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Closing the productivity gap through process excellence

The Bank of England’s Chief Economist recently commented that just as “most car owners believe they are above average drivers, most companies might well believe they have above average levels of productivity”. If the current ‘productivity crisis’ in the UK can be attributed to a lack of awareness of how to measure and improve productivity, then what can be done about it?

A multi-ethnic group of business associates are working on a creative design board in the boardroom. They are mind mapping with post it notes.

This is certainly a problem worth addressing because, if for nothing else, it is estimated to cost the UK alone some £19.3 billion a year. But beyond the financial benefit, implemented correctly, improving productivity can also bring enhanced quality of products and services, increased employee engagement and improved customer satisfaction. Through our research and teaching, we work with leaders of organisations who have recognised and addressed this management challenge. Here is our summary of the things that we observe have impact:

  • Great things are done by a series of small things brought together*. Don’t feel overwhelmed with the challenge of increasing productivity or managerial performance. Make consistent, aligned changes and you will soon start to see significant improvements. Start small with training, mentoring and on-the-job learning initiatives. The Delivering Process Excellence programme at Cambridge emphasises that the key to success is to state your intentions in a coordinated way, and follow through with actions that can be measured for success.
  • Scan your horizon. If you’re serious about improving your managerial capabilities look beyond your immediate industry and investigate other businesses that are leading the way on productivity. Benchmarking is an effective way of giving yourself a corporate reality check and is a process we promote and enable on the Delivering Process Excellence programme.
  • Human nature enhanced by digital solutions. Digitalisation represents a significant opportunity to manage and improve performance. But we must also balance the application of technology with investment in the development of the current workforce – many of the best ideas for improvement come from those who work within the process. The Delivering Process Excellence programme focuses on individual, sustainable learning and offers every participant the opportunity to leave with a proven toolkit of knowledge that will help them improve their own organisation’s effectiveness and productivity.

The theory of process excellence, underpinned by methods of both “lean” and “six sigma”, are the hallmark of organisations that successfully achieve productivity improvement in support of their wider business objectives.

* attributed to Vincent Van Gogh.

Benn Lawson is the Director for the Centre of Process Excellence & Innovation at Cambridge Judge Business School. Jane Davies is Director of the Cambridge MBA at Cambridge Judge Business School. They are co-authors of Process Theory: The Principles of Operations Management (Oxford University Press) and co-direct the Delivering Process Excellence: The Lean Six Sigma Green Belt Certification programme.