Saturday 9 March 2024

Big Isn't Always Best

 There is a universal truth that the private sector is always more efficient than the public sector - that the profit motive drives efficiency.


Larger companies have the advantage of being able to negotiate e better prices with their suppliers and have the advantage of ‘economies of scale’ with their production and delivery processes


However, things are not always what they at first seem to be. 


My personal observation, from working across the public snd private sectors  and across both small and large organisations, is that efficiency is negatively correlated with organisation size - large organisations are inefficient, small ones are generally efficient.


The reason is ‘engagement’.


In a small organisation, you as owner/ manager are directly involved with all aspects of the processes involved in delivering goods or services to your customers.   You can see each step in each process and how different processes connect with others.  You know the other managers and probably all supervisors and many of the staff. They communicate effectively because communication lines are short.


Similarly your workers are more likely to engage with your  organisation. They know their role and how and where it fits into the overall process. They know the other staff, the supervisors and the managers. They know their contribution and performance can be judged. Issues can be dealt with directly and swiftly. 


Little of this applies in a large organisation. Relationships, performance and issues tend to drift and fester. 


These advantages of engagement in small organisations can far outweigh the direct economic advantages of larger ones. 

Saturday 2 March 2024

What Is non-Productive?

A focus on productivity, and its development is a good thing - indeed, an essential thing for all organisations.

However, there is a danger that you over-focus and forget about balance.


There is a tendency to bifurcate all activity into being either productive or non-productive.  So, a worker operating his/her machine is (clearly) productive.  A worker taking a break is (just as clearly?) non-productive.


Yet what would happen if you did not give your employees any breaks. Would productivity rise?


Perhaps temporarily - until the employees become exhausted and start making errors.


Another example of this dilemma is employee training.  If your employees being trained are taken away from their machines, they are clearly non-productive.  Yet presumably you are training them so they can be more productive in the future.


So.be careful with a simple binary approach.  Think of the longer-term and consider whether non-productive time and events will have (perhaps indirect) productivity benefits over the longer-term.  


You should be optimising, rather than short-term maximising, productivity.

Saturday 24 February 2024

In Reverse

 The UK is technically in recession - it has had two consecutive quarters with negative growth. Worse, the economy has been at best stagnant for over two years and productivity has been falling.

Our Prime Minister, when he got the job, gave 5 pledges, one of which was to grow the economy.  He failed in four of them, including the one relating to growth.


What is the problem?


Putin is part of the problem.   The UK is a significant network importer of energy and Putin’s actions over the last few years have resulted in massive cost of energy rises.


One could try, therefore to defend our Prime Minister and suggest he is just unlucky in his timing.  BUT…


The Conservative Party has been in power for fourteen years and seems to have had no consistent energy strategy over that time …  so it can be argued that they are reaping what they have (not) sown.  Perhaps the global warming crisis should have made an energy crisis obvious and triggered some planning response.


The job of government in creating higher productivity is to build the infrastructure that creates the potential for higher productivity - the macroeconomic, transport, communications, energy, education and training infrastructures. 


How many of you can say that your government is doing a good job?  If they are not, what can you do?


VOTE.

Saturday 17 February 2024

Small can be (more) efficient

SMEs (Small and Medium Enterprises) have a number of problems reaching optimum productivity when comported to ‘the big boys’.  

It is harder for them to achieve the same economies of scale and hard for them to put the same pressure on their suppliers to contain costs.  They are less likely to employ consultants and advisers, yet also less likely to have their own productivity specialist on board.


Does this means that SMEs are likely to be less productive?


Well no, actually.  Small organisations tend to maintain focus on costs and cashflow, and they are ore often small enough for the owner/manager to keep an eye on all parts of the business. They also generally have shorter communication channels.  


So, they hove some inherent advantages.


This does not mean that they have no need to think about their productivity - or perhaps think about it in a more coherent and structured way.  But they can blend productivity analysis with these inherent advantages.


For example, it can be easier to practice forms of kaizen if you already have effective teams and effective communication with and between teams.  If you have effective ways of monitoring costs and cashflow, you possibly have the basis of a set of productivity metrics.


If you have a number of managers, you may be  able to use each one to review/analyse another section or department to lend an untutored and fresh eye. (If these managers are given some basic training in productivity analysis and improvement, so much the better.)


‘Use what you have to give you more’ should be your strategy and motto.


Focus on productivity as well as costs.  And take advice occasionally to get some specialist knowledge and input.


You might be efficient (relatively) now - but you can improve further!

Saturday 10 February 2024

Break Down the Silos

Silo mentality is one of the most significant obstacles to organisational success.  It has become more severe and more common during the era of hybrid working and especially remote working.

Because communication takes more effort, and is more subject to  errors and misunderstandings. when people are not face-to-face, it means that employees are often not sharing information with departments or teams as frequently (or in the same way) as they previously did.


As a result, members of a team may not fully share the purpose or operating parameters of a project, or they may be working at cross purposes on different parts of a project.


And, of course, if information is not fully shared, it is less likely that ideas will build on one another - and innovation is stifled.


It is rather obvious that in such a situation we need to improve communication in ways which reduce this silo mentality - and encourage people to engage across teams and to share a common purpose.


This has to start at the top with effective and repeated sharing of the organisation’s vision and purpose - and the contribution to be made by various groups and teams.


You should seek cooperation and alliances with other groups and teams  - to create semi-permanent communication channels with other teams.


You should also set clear objectives and SMART targets which focus their staff on outputs and outcomes.


Any signs of conflict or competition across teams has to be sorted as quickly as possible


Praise, recognition and rewards should be cross-team and reinforce collaborative links snd alliances.


If effective links can be built with members of other complementary teams in pursuit of agreed goals and a clear vision of success, silos start to disappear.  


However, you need to stay alert to the effects of residual or re-growing silos and take immediate action to destroy them, refocusing efforts of staff on what is to be achieved.


Saturday 3 February 2024

Exploit the Zeigarnik Effect

 The Zeigarnik effect describes the way unfinished tasks remain active in our mind, intruding into our thoughts and our sleep until they are dealt with, much like a hungry person will notice every restaurant and appetising smell on their way home and then lose all interest when they’ve had their dinner. You may have noticed the effect yourself during your exams in school, when you crammed before the exam, sat it, and then promptly forgot everything you had just learned because you no longer had any use for the information.

The effect is named after Bluma Zeigarnik, a Lithuanian-Soviet psychologist and psychiatrist. She tells the story that she was out for dinner one night at a restaurant in Berlin with a large group of colleagues when she noticed her waiter’s impressive ability to remember all the complex food and drink orders. After everyone had finished eating and had left the restaurant, Zeigarnik realised that she had forgotten her purse, so she walked back, found the waiter who had served them, and asked for his help. But he did not remember her; where had she been sitting?


When she asked him how he could have forgotten her so quickly, the waiter apologised and told her that he always forgot his orders (and customers) as soon as the meals had been delivered and paid for. The only way that he could do his job was to focus exclusively on the open orders he still had to deal with. This suggested that incomplete tasks remain in the mind until they are completed. Zeigarnik decided to investigate.


She conducted a series of expejriemrns and found that those who had their work interrupted were  more likely to remember what they had been doing than the participants who had actually completed the tasks.


Psychologists who followed up on on her work concluded that interrupted tasks cause ‘psychic tension which keeps the task front and centre of the brain. When the task is completed, that tension disappears and the task can be cleared from ‘working memory’.


You can force this effect by starting on a task you know you cannot complete in the current work session.  When you leave the task ,it will niggle sway at the back of your mind, prompting you to do some more work on it.  It may also have the added advantage of allowing your subconscious mind to address the issue, improving your ability to create new ideas or solve problems.


The Zeigarnik  effect also suggests taking brief pauses or rests will help your motivation to complete your unfinished tasks and will help you consolidate your thinking on the issue in hand.  Think about this and how it might change the way you assign and monitor tasks given to ataff.


Saturday 27 January 2024

Think outside the box to exploit AI

Many people - and especially pundits - are predicting significant productivity gains from the use of AI (Artificial Intelligence).


However few will say exactly how this transformation will happen.


My view is that gains will come in all sorts of places that we do not yet know about - as adopters realise just what AI can do.


But here isa  little teaser.   We know (or at least I do - but I’m sure you do too) that productivity is enhanced by the skills of the workforce - the more their skills are developed, the more they are likely to contribute to increased productivity.


At the moment firms often use an appraisal process to identify training needs but imagine how AI could be used to identify those needs and then identify solutions to meeting those needs..


AI should be very good at deriving personalised pathways through complex and varied learning resources and opportunities.

I suspect many of the gains of AI might be around similarly indirect activities, so you need to think outside the box to identify what may be non-core application areas.

EvanCarmichael.com