Productivity Improvement Requires Guts!
This post, Productivity Improvement Requires Guts, begs the question, whether today’s leaders have the courage to build sustained continuous improvement and not just focus on pocketing the quick buck.
When will they learn? Productivity Improvement Requires Guts goes beyond simply taking costs out. In fact, cost-cutting should be a secondary consideration.
Leaders with guts stand up at the annual general meeting and announce:
1. “Total costs are likely to remain as they are for the short-term!”
2. “We put our money behind our people as we truly believe in their abilities and potential.”
3. “The focus is on making our assets sweat, keeping our processes flowing while delivering the right quality.”
Radical? I think not! So many leaders today talk efficiency or productivity, but time and time again seem to take the easy route and just ‘cut costs’. And interestingly, the easy route often turns out to be a downward spiral. A spin that is difficult to come out of.
I recently heard an experienced businesswomen use what I thought at the time was a new business term. She referred to “MEWOBs”. When I enquired, she explained the world of business nowadays seems to be filled with “men without balls”.
“MEWOBs” do not know better. It is like there were cut from the same MBA cloth. They seem to have the same “cut cost” Mantra. They miss the point that what they are really seeking is productivity, or efficiency, improvement. That means, increasing output without increasing cost input.
When it is simply about “cost-cutting” and no productivity improvements are implemented, the result is the nonsustainable structure that sees fewer people trying to get the job done that is intended to be done by more. This sets the spinal off.
Yes, there is a place for ‘cost cutting’, when done correctly in the right places. Often the right place is where the real fat is hidden in an organization, amongst layers of bureaucracy where decisions are slowed down and information flows like syrup.
Of course, unusual circumstances may warrant cost reduction efforts. But typically it is not considered an unusual situation when a company’s share price or profits are healthy.
To sustainably create value, you and I know, that it is about solving problems, taking advantage of opportunities, and improving performance on the ground where it is presented. Business 101 tells us that every person in the company should be on the same page, in this case on a performance improvement mission.
A word of warning. The last thing you want on such an improvement mission are people running around aimlessly wanting to achieve something. That simply leads to power-plays, misrepresentation of the facts, and confusion resulting from a ‘fire-aim’ approach.
Instead, here we are referring to a coordinated effort supported with the usual objectives, measures, and governance mechanisms. But one that truly engages, empowers, and equips everyone to get the job done.
Seen from the top-down, guidance is given by offering a compelling big picture of how value is created. Seen from the bottom-up, everyone owns a part in creating value continuously.
Productivity Improvement Requires Guts and it does not take fancy strategies or awesome PowerPoint slides. It simply requires leadership’s belief in ‘productivity improvement’ as a sustainable approach to value creation. And it takes guts and grit to see it through without straying to the simpler way of quick wins but long-term value destruction.
Why then is taking the gutless, unimaginative, easy path so often tolerated? Why do so many leaders not live “Productivity Improvement Requires Guts”?