These two terms are often used interchangeably – but they are different. Here I am not concerned with technical differences – but with philosophical or attitudinal differences.
Organisations that pride themselves on being efficient usually strive to achieve the same performance with fewer resources – doing the same with less.
Conversely, organisations that aim to be highly productive usually strive to do more with the same resources -doing more with the same. They concentrate on the ‘top line’ (of the productivity ratio) – and the ‘bottom line’ takes care of itself.
No-one is quite sure why the UK voted to leave the EU – but a recent study into the habits of 500 SMEs (small and medium enterprises), commissioned by online printing company instantprint, revealed that dealing with HR compliance forms, pension paperwork and health and safety regulations eats up an average of ten hours of the working week.
These companies took so long complying with regulation that they had little or no time to focus on business growth.
This is not a recipe for success – and may be a small contributing factor to the Brexit vote.
Certainly we have to hope that Mrs May and her government will be looking to reduce the burden of bureaucracy as the UK leaves the EU.
India is held up as the latest ‘economic miracle’ – transforming its economy over the last 20 years. It is often suggested that success is down to ‘hard’ factors – such as technical ability, capital investment – and, of course, cheap labour.
But India has recognised the importance of ‘softer’ skills ands factors – such as teamwork, problem-solving and communication. Young Indians are receptive to modern approaches to organising and managing a workforce and respond positively.
In fact, a study by the University of Michigan, on female garment workers (in Bangalore) showed that providing training in soft skills raised productivity by 12%.
Sometimes, simple approaches are the best.
I talked last week about AI – posing the question whether this is the next big technological driver of productivity improvement.
Of course, some people are really worried about AI – and its effects on jobs, suggesting that most jobs in time can and will be replaced by some form of automation.
However, before that happens we are likely to hit a ‘sweet spot’ where automation/robots/AI assist human work his will allow work which is not possible now. the winners will be those tht can spot the opportunities and create products and services that rely on these new forms of thinking and movement for their execution.
So the future is not bleak – as with most technology, it is full of exciting opportunities.
Technological innovation can drive massive productivity gains – but it is some time since we have had innovations of the size of those in the 1970s and 1980s – when the PC first hit desktops – and ‘productivity software’ followed.
Now industry waits for the next major impetus - and governments hope we might get something of such magnitude that it helps solve the great ‘productivity puzzle’ (whereby productivity growth stubbornly refuses to match pre-economic crisis levels.
Is Artificial Intelligence the answer? AI is being trumpeted as the next big thing – and †he big tech players are investing millions.
Yet, so far, we see better ways to play our music or switch between apps – but nothing significant in the apps themselves … or – even more important – new forms of app.
These might come, of course. Technological revolutions do not happen overnight.
Certainly, at the moment, AI seems to be the only contender for ‘the next big, technological productivity driver’.
Watch this space.
The world needs to improve productivity – if we are to raise living standards, feed the world and avoid water and fuel shortages. Yet, governments seem unable to do this – productivity has been at best sluggish over the last 10 years.
Some governments – rightly – see a link between innovation and productivity – but then they go too far in thinking that increased R&D spending will improve innovation.
innovation is not invention – innovation is more concerned with identifying new uses for today’s (and even yesterday’s) technologies.
So ,yes, we need to improve innovation .
But no, R&D spending is not the way to do it.
I am not advocating spending less on R&D – invention is also important – but we need to look more at how we create the conditions in which people think differently – education, training, induction, empowerment – some of these are government responsibilities, others are for the private sector to work on.
GDP per hour worked is †he normal way in which we measure – snd compare – national productivity.
This is at best a ‘blunt instrument’. There are so many factors that affect GDP besides productivity.
So, when you read that, say, UK productivity is low compared to another country – take the information with ‘a pinch of salt’.
I think the way in which we measure national productivity requires review, if not an overhaul. We need to look at social and environmental factors so that we include societal and planetary well-being.
The productivity of Germany and France (GDP per hour worked) is strong – and almost identical … even though Germany is normally regarded as a strong economy and France as a weak one.
Perhaps the ‘social models’ that exist in much of European industry have some merit – and the UK might be better to embrace such models as a part of the EU rather than rush for the exit doors.
We’ve all seen technology completely disrupt certain industries – photographic film, film cameras, music recording, etc.
Sometimes what emerges from this process of disruption is a changed but equally strong industry; but sometimes the disruption is so great and over such a long period that the former industry dies but the new one takes a long time to get established. How many of you have got an electric car?
Internal disruption can be quite unsettling too. If mis-managed, new initiatives and new ideas can cause disruption to current ways of working but the new form of working takes too long to establish – and customers are disappointed. The drop in performance might be so huge that it takes months or even years to make up.
So, when making major change – plan, plan and plan – and then make sure you have the skills to execute.