The Chancellor needs the UK to work smarter, not harder, to improve productivity.
Progress indicator
Phillip Hammond faces a tricky situation for his 22 November budget: a political need to soften austerity, weak growth and unacceptable levels of UK productivity, all wrapped up with the BREXIT debate.
Vincent Desmond, Chartered Quality Institute CEO, said that, “The productivity problem is not new, but it is now fundamental to UK plc’s competitiveness. And that it why I am so disappointed that this topic will be inevitably be drowned out by tax pundits and the BREXIT debate in the upcoming budget commentary.”
Back in January, the UK Government identified in its industrial strategy green paper the need to increase productivity and drive growth. The key response to our productivity problem in this strategy is to increase investment in research and technology, in technical skills and in infrastructure. The CQI knows that this solution is incomplete.
What we are talking about is a culture change in the UK: from a ‘that’ll do’ mentality to a culture of right-first-time and quality improvement. The CQI represents qualified quality improvement professionals who are expert in helping organisations identify and address process inefficiency and ineffectiveness; this is the resource that can catalyse a step change in productivity for the UK.
The missing element is investment in the practice and culture of working smarter to eliminate the appalling waste we accept in the UK. We estimate that between 5% and 30% of UK GDP – our collective effort - is wasted because of reworking mistakes and inefficient working practices in the private, public and not-for-profit sectors. Imagine what can be done with this taxpayer, shareholder and donor money by avoiding this waste. Investment in something which reaps benefit only in the medium to long term may be difficult in our short term political and business cycles, but we simply can’t carry on wasting scare resources like this.
Vincent Desmond, CQI CEO, said “What we are talking about is a culture change in the UK: from a ‘that’ll do’ mentality to a culture of right-first-time and quality improvement. The CQI represents qualified quality improvement professionals who are expert in helping organisations identify and address process inefficiency and ineffectiveness; this is the resource that can catalyse a step change in productivity for the UK.”
The Missing Ingredients for UK Productivity
Leadership – The government and shareholders must shine a light on the cost of poor quality in public and private organisations, and organisations must report to tax payers and shareholders how much is wasted through inefficient and ineffective business processes.
Operational Governance Systems – The government and shareholders must ensure that public and private organisations have the operational governance systems in place to define, measure and improve work.
People Involvement - Workers know where productivity problems lie: they must be listened to and enabled to improve work.
Technology – Organisations must invest in technology to improve productivity, but the driver must be improvement not technology.
Education - Quality management skills must be embedded into all high school, vocational and STEM programmes so that we develop a workforce that not only has the technical skills - what to do - but also the quality improvement skills - how to do it efficiently and effectively and improve.
The CQI applauds the work of the IoD in promoting operational governance as part of its Good Governance Index initiative and the work of organisations such as the Get It Right Initiative in the construction sector. However, the UK requires a productivity strategy which brings these strands together. The CQI urges the government to establish a Productivity Leadership Council to analyse productivity in the UK, to promote excellence, and to advise on government and industrial productivity policy.