Do the measures matter?

I have been doing a little work recently in relation to productivity and performance measures.  The thought struck me after trying to construct appropriate measures for a particular organisation in a particular situation that the measures we use are not as important as the fact that we use measures to track progress against strategy and ensure we remain ‘on mission’.

Of course the measures must demonstrate progress in the right direction for our key success factors – but remember the Pareto effect – we can probably get 80% of the effectiveness of a measurement regime with 20% of the effort.

i am not advocating ‘abdication’ – just careful use of resources and broad targeting rather than surgical precision.  Get people moving against plans – in broadly the right directions and with some momentum and motivation – and the detailed results will look after themselves.

Communicate

I was looking at a PowerPoint presentation the other day (not one of mine) and I thought “What a great job this person has done of making a complex issue understandable.”   

It reminded me that we often have two important, overlapping roles – acting as technical experts to solve problems and make improvements … and acting as teachers and mentors to persuade others that our technical assessment is sound and offers real benefits.  Where we have different groups of stakeholders with different viewpoints and concerns, this can be the more challenging role

So, take a break from developing those technical skills and concentrate on your communication skills – both listening and teaching. It might be of more benefit in the longer-term.

Forget the mystery

A number of you sent me comments to try and unpick the (UK) productivity mystery I referred to in last week’s post.  Some of these were backed up by serious analysis.

Yet, after reading them all (which i did – gladly) I remain confused – and the mystery remains unresolved.

It just made me glad I can dip in and out of these sets of national statistics; I would hate to be responsible for creating them – or validating them.

My admiration is immense for the guys (and gals, I assume) who beaver away to give us these benchmarks.

And I am reminded why we benchmark performance anyway – it is to create dialogue and discussion which can lead to improvement.

So, last week’s mystery is not a problem – as long as the great and the good don’t spend too long attempting to unravel the mystery when they should be focused on creating a better, more productive future.

The UK Mystery

British productivity was growing steadily if slowly in the years before the financial crisis struck but it’s now some 16% below its pre-crisis level.

The Bank of England has published a paper in their  quarterly bulletin of economic research, examining the competing explanations for the productivity puzzle and has a stab at estimating how much of that 16% shortfall they can account for. At best, the authors suggest they can explain about nine percentage points, but it is clearly a mystery beyond their easy solution.

The bank says errors in measuring output probably account for about two percentage points of the shortfall. A decline in the output of once highly productive sectors, such as oil and finance, might account for another two percentage points.

The paper goes on to suggest that  another three to five percentage points of the shortfall may reflect problems that are the legacy of the financial crisis. These include the idea that damaged banks have struggled to reallocate scarce capital away from “zombie” firms with poor prospects and few customers and towards more productive firms with big ambitions. Cyclical factors—such as idling workers and production lines—probably also account for part of the productivity shortfall, but the authors say it’s hard to say how much.

Perhaps this mystery will unravel over the next few months – the UK certainly has to hope this is a mystery and not an early sign of a real collapse.

Governments need to get it right

Many countries have productivity centres to advise their government of productivity and related issues.

But do they do any good?

Is productivity something that can be shaped and steered by government?

I would say ‘YES’ from my experience in the UK – but not always in ways that might be expected.

Twenty or thirty years ago, the UK’s productivity levels were disastrously low – UK goods were uncompetitive, of poor quality and over priced.

Now, however, UK industry is much better, the economy is growing – and UK goods have a much better reputation.

What happened?

Margaret Thatcher happened!

Like her or loathe her (and there are plenty in both camps), she transformed UK industry – by curbing the power of the unions and de-regulating the economy.

Most national productivity strategies seek to regulate  … when they should be de-regulating!

:Pick up the banana skins

Most of the time we get things right…. at least if we have the skills to accomplish what we set out to do 

Occasionally, though, we slip on a banana skin – and we get something wrong.

A defect in Lean terms (one of the 7 wastes).

It is almost impossible to avoid all defects – though, of course, we try very hard. 

What matters is how we deal with our mistakes – how we learn from them. 

So, when you spot a mistake – don’t assign ‘blame’, assign ‘responsibility’  - for learning the lessons and making improvements.

Where can I find the solution to my productivity problem?

I have been in the productivity’ business’ for longer than I care to remember.

Sometimes, I feel that the longer I am in the business, the less I know – or the less I feel confident to declare.

I started off as a ‘work study engineer’ – great training, but I soon realised that studying work was only a partial approach. To often, low productivity stems from ‘non-work’ system inefficiencies that surround the actual work.

So, I started to look at business processes and business systems.

Then I realised that often it wasn’t the system that was broken but the culture of the organisation that de-motivated and disengaged the people.

So, where do I now feel that the answer lies?

I think I have worked my way ‘up’ the organisational structure and feel that change (for the better) has to start at the top with a ‘planning and execution system’ that stems directly from the organisational mission.  This must define and support ‘excellence’ and must translate into systems, processes and procedures – and skilled roles and tasks which build in individual and team responsibility for that excellence, together with performance measures that ensure we remain ‘on track’ with our plans and targets.

Can I define and design such an organisation and support system?  Emphatically no!  BUT I can facilitate its design and execution by business owners and leaders who share the vision of a skilled, trained, engaged workforce who know and understand their own roles within the overall organisational system.

We need to ‘flip’ the traditional representation of an organisation structure and see the role of managers and leaders as creating and sharing a vision of excellence and then identifying and removing the barriers that prevent ‘front line workers’ from creating that excellence.

Is useless expenditure justified?

As a productivity professional, I am used to counting every penny/cent spent and justifying the expenditure by the benefits it brings – its (perhaps tiny) contribution to the aims of the organisation.

Sometimes, however, firms decide to spend money on things which have no direct utility – corporate art, charitable giving, etc.  Can such expenditure be justified?  … in productivity terms.

Organisations are often large, complex, beasts – with many divisions and components. What makes them successful is their ability to co-ordinate all the parts and work together as a complete entity, working to common goals – and the organisational mission.  This ability often depends on leadership – and the way this creates a sense of shared values … and shared mission.

Often, non-utility expenditure is concerned with expressions of values.  It shows stakeholders the things the company regards as important. As such it helps create cohesion around the message and the mission.

As long as the amount of money spent on such things is not ‘out of proportion’ to utilitarian expenditure, and, as long as it is not expenditure for a privileged few – artwork in the executive penthouse, for example – it can make a positive contribution.

What’s Your Specialism?

Consultants usually specialise in …. productivity, quality, organisational development, innovation, or some other ‘improvement’ topic.

This suggests that the business world is full of tools and techniques that must be selected carefully according to the kind of situation – and kind of problem – being considered.

However my experience is that most of the tools and techniques – whether quality tools, productivity tools or whatever – are simply means of exploring the situation – and uncovering hidden ‘truths’.

Any consultant worth his/her salt should be capable of addressing a quality problem or an innovation project – using whatever tools they feel most comfortable with.  We pretend to be knowledgeable and ‘clever’ – and of course we are … but often our major asset is having time and having an external, disinterested viewpoint.

The Pace of Change

I was recently looking at some documents I had created a few years ago.  My first thought on reading them was that they were out-of-date, but on re-reading them, I realised the format and appearance was out-of-date but almost all the content was still relevant.

Sometimes we get confused by, or seduced by, the medium and forget to concentrate on the essential message.  Being up-to-date and looking modern and professional is important – but of no use if the underlying message is not right.

Oddly enough, things rarely change as fast as they are often though to – or claimed to.  Even in the IT  world, most of the ‘principles’ of computing have not changed in 20 years.  The hardware and software changes but fundamentally, computing is much as it was in the early days of the PC when it moved from the computing department to the individual.

So, review and update – but also reflect on the past and learn the lessons. Change – but because you have assessed the situation and the environment and have determined an appropriate course of action – not because change looks ‘attractive’.