Productivity has become the UK government’s core economic problem. The apparent health of the UK economy – low unemployment and commendable job creation – masks a dangerous and growing productivity deficit between ourselves, the US and our principal European trading partners. In short Britain has more work, but the majority of our workplaces aren’t especially productive.
Nor are they especially happy. On April 8, when The Industrial Society became The Work Foundation, we released research showing that the level of genuine worker satisfaction with their prospects, pay levels, hours worked, and workload have all roughly halved, and some from a very low base. The largest fall has been in satisfaction with working hours. The next largest has been in satisfaction with workload. Perhaps worse still, there is not a single item defining the core of their economic and psychological contract on which satisfaction levels have not deteriorated. The accepted solution to the productivity challenge has been to focus on the input base and supply side of the economy – investments in new technology and people, and the growth of knowledge work for example. That these have not generated the step changes we have been led to expect indicates that the story is only being half told and that it may be time for British business to listen to the rest of the narrative.
The Work Foundation’s contention is that poor productivity and workplace organisation that leads to disaffected workforces are different sides of the same coin. In practice it means the workplace has to be organised to bind workers – along with managers, shareholders and other stakeholders – into a common vision, the resulting commitment to the organisation’s performance becoming the fulcrum of the business rather than immediate high returns to shareholders. Unfortunately in too many British organisations, the toolbox of social capabilities that would help to produce such an outcome – time and place sovereignty for workers, recognising and rewarding their creative potential, service-centred leadership, a coaching culture and social responsibilities – are dismissed as ‘soft’ against the ‘hard’ proposition of maximising the bottom line. The paradox is that those companies that are built to last and generate sustained profits all instinctively find ways to boost employee commitment by taking such ‘soft’ propositions seriously. This does not mean that they have to behave in an uncompetitive, altruistic manner – the marketplace forces tough decisions and uneasy passages at some time in most organisations’ lives – but it does mean that they engage with their workforce and its needs as part of building their business. It also means that progressive profitability must replace simple financial profitability as the sole yardstick of business success.
If our business leaders could take this on board, it would constitute an important breakthrough that would make two vitally important improvements to the economy and to the work environment – it would lift our productivity and reverse the declining morale of our workforce.
Corporate Citizenship Briefing, issue no: 63 – April, 2002
Will Hutton is Chief Executive of the Work Foundation (formerly the Industrial Society), and a former editor of the Observer. From 1990 to 1996 he was economics editor of the Guardian. A former stockbroker, he spent ten years with the BBC and from 1983 to 1988 was economics correspondent for BBC 2’s Newsnight.
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