But, our concepts and models of leadership have little to do with racking up added value; they are almost entirely about people and relationships!
Here's an exploration of that worrying gap between what we need and how we think about leadership...
Before the 2008 Financial Crisis the UK’s productivity growth wasn’t great, but just about it kept up with our competitors. However, for the last 10 years, our productivity growth has been flat, and that’s really, really important to everyone in the UK. Because…
“Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise output per worker.”
(Paul Krugman, Professor of Economics and International Affairs Emeritus at Princeton University)
To put that another way, our growth in productivity is grim, and it’s hitting our wealth, health, education, services, families… It adversely affects everything personally important to us.
There are umpteen explanations for the UK’s “Productivity Puzzle”, plus lots of research, and significant government investments.
Crucially, we've learnt that improved productivity is not only about innovation, technology and upskilling. It’s also about managing! Here's a really pertinent quote from the experts...
Crucially, we've learnt that improved productivity is not only about innovation, technology and upskilling. It’s also about managing! Here's a really pertinent quote from the experts...
"…three quarters of the gap between the UK and the US [which has exceptional productivity growth] can be explained by weaker management practices in British business"
(“How good is your business really?” Productivity Leadership Group, 2016).
Yes, a chunk of our productivity problem is how our organizations are led, and how we understand leadership!
There’s a great deal of very robust research into the management practices that drive productivity. Practices such as structured approaches to fixing problems, setting challenging targets, publicising performance, and promoting star performers.
There’s a great deal of very robust research into the management practices that drive productivity. Practices such as structured approaches to fixing problems, setting challenging targets, publicising performance, and promoting star performers.
To appreciate the core practices that could transform your organisation’s productivity, try this rating scale.
Does your organisation…
Fix problems quickly, but often can’t do more than that
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1
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2
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3
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4
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5
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Rigorously investigate every problem, then change processes to ensure it never recurs
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Set vague targets, or targets almost everyone will achieve
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1
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2
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3
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4
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5
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Agree ambitious targets with clear accountabilities and rewards
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Announce the targets, then give reminders
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1
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2
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3
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4
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5
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Reinforce understanding of the targets in every meeting
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Accept that some employees do not know how well they are performing
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1
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2
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3
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4
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5
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Make performance measures upfront, graphic, widely publicised
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Reward experience or qualifications; not current performance
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1
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2
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3
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4
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5
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Reward successes promptly and generously with bonus, promotion or status
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Permit some poor performers to continue in their roles for a while
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1
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2
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3
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4
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5
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Move poor performers as soon as you know remedial training hasn’t worked
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Not really know who it’s stars are, or how to utilise and develop them
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1
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2
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3
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4
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5
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Have a proven process to actively identify, develop and promote top performers
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If most of your ratings are 3 or less, then I suspect your organisation will struggle to raise its productivity - no matter what it invests or tries. Your organization may never achieve significantly more for its customers or its people. An awful lot of impressive research supports that view; click here for an example.
This is the important bit...
The practices that raise productivity are uncompromisingly business focused - they are entirely about process, performance and adding value (see "Productivity – seven things managers must do"). Yet, most of our leadership thinking concerns relationships and personal style.
Today’s hot topics in leadership include engagement, coaching empowerment, culture, mentoring, boundary spanning, self-awareness, inspiration, mindfulness, emotional intelligence… That’s all softer, subtle people stuff! Sure, it’s important. But, if we limit our understanding of leadership to just the soft stuff, we will miss crucial opportunities to raise productivity.
Today’s hot topics in leadership include engagement, coaching empowerment, culture, mentoring, boundary spanning, self-awareness, inspiration, mindfulness, emotional intelligence… That’s all softer, subtle people stuff! Sure, it’s important. But, if we limit our understanding of leadership to just the soft stuff, we will miss crucial opportunities to raise productivity.
And, we do limit our understanding of leadership. For example, all nine “dimensions” of the NHS Healthcare Leadership Model are soft, people-centred [see Note 1]. The word “targets” accounts for just 2 of the NHS model’s 5419 words. “Goals” accounts for 5 words. “Waste”, accounts for 1 word. And, “productivity” is never mentioned!
Another example. The London Business School’s “Essentials of Leadership” programme focuses upon "Finding purpose", "Empowering others", "Enabling change", "Influencing effectively", and "Leveraging your strengths". I'm sure LBS run a great programme, but shouldn’t there be something about delivering more?
Choose almost any leadership model or programme, and it will be largely “soft stuff”. We really need to create space in our leadership thinking, and our leadership training, for the “tough stuff” that will raise productivity. Sure, we need “soft stuff” to deliver the “tough stuff” skilfully. But, by unwittingly focusing exclusively on the “soft stuff” maybe we create diplomatic, self-aware leaders who do little for productivity?
There is persuasive evidence we’ve got things wrong in the UK. The World Management Survey (WMS) has conducted carefully structured interviews with more than 20,000 managers in 35 countries. It’s vastly impressive! Its data clearly indicate that some management practices in UK manufacturing are well behind practices in competitor countries. And, the things UK managers are particularly poor at are the tougher practices of setting performance indicators, reviewing business performance, and ensuring changes are made.
I know it’s anecdotal, but I can’t help mentioning that almost all of the umpteen executives I’ve worked with in the last 10 years had good soft skills. Their issues were largely the tough stuff!
I know it’s anecdotal, but I can’t help mentioning that almost all of the umpteen executives I’ve worked with in the last 10 years had good soft skills. Their issues were largely the tough stuff!
Food for thought...
● Is your organisation’s leadership model “soft” or “tough”? (Or, preferably, an intelligent combination of those?)● How much of your leadership programme is specifically devoted to raising performance/productivity? (To answer “it all does”, means none of it really does. You're kidding yourself!)
● Do your leaders know which small changes in their practices could yield significant improvements in productivity? (If they don’t know, ask me what you and they might do.)
● Does your leadership programme deliver measured step changes in productivity/performance? (If not, how do you justify it?)
Get in touch!
If you have questions or comments, it would be good to hear from you. There's a quick "Contact me" form on the left.
Peter
© Copyright Peter Goodge, March 2020
Notes
1] The NHS’s nine dimensions are "Inspiring shared purpose", "Leading with care", "Evaluating information", "Connecting our service", "Sharing the vision", "Engaging the team", "Holding to account", "Developing capability", "Influencing for results".
