JAMAICA'S PRODUCTIVITY DISASTER REQUIRES TRANSFORMATIVE LEADERSHIP
By Keith Collister
Jamaica Observer | Friday, November 13, 2009
It is not possible to overstate the importance of the Jamaica Productivity Centre's three-day seminar that ended yesterday. Even the phrase 'productivity disaster' used in the headline does not do justice to the key conclusions of the Jamaica Productivity Centre's Productivity Summary Report, as it is also an economic, social and human disaster for Jamaica.
Over the 35-year period covered by the report, between 1972 and 2007, the productivity of the average Jamaican worker has declined at a rate of 1.3 per cent each year. Even worse, the fact that the rate of decline had doubled to 3.4 per cent per annum in recent years shows that not only are we going in the wrong direction, we are actually speeding up in the wrong direction.
As a clearly related consequence, the Real Gross Domestic Product (GDP) per person in Jamaica in 2007 was only 90 per cent of the level attained in 1972.
Many would respond that the report only confirms what those who were prepared to look at Jamaica's economic performance objectively had long known - namely that we have a severely unproductive economy.
The timing of the JPC's seminar, themed "Transformation for sustainable competitive advantage", in the midst of our most severe economic crisis since the 1970s, is impeccable.
It was therefore appropriate that the keynote speaker, Newfield Networks' Daniel Newby, appeared up to the task of outlining transformative leadership. Defining a leader as someone who "declares a future that others commit to", Mr. Newby outlined the difference between the old pyramid organisational structure, with a godlike Pharaoh at the top, and the new network model that has emerged, where one interacts with people over which one doesn't have direct control. Consequently, instead of issuing commands, this requires that individuals use language, emotion and presence to attract people to your vision.
Most organisations are, of course, a hybrid of people you control organisationally, and those that you don't control. A classic example of responsibility without authority is the typical project manager, who has enormous responsibility and absolutely no authority. A project manager needs to be in a position to make people want to help complete the project ("an influencer") to get things done.
According to Newby, such a situation requires that we understand the power of language - requests, offers, promises - as nothing happens in an organisation without these. Without traditional authority, one needs to be masterful at building alliances, and generating emotion to get people committed.
If one thinks of the requester as a customer, and the performer of the request as the "doer", one quickly sees "somebody should do this" is not a true request. A clear request requires conditions, time and a result.
According to Newby, in the impossible ideal the best leaders would do nothing, as their job is to make other people do the work, not do it themselves. They are "customers for other people's promises/performance".
Addressing the issue of trust as an example of the enormous importance of language, Newby argued that better communication requires that trust be viewed not as a moral issue, but as a willingness to coordinate action with others. This allows a different, more specific conversation about sincerity, competence and reliability to deliver on a promise.
If one applies Newby's insight to the prime minister's recent negotiations on the Memorandum of Understanding with the unions, the prime minister could have been sincere in his desire to reach an agreement, and have the skills to negotiate such an agreement, but simply ran out of time.
Why workers won't work
There is no better local example of the problem of trust, and its impact on productivity than the research embodied in the book Why workers won't work. The author, Kenneth Carter, uses the analogy of "the early bird catches worms that are early". His key finding is that Jamaican workers perceive management to be early birds and workers to be worms, and therefore it is rational behaviour for workers not to be early.
In more concrete terms, Carter argues that the vast majority of Jamaica's labour force is highly dissatisfied, short of both monetary and psychic pay, and sees no reward or advantage in being more productive. Whilst the book was based on research between 1974 - 1988, in a side conversation Carter argues that if anything the problem may have got worse over the past 20 years.
A critical part of improving productivity is process improvement, which is driven mainly by people and technology. In the view of Alan Krul, a leader in Deloitte Consulting's Global Practice on Lean Operations, the key issue is "how do you incorporate internal and external customers into your business process".
The birth of what is now called "lean operations" began more than 25 years ago with the rediscovery by American business of the work of an American engineer, W Edwards Deming, who had gained fame in post-war Japan for his statistically driven work on quality improvement.
Now called the father of the total quality movement, Deming published a book called Out of the Crisis in 1982 at a moment when American business had lost confidence in their ability to respond to Japanese competition. Deming argues simply "If you can't describe what you are doing as a process, you don't know what you are doing."
This total quality movement evolved into the six sigma movement in the early 1980s at Motorola, still emphasising, as did Deming, the need to improve the quality of process outputs by identifying and removing the causes of defects (errors) and variability in manufacturing and business processes.
Lean manufacturing, of which the best example is Toyota's lean production system as outlined in James Womack's 1990 book The Machine that Changed the World is based on teamwork, communication, and efficient use of resources.
According to Krul, in the late 1990s the different approaches began merging into what came to be called lean six sigma, combining the reduction of variance and the reduction of waste and complexity. The focus is now on reducing waste and complexity, hence the term lean operations.
This approach emphasises process excellence, focusing on strategic projects that integrate what Krul calls "the voice of the customer".
In the old way of doing things, businesses would try to improve the different jobs they were doing, not thinking about the end-to-end process. The new way of doing things emphasises process mapping, so that one measure of the dynamism of company, in terms of productivity improvement, would be how many people are working on process improvement projects. Of course, process mapping is not managing change, which is a key part of structuring a project. Deloitte provides change management tools that provide a process improvement framework for projects that define, measure, analyse, improve, and control "high impact customer processes".