There are often ‘quick fixes’ we can apply to problems. There are also often improvements we can make to get yield up or improve throughput. The problem is that some of these can have negative impact over the longer-term.
Global agriculture seems to be caught in this trap. Yields per hectare are rising. Good! With a growing global population, this is not only desirable – but essential.
However, there is increasing evidence that underlying soil performance is falling. This means we need more and more ‘treatments’ to maintain yields (putting costs up) – but it also means that there might come a time when the soil refuses to support effective growth.
So, though we might want to improve agricultural productivity, we need to be wary of the timescale over which we expect improvement to occur – and be sustained. Traditional agricultural practices managed to maintain soil quantity and slowly improving yields over centuries; our need for growth has resulted in massively increased yields – but for how long?
Total factor productivity around the globe seems to be slowing. This is a major problem.
Rising productivity is what fuels increased wealth and well-being – it is what allows poorer nations to catch up to richer nations … a basic requirement of longer-term political stability.
In developed nations, it is what allows a falling population to afford the pensions of a growing retired class.
If TFP is falling, then – collectively – we are doing something wring .. or not doing something right.
One thing we do is to continually increase regulatory burdens – with the best of intentions, but resulting in smaller firms in particular finding it hard to navigate the bureaucratic minefield.
We also – especially when times are hard – often seem to forget to educate, train and develop the workforce … increasing their capacity and capability.
Governments work in fits and starts on infrastructure – but often more on ‘vanity’ projects and ‘note grabbers’ rather than concentrating on productivity infrastructures.
We need to do more – more consistently.
Now, when I rule the world …
We are all good at starting new initiatives, new ventures – and creating new teams or even new departments. Of course, it is good that we can do this speedily and (hopefully) effectively.
The problem is that most of us are not very good at closing down those initiatives, those teams when the job is done – or has proved to be ineffective.
Many organisations thus have the remnants and rumps of what were once effective projects, effective teams – even, of course, effective products ….. things that should have been positively closed down but have been left to ‘wither on the vine’.
So, take a look around and see what you should stop doing.
I have been doing some training this week – on Change Management. Both the group I was with – and myself – exhibited all the signs of a comfortable regularity – staying at the same hotel we always stay at, dining in the same restaurant, eating (broadly) the same lunch – and so on. Its very good when you can use yourself as the role model/case study..
Of course I think of myself as a flexible innovator – but ‘behind the scenes’ I am as resistant to change as anybody else. This doesn’t make me odd, or staid, or old-fashioned or curmudgeonly – though I might be those things as well…. it just makes me normal. It is my little routines that make the day go more easily. No need to think; just do what you’ve always done.
… And hope that when its needed, you can switch into ‘change’ mode – and become that flexible innovator.
Some firms like to link pay explicitly to performance – with a direct link.(the ‘carrot approach’)
Some like to rely on post-poor-performance sanctions ( the ‘stick’ approach).
Those who think of themselves as enlightened pay good basic pay and expect good performance (the ‘faith’) approach).
Others pay poor wages but still expect good performance (the ‘ miserable fools’ approach)
…. but the majority have never thought about it (the ‘ignorant fools’ approach)
Which one(s) do you think work? Can you prove it?
In the UK, we have a new government … similar to the last one… but without the need for a coalition. I make no political comment on the government we have … only that I am glad we have a single-party government that should be capable of directing its own strategy.
In another context, wearing another hat, I have been ruminating on the degree to which governments influence productivity. My starting point was that governments have little long-term effect on productivity, though they can have an impact in the short-term. Long-term trends though tend to proceed irrespective of government intervention until there is some revolutionary event that triggers a ‘great leap forward’.
However, as I started to think – and to draft the paper I am working on – I started to change my mind.
I started thinking about the infrastructure elements that underpin high productivity – health, education, skills, transport, communications ….. in addition to the macroeconomic and research/innovation culture. Clearly these are all factors where government has a major role to play … and major influence to bear.
So, perhaps governments do have a major role to play … in creating the potential for high productivity that industrial and commercial organisations can build on.
So, if you are in the UK, I hope you voted – for the greater productivity good – and not personal economic well-being. Only the former can deliver the latter in the longer-term.
I am a governor of a secondary school in the UK. We are preparing our pupils for a world of work in which many of the jobs do not yet exist … and even many of those that do now exist will have changed substantially.
Our pupils will go through ‘portfolio careers’ in which they will have several jobs – often multiple part-time jobs at the same time.
This means we are trying to instil flexibility and resilience into our pupils – alongside knowledge, understanding and core skills, of course.
What does all this mean for the future productivity of the UK? Well, knowledgeable, flexible, resilient workers should form a good basis for a high productivity organisation – if that organisation is willing and ready to work with that flexibility, exploit it and allow it to underpin organisational flexibility and innovation.
My fear is that managers who are of a previous generation will continue to create inflexible, rigid structures that fail to exploit these new skills and attributes.
Diversity is a bit of a buzz word. We are all, as employers, encouraged to monitor and manage diversity in our workforce. But is there any evidence that having a diverse workforce makes any significant difference to an organisation?
Anecdotal evidence is fine. And, of course, there is a degree of ‘intuition’ about making sure you exploit the talents and skills of all parts of the potential workforce. But ‘real’ difference?
I don’t know … BUT… I came across something the other day that make me think.
A paper was published recently in the journal Proceedings of the National Academy of Sciences suggesting that when plant biodiversity declines, the remaining plants have lower productivity.
Can we draw a parallel with human diversity. Probably not … but it does make you think, doesn’t it?
Turkey has been through an economic transformation in recent years. They have learnt well from incoming Japanese firms and Japanese management teams and have some indigenous companies that now rank as world-class in terms of manufacturing performance.
However, there is an odd situation. In terms of developing SMEs and creating small-scale entrepreneurs (ready to move into becoming large-scale entrepreneurs), Turkey has done less well.
It has learned well where it has an established model to learn from but significantly less well where it has to develop its own ideas on an appropriate infrastructure and culture to support business start-up and early growth
If Turkey cannot unlock this puzzle, it stands to enjoy a few years of success before slipping back down the slope to economic mediocrity.
Being frightened of failure can be a motivating influence. However it can also be a constraining factor causing people to ‘play safe’ and avoid risks.
Most change involves some risk – that things won’t go to plan or as we expected. But if we don’t take those risks, we don’t get the change – and the benefits it brings.
So we have to encourage people to take a few risks – but managed risks. We don’t want people taking unplanned, unmeasured and unmitigated risks with our resources, our business. So we have to train them to assess the risk – and to ensure they know how to recognise when all is not going to plan- and what to do about it.
Sometimes they will get this wrong – and we get a failure. But if we have the right mix of risks – and especially the right mix of people – then our successful risks should far outweigh our failures.
As they say…. “Nothing ventured, nothing gained!”