well served.

Directors, leaders and boards who are better educated (not just academically), smarter and more open to ideas will drive the evolution of business processes and practices. The importance of the internet and contemporary media cannot be undervalued in this process and there are of course the armies of consultants who are the catalysts for evolution. The trick is to separate the snake oil salesmen, from those who have the skills, expertise and sensitivity (to each organisation’s unique mix of strengths, weaknesses, culture and business models) to effect change.

In my job I meet, talk to and listen to businesses which are either growing, shrinking or changing and I constantly see a deep vein of evolution, adaptation and a desire to drive change to meet the uncertainties of a post-Brexit world.

Just look at how employees and suppliers of labour have adapted to a recession ravaged economy – from zero-hour contracts, to co-working with like-minded peers and office sharing.

Employers have adapted to the needs of their workforce, under the mantra of ‘attracting and retaining talent’ – from the modest offer of free fruit, to Google with its Kings Cross office sporting a Platform 9¾ theme and the corridors of its London Victoria office looking like something out of Starship Enterprise (I am told). Forget on-site gyms, that is so yesterday: think climbing walls, games rooms and Smeg type doors opening to Narnia-like chill rooms. What about the companies offering free/subsidized meals, cooked by quasi-Michelin starred chefs?

Landlords have also had to work harder. We got used to disappearing executive offices to accommodate more workers in less space – as well as today’s egalitarian culture. The in-vogue business lounge offering free Wi-Fi and cosy meeting pods is now the ‘must have’ for landlords to include in their common parts and entrance receptions.

So what has the changing face of business space got to do with our ailing national productivity?

Well, according to the Stoddart Review an effective workplace can improve business productivity by as much as 3.5% - and the eminent economist Duncan Weldon, believes that could add up to £70 billion to the UK economy.

Underpinning the fact that productivity is fast becoming the ‘plat de jour’, “… a group of business leaders …” (their own words) have just launched an organisation entitled Be The Business – “ … a movement which will enable businesses to improve their own operational processes and commercial excellence through benchmarking, collaboration, better leadership and talent management.”

Now I’m no ‘business leader’ but ask anyone who has ever moved office, warehouse or business space and they will tell you that within six months of moving, they will have seen a notable and measurable change in staff engagement and productivity.

It is interesting to note that almost 60 years ago a group of behavioural scientists discovered the Hawthorn Effect – any change in working conditions (even simple changes such as turning the lights up or turning the lights down) increased productivity and reduced absenteeism. The researchers concluded that it was not the changes in working conditions which impacted productivity, but the fact that someone was interested in the workforce which was the catalyst for increased productivity.

Perhaps therefore it is the combination of a more attentive management team and better workplace conditions which is the secret to our national productivity dilemma.


David Laws
David Laws 17 July 2017

Related pages

Can we help?