The Right Call | When to Push for Productivity

Jun 1, 2010

Levesque: My advice to CEOs facing the higher dollar is to recognize that your employees are ultimately going to be responsible for improving your overall productivity. First you have to help them to understand where you want to go and what it will take to get there. Give them the opportunity to participate in that process:

Make sure that they all share similar values.
Encourage an entrepreneurial culture. Make sure that you reward productivity.
Set clear objectives and encourage employees to meet or exceed those targets.
Measure their performance on an annual basis. We use score cards and we provide them with additional incentives, both financial and otherwise if they exceed their targets.
Provide your employees with opportunities for training, re-training and skill development. We work with the University of Calgary to provide special courses that any employee can take – for example courses in leadership development and communication.
Finally, offer an environment that encourages a healthy work/life balance. We give employees days off every year to do community work.

Investing in your employees and giving them the tools they need to be successful is, I think, one of the key ways to improve your productivity.

Murgatroyd: There are four big questions to ask about the business processes.

The first is what can we stop doing? A lot of businesses just carry on doing what they’ve always done as if it’s valuable, and quite a lot of it isn’t. So, what can we stop doing?

What do we do well but can improve and do smarter?

What do we do badly, but have to do for our customers and for our business? We’d better redesign how we do that.

And what don’t we do at all, but we’d better start doing because we need to be on the ball and stay ahead of the competition?

Having asked those questions you should look at every business process in the enterprise – take that process apart and find out what it really costs. Where is the labour content? Why do we do that work? Some companies can’t remember why they do certain things. Sometimes they’re extremely expensive. When you get rid of them, and nothing happens to the system and the customers continue to be satisfied, you’ve just saved time, money, lots of emotional energy, and you can really improve productivity that way.

You have to invest in the training of people and in using the appropriate technologies to make that person smarter, faster, leaner, less expensive and more efficient. There is a rigorous process around business improvement and investments in learning and technology. This is what working smarter means. Google asks its staff members to work on Google projects four days a week, and on the other day they work on projects that are of interest to them. Google has made major strides by using what they worked on during that fifth day.

One of the things we know is that quite a lot of innovation comes from part-time staff, or new staff or junior staff, as opposed to the boardroom. Innovation comes from the people nearest to the customer. Staff engagement is the best predictor of profitability and performance in an organization. For example, in the case of Sears, an improvement of 1% in employee satisfaction leads to a significant difference in sales and shareholder value in every 16-week cycle.

Quite a few companies are repatriating work that they’ve outsourced for these reasons. The ability to control your business processes is a key factor in productivity, and the more you give it to a third party the less control you have. I think we’re going to see a re-balancing of that over time. The fundamental problem that Canada has is that we’ve done really well, by not having to do much at all. The real challenge for us is to realize that the future isn’t what it used to be – we have to get really smart to compete in a fast-changing world. We have not demonstrated an ability to do that in terms of productivity and innovation. I think we have a long way to go. In various places we see signs of hope – but it’s not a beacon.

THE FINAL WORD

When Charles Darwin talked about the struggle for existence, he used the term “survival of the fittest.” Many people have misinterpreted that phrase as meaning “survival of the strongest.” Recent experience in the corporate world has demonstrated that it is often those companies seen as the biggest and strongest that are the most vulnerable to changing conditions. The bigger they are, the harder they fall.

What Darwin meant was “survival of the most adaptable.” Survival and success in today’s fast-shifting economy will go to those enterprises that have the ability to change built into their corporate DNA. The best of them will see the high dollar as an opportunity, not a challenge.