Against the backdrop of a range of geo-political and societal risks and challenges, and a set of macroeconomic schisms (a deflated Eurozone, volatile capital markets in the Far East, a nonchalant North American production cycle and a rapidly growing MENA and African middle class), the need to address productivity comes a very poor last place in the priorities of the world.
Although it is generally accepted there are continuing improvements in living standards, prosperity and technology worldwide, what is becoming increasingly worrying is the fact there is a general global slowdown in efficient output, which in turn may lead to reductions in production output. So, those efficiencies we are now reaping success from will ultimately lead to our slow demise as every technological or societal advance will be based upon a diminishing and incremental overall benefit.
The productivity conundrum is ultimately pointing to the reality of low growth rates and whilst this might be a symptom of (largely) stable and mature economic markets, it continues to raise questions when we try to equate efficiency versus effectiveness (with more powerful technologies and automation why can’t we increase productivity any further ). Productivity is, in many ways, becoming an oxymoron in itself. But what can organisations deal with the situation
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Several commentators have continued their calls to enhance and boost productivity worldwide through ensuring education is strengthened with a particular focus on boosting entrepreneurship and capital investment in providing a knowledge-focussed workforce of the future.
To meet the challenges, we need to go beyond the fundamental definitions of productivity and radically change the mindset around linking productivity to specific sectors (such as STEM). Harnessing rather than piggybacking on such subject areas to provide productivity gains, may not provide improvements in productivity that countries such as the UK will need in the long term.
The most immediate and available mechanism in this regard must surely be employability. Both employability and productivity must be correlated and the benefits from each need to be made accessible. This will require a sea-change and shift away from the Fordist view of productivity simply as an engine of the firm, and as a progenitor of an efficient market.
Business schools, in particular, need to be taking a lead on this redefinition. The study of business should be seen as a discipline on par with STEM and science subjects. If, as it is argued and expected, a better skilled workforce for post-21st century organisations is required with ever better management and leadership, business and management itself needs to become a professionalised subject.
Read on to find out how business schools could help the UK’s productivity problem.
This requires more than accreditation and involves close integration. Business schools should lead and craft productivity needs that are required by organisations directly with firms. One element that is recurrent in this long running debate is that the perspective taken is always econometric and production-based. Yet we are not dealing quite so purely with input-output. The reason being is of course that we are trying to quantify this notion of productivity with “humans in the way”. Therefore we need to include and expand upon the social science of productivity to reflect the human agents that are involved in what amounts to an agency problem.
Businesses and policy makers need new perspectives on how behaviour, wellbeing, creativity, team dynamics and all the non-production strategy elements can assist in increases in productivity. Future business leaders need to have more focus on the science and art of workplace health, digital sociology, organisational psychology, architecture, living spaces and ergonomics, knowledge and learning and studying nature.
The business world needs to consider changing the conventional mindset of productivity and go beyond the three, six, nine or 12 month business cycle. Is it natural for what we define as business to be limited to such a frame of reference What is the more natural lifecycle for a firm five days or 25 years Can and should we consider that productivity outlives any individual, any organisation
People need risk-based and ethically moral decision-making experiences early on in their business and management education. These experiences will need to come from work-based placements, internships and reflective career holidays. Business schools should be connectors to business organisations where students should be encouraged to pursue their passion for experiencing and using their skills to add value and realise positive business outcomes directly with each other, as well as customers and those stakeholders in the value chain.
Finally, business schools should be encouraging disruption as a natural and elementary force and behaviour to be harnessed and skilfully utilised as part of a learning via experience regime. Business schools need to provide employability interventions which transmit concepts rooted in a desensitisation to 20th century norms: eschewing top-down hierarchical thinking in favour of networked intelligence; business requirements in favour of customer experiences; profit maximisation in favour of value proposition attainment; performance in favour of behaviours; complexity, standardisation and access in favour of simplicity, personalisation and convenience.
Productivity is too important a commodity to be exchanged for the benefit of efficiency gains alone. But to make the change, radical new approaches to the idea of business are needed, based on a much wider range of knowledge, experiences and employability skills.
Research and theories have all claimed to possess the answer or dismissing the UK as being one of the worst for productivity in Europe. Plenty of column inches have been filled and negativity created as a result, yet while externally, business leaders insist they are looking to overhaul this, very little seems to be occurring in the form of change.
Professor Amir Sharif is a professor at Brunel Business School, Brunel University London.
