The Right Call | When to Push for Productivity

Jun 1, 2010

Question: How do you get more out of your staff, and stay within the bounds of good corporate ethics?

by Fil Fraser

The Case: The loonie is flying high and may continue to do so for some time. Businesses which used to base at least part of their success on a low dollar now have to adapt to a new reality. The buzzword is productivity. Financial gurus are saying that you’d better get used to the soaring loonie, and improve productivity. If you say “easier said than done” you’re not alone. It means getting more out of your work force. In an era when many front-line employees are still smarting over recent layoffs and cut backs, a lack of loyalty to the company – a key factor in improving productivity – can be a major challenge.

The Panel:
D’Arcy Levesque: vice president, public and government affairs, Enbridge
Stephen Murgatroyd: chief scout, Innovation Expedition, Inc.

D’Arcy Levesque: Canada has unfortunately always had a challenging track record in terms of productivity and performance. We’ve always fallen behind the U.S. People cite various reasons but it’s always difficult to understand the productivity disparity between Canada and the United States. Economists have studied Canadian productivity and governments have tried to correct many of the structural contributors, tax rates, talent pools, for example. It’s a tough one.

But it’s a red flag. It clearly has an impact on the manufacturing sector, because for years we’ve relied on the weaker Canadian dollar to give us a competitive advantage in the selling of our manufactured goods. We’re not going to be able to rely on that any longer, because the dollar is driven to a large degree by the resource sector.

Stephen Murgatroyd: I’ve been working with a particular sector for the past month and they are really struggling because the high dollar impacts not only their core material, but it also impacts the cost of fuel, the cost of transport, and so on. What they have tended to do is to look for ways to cut costs, before they look at ways of increasing revenue. The other thing they tend to do is to try and find fast solutions, easy solutions. The working assumption is that this won’t last forever.

But in fact, those of us who look at the long-term picture see the high dollar as a sustainable possibility for several years. It’s not going to go away in a few months. I think it reflects the total integration of the Canadian and U.S. economies. Some people will take a different view, but it’s my view that the high dollar is not bad for Canada at all. But it does require a total adjustment – especially in our manufacturing sector – to a new reality. I think that companies need to think about this as a permanent feature of their organization. It’s not temporary. That requires them to think differently, about how we gain productivity.

Levesque: There are a couple of things that I think are critical if a company is going to encourage or enhance productivity among their employee population, while at the same time ensuring that they continue to work within the ethics of the corporation. The first one is ‘communicate, communicate, communicate.’ It’s been proven time and again that successful leaders and successful companies are those that do a good job in communicating with their employees. Good leaders make sure that they provide all employees with a clear vision of the company’s future.

It’s important to give employees the opportunity to identify how they can improve productivity, and how they can identify new forms of technology. We have a very effective employee Internet site called e-link (the award winning site has been recognized as one of the top 10 sites of its kind in the world). The site gives employees the opportunity to have their own team sites and encourages the sharing of information. It’s very interactive and engages employees in regular surveys so that they can provide input on issues. We deal with issues like improving our competitiveness, climate change and diversity in the work force so that we can give employees a deeper understanding of the issues we face as an organization and the opportunity to identify ways that we can improve our performance.

You have to ensure that employees share similar values. Values shape behaviour. If they live these values as part of their daily activities at work, it goes a long way towards improving overall productivity. So at the beginning of each year, each employee is required to sign off on our code of business conduct, which means a commitment to conducting our business ethically.

Enbridge has been recognized with a number of awards, we’re on the global 100 list of the most sustainable corporations in the world. We have found that our commitment to corporate social responsibility (CSR) has made it possible for us to attract and retain the best and the brightest people. That’s a big factor in enhancing productivity.

And regulators tend to have more confidence in a project application if they know the company has a history of consulting respectfully with key stakeholders, and a history of managing and mitigating environmental issues.

Murgatroyd: Productivity is fundamentally the amount of output you get from an input of labour, over time. It is about investment and about leveraging technology. It’s not about asking people to work harder, it’s about asking them to work smarter.

We’ve been getting a free ride on the American dollar; people buy stuff or they buy solutions, but they don’t really leverage them. They just throw people at them. They haven’t really been under economic pressure, so the productivity gap between us and the U.S. is growing. It’s quite serious. And until we really start re-thinking the nature of work processes, the business processes that people use, how we use intelligent systems, how we leverage things like machine intelligence, then we’re going to be in real trouble. We will have increasingly lower and lower productivity.