Professor Danny Samson, the University of Melbourne
Our media continues to devote kilometres of space to “Australia’s productivity issue” but not one has proposed solutions. The ABS and Grattan Institute’s figures show that existing approaches have not delivered at any time in the last decade. Productivity has been flat or has declined in each year. Australia needs to look somewhere else for answers – but where?
Meanwhile the debate rages between policy settings and workforce flexibility and the need to concentrate on skills development and closer management. These four factors are doubtless important but surely beg the question – where is the productivity gain going to come from? Doesn’t its nature need to be understood so that the policy settings and training can be designed to support it and management understand where to focus their effort?
The impression given is that no one has the slightest idea of what we need to do differently to deliver a lift in productivity, to catch up for lost time – at least 15 per cent. A cartoon in The Australian on 3 November 2012 seemed to sum up the present situation completely. The caption was, “Surely somewhere on this continent we’ll find a huge deposit of productivity”.
There is an answer: it does address the need, it can be applied now and it lies hidden in plain sight in every organisation. While business and political leaders squabble over what to do, the downturn is biting. Public and private sector organisations are again, as in 1993, repeating the same old mistakes, but there is far more at stake now. They are curtailing hiring, and many are downsizing and outsourcing across the full spectrum of business and commerce. The workforce, that is the staff and junior/middle management, are copping it again because they have no power to resist. Redundancy announcements appear to be on the increase and vacant positions are not being filled, but the work still needs to get done. Perhaps the management thinking is: I’m not sure how, but surely the remaining workforce will cope. After all they got us through last time.
In case no one has noticed, the world has changed in the last twenty years. Stress-based work claims are skyrocketing as never before and are now the second most common cause of workplace compensation in Australia, second only to manual handling. Further, evidence from the petroleum, asbestos and tobacco industries (to name just a few) suggests that damage inflicted even inadvertently on employees will just simply accumulate until the bubble bursts and then the litigation will begin in earnest. This is a time bomb this generation of managers seems determined to go on constructing.
What is driving stress levels up? We have all experienced sudden increases in workload when a colleague leaves or falls ill. Perhaps our input doesn’t arrive in the way we expect it, so we have to chase it up – extra work for us. Maybe it isn’t correct or complete, so we have to contact the provider to get the right information. Maybe the provider is not available or is new in the job: more work for us to do. Sound familiar?
Doing the extra work in exceptional situations is probably OK, but being imposed permanently as the downsizing program takes hold is very different. And it is not always because of downsizing.
The world is becoming more complex and more regulated and the consequences creep insidiously into every organisation increasing our workload slowly but surely. It is the “boiling frog syndrome” again but the difference is that everybody is aware of the gradual but unstoppable increase in their workload. Further, we are all customers to someone and most of us will admit that our expectation of our suppliers is trending upwards. In turn, our customers expect more from us and thus increase our workload. We really do need to do more to redress the situation – and to do it soon.
So let’s imagine a business with lots of potential to dramatically lift productivity and customer service. It is an organisation – perhaps a government department, a financial services institution, a distribution company, a hospital or a not-for-profit. In this business, 49 per cent of the time spent by management and staff carrying out routine activities has never been documented but they have to use this time to deal with everything they receive. The consequence is that these activities have never been properly scrutinised. Further, most of these activities have been “invented” by the most junior staff in the organisation, workarounds to fix up things so they can process the work that they were hired to do. So these workaround activities have not been designed with an eye on the strategy. Instead, expediency ruled supreme, they did what they could. So imagine: you have just joined this organisation. What an opportunity it presents to you to make your mark and shine! You can see the need to get some information on all this undocumented work. It just must yield productivity gains. However, you dismiss the thought. This is not a real organisation – it is only a figment of our imagination.
Of course the recent downsizing program will have exacerbated the situation. No provision could possibly have been made for undocumented, unacknowledged activities because management was not aware of them. So the unacknowledged work carried out by the staff and managers made redundant will have landed on the shoulders of those who remained – the very people who “managed last time we downsized, didn’t they?” Their work days have extended and their stress levels have scaled new heights.
Let’s just stay with this mythical organisation a little longer to illustrate what real opportunity looks like. Of the 49 per cent of activity which has never been documented, fully two-thirds is spent:
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chasing missing information
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completing partially finished work
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correcting errors
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seeking routine authorisation
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for transactions
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or dealing with the consequences
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of previous delays and errors.
In other words, the staff and management spend on average one and two-thirds days in every five days worked dealing with prior errors, omissions and delays. What a rich opportunity this would offer not just to productivity; the elimination of delays and errors would dramatically lift customer service and the business’s responsiveness.
With so much time spent checking, chasing, correcting, completing and dealing with consequences there is no doubt that staying back working late and stress will be endemic. Again, wouldn’t it be terrific to work in a business with so much potential, so much opportunity to make everyone’s life less stressful as well as lift productivity and customer service performance markedly?
Finally, to really get you salivating, there is lots of scope to identify the opportunities quickly. In these days where massive data handling capabilities are available to all supported by smart PC – based analysis tools, this organisation is still relying on work (process) analysis approaches which were first used in the 1960s, nearly sixty years ago. They are still using butchers’ paper (or its electronic manifestation) to map their increasingly complex business processes. What they are starting to realise is that what they are really producing is a statement of what people should do, not what is actually done in the real world.
By now you will have smelt a rat and seen through our little deception. Of course the organisation we are describing was never a figment of our imagination. It may even be the one which you know well, that is, the one in which you spend most of your working life. The figures quoted are a direct outcome of research into 1171 applications of an obvious, but new and easily used process diagnostic called interface mapping in household name organisations. The data, signed off by the 13,657 staff and managers in the sample, i.e. those actually doing the work, shows that 49 per cent of people’s time is indeed spent working in the informal systems, primarily in workarounds and error management. Much of this undocumented activity is what we call interfacing activity noise (the five Cs – chase, check, complete, correct, and deal with the downstream consequences). The analysis of the database of395,832 activities reveals that this noise absorbs fully 33.6 per cent on average of everyone’s time across the 117 organisations.
Now we would be the first to admit that there are hundreds of causes of these interfacing activity noise activities in every organisation. However, our research shows that comparatively few go viral and these are the ones to concentrate on. So by accumulating the resource impact by causal factor, it becomes straightforward to isolate those which cause eighty per cent of the damage to customer service, productivity and stress. Further, and perhaps surprisingly, a number of no-capitalinvestment changes will certainly contain these viral attacks – preventing them from entering the organisation(s) in the first place. The result delivered? A 15-20 per cent productivity lift accompanied by massive customer service benefits and staff workplace stress relief. The timescale – no, not six to twelve months – just three weeks to get the data and two weeks to analyse it to pinpoint the top ten drivers in your most strategically critical business process, and the staff will love it.
So organisations today face a stark choice. The first option is to weather the storm as last time. Cut back resources and hope to hold on to your market share until times get better – hardly a risk-free strategy when there are hordes of organisations in China and India just waiting for you to give them another opening. The alternative is to take advantage of the downturn and treat it as an opportunity to lift productivity and start on a path which will enable your business to catch up with the best in the world.
So the questions to answer are: Can you afford to ignore a 20+ per cent, no capital investment, productivity lift? Can you sleep soundly knowing that activities which absorb about half of your people’s time exists below the radar, undocumented and unscrutinised, wasting up to a third of your peoples’ effort and wrecking customer service while raising stress levels? Are you comfortable that you don’t have access to this missing information which, had you had it, would allow you to pinpoint the causes of your productivity and customer service failings and, in addition, allow you to minimise the risk from the ticking time bomb of work related stress?
If the answer to any of these questions is “no”, it might be worth investing three weeks in understanding some or all of your interfacing activities and then consider the question of how to empower your own staff and management to change their processes to put the business on a fast track to world best practice.
Professor Daniel Samson
Chair in Management, Management and Marketing – The University of Melbourne
