There are many theories on why UK productivity is so poor. However, there is one obvious solution: we need to become better people leaders, says Cirrus CEO Simon Hayward in HR magazine.
Productivity growth is at its slowest since the 1990s. The UK performs poorly compared to its international rivals, lagging behind France, Germany and the United States. If we could match the productivity rate of the US, our gross domestic product would increase by a staggering 31%.
Chancellor George Osborne recently described low productivity as the “challenge of our time”. The head of the government’s fiscal watchdog, Robert Chote says Britain’s low rate of output per worker is the single “biggest risk” to our long-term economic stability. And Bank of England governor Mark Carney believes Britain’s productivity record will be the key to sustaining our recovery. He said: “In the medium term, productivity growth – doing more with less – is the key determinant of income growth. Our shared prosperity depends on it.”
So what’s holding us back? Various media commentators have cited issues such as lack of investment, poor infrastructure, low wages, and increased regulation. Digitalisation and globalisation open the door to some great opportunities, but can also result in a lack of focus among stressed workers struggling to juggle multiple priorities. But there is a solution that can help to overcome all of these challenges – a more connected style of leadership.
Let’s consider Mark Carney’s point about “doing more with less”. The desire to unlock discretionary effort is one of the reasons many organisations are keen to increase levels of employee engagement. The link between engagement and productivity is well documented. Engage for Success’ 2012 Nailing the Evidence report explored this link in detail, citing results from a Gallup poll that organisations with a high level of engagement report 22% higher productivity.
Tanith Dodge, director of HR at Marks & Spencer, was closely involved with the Nailing the Evidence report. She has spoken widely about the importance of investing in people and leadership, and about linking that investment to bottom line benefits: “We have built more connected leadership across M&S as we develop the capability of leaders in line with the values and attributes at the heart of the M&S brand. Forming these meaningful connections has galvanised leaders to lead change and has also resulted in increased productivity and cost savings.”
This focus on connected leadership, of ensuring everyone across the business understands the link between their job and the organisation’s purpose, values and goals, can unlock the productivity puzzle.
Many organisations I work with are seeking to cut through unnecessary bureaucracy and aim to introduce much simpler ways of working. Many businesses are still quite hierarchical and have complex systems in place. Disrupting and simplifying these systems can contribute to innovation, collaboration, and faster decision-making – all of which can help to boost productivity.
If we can develop more leaders who are values-led and empower others to make decisions based on a shared purpose we can cut through complexity. Although this sounds quite straightforward it can be tough. It requires leaders to let go, devolve power, and trust others. They must also be increasingly transparent, honest and open to feedback – and act on that feedback, even when it’s hard to hear.
What are the benefits? This style of ‘connected’ leadership encourages a positive culture in which people are motivated to give their best. It creates increased levels of employee engagement and people feel more competent, which in turn leads to many choosing to take increased responsibility – which results in improved productivity.
When it comes to increasing productivity we are stronger together. It requires genuine cultural change. By starting at the top and working our way through the leadership and management communities in organisations, we can create a change in mindset and a more connected approach to improving long-term productivity.
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© HR magazine 2015