Buzz around building productivity levels
companies can lift productivity by eliminating complexities
If there is a buzzword in the Australian business world at the moment, it is 'productivity'.
Across the economy, politicians, business lobby groups and corporations, both big and small, have focused on a slide in productivity levels that has been evident since the 1990s.
companies can lift productivity levels by as much as 20 per cent by eliminating complexities in the office
Against the backdrop of the resources boom, Australia's productivity rate has declined markedly in the past decade. Indeed, in December the Productivity Commission released a 609-page report calling for regulation reform — just one of many reports it has released over the past five years demanding a reduction in the burden of unnecessary legislation.
Last week NAB chief executive Cameron Clyne joined the chorus on productivity decline.
The bank boss said it was "quite frankly scandalous" that Australia was pushing out fewer graduates than it did a decade ago in areas such as IT.
But it's not just the big end of town that needs to be concerned with declines in productivity. All growing businesses need to keep track of productivity issues.
According to research from two leading Australians in the field of productivity, for many growing companies the problems exist in how staff interact and deal with each other.
Tom Bevington and Danny Samson have just published the book Implementing Strategic Change: Managing Processes and Interfaces to Develop a Highly Productive Organisation.
Samson is Professor of Management at the University of Melbourne and a leader in executive education in Australia.
Bevington is a former partner in international consultants AT Kearney and The Boston Consulting Group. His past clients include ANZ Bank, Austrade, AXA, Commonwealth Bank, GE Capital, Shell and Westfield. He is now non-executive chairman of the Bevington Group.
The duo teamed together more than five years ago and dedicated five years of research to analysing 117 different organisations in completing their new book, released this month.
According to their work, it is often problematic internal processes, rather than external forces such as Work Choices legislation, that cause the biggest productivity issues.
By mapping the processes within each of those companies, the pair have learned that it's problems in the routine day-to-day interaction between staff and basic processes that cause major productivity loss – what they term "interface activity".
According to the book, by mapping and then managing these complex "interfaces" better, companies can lift productivity levels and eliminate unnecessary processes and work.
The pair claim many companies can lift productivity levels by as much as 20 per cent by eliminating complexities in the office.
According to Bevington, the research shows that on average a third of work hours are wasted coming to terms with poor processes – the "noisy interfaces" identified in studying 117 different companies and organisations.
“One of the things that has happened in the last 30 years is that business processes have become increasingly more complex and this trend is accelerating as a result of outsourcing, off-shoring, service bundling, product extensions," Bevington says. "You only need to think of your last “conversation” with a call centre to experience it. The result, the data from 117 organisations shows, is that 49 per cent of the time of managers and staff on average is now spent in undertaking a vast array of interfacing activities and of these many are interfacing activity noise – activities needed to deal with interfacing issues – errors, omissions and delays."
Professor Sampson says looking inwards rather than blame external issues can help lift productivity.
“The research behind our book identifies a huge opportunity which has never surfaced before," says Professor Sampson. "The book shows how organisations can, by managing their ever more complex interfaces, lift productivity by about 20 per cent quickly and at little or no capital cost and efficiently engage their staff in the delivery.
"What really excites me is that our research shows that the answer every manager is seeking lies buried in plain sight in every organisation. They need to pay attention to the myriad of interface activities between the routine steps carried out by their staff."