Britain Has a Productivity Problem.
Good news. Britain’s economy grew 0.4% in July. Less good news. Productivity is still barely moving.
We can fix it by lunch.
For years economists have worried about Britain’s productivity.
GDP. GVA. Output per hour.
As Lord David Sainsbury points out, productivity actually happens inside organisations.
And I think we’re trying to fix it the wrong way.
The villain is factory thinking.
It says: make every person, department and process more productive.
I think that’s precisely how you make the whole organisation less productive.
Here’s why.
Productivity is basically:
OUTPUT ÷ INPUT
Want more output from what you already have?
Find the ONE biggest thing that’s stopping it.
Goldratt called it the constraint.
I’d look in five places.
DEMAND.
Andy Burnham arrives at Greggs at 6.45am.
Mabel is crying behind the steak bakes.
“What’s wrong, Mabel?”
“Mounjaro, Andy. Nobody wants sausage rolls anymore.”
Demand is the constraint.
Don’t buy a faster oven.
And don’t give Mabel a sausage-roll target.
FLOW.
But if we thought ‘country level productivity’ it would look like this. 🤦
Scotland takes the work.
Passes it to England.
England hits its 48-hour target by passing it to Wales.
Wales needs Northern Ireland.
Northern Ireland sends it back to Scotland because somebody forgot to tick a box.
Eventually Margaret in Guernsey sorts it.
Everyone hit their target.
Nothing was productive.
That’s factory thinking.
Optimise every part and assume the whole will improve.
It won’t.
CAPACITY.
The constraint every other constraint wants to be.
The constraint of constraints.
It gets all the fame.
“We need more people.”
Maybe.
Unless the people you have are fixing poor work, chasing things, waiting or working on the wrong stuff.
DEPENDENCIES.
They’re the teenager of constraints.
Sometimes you are always waiting for someone you can’t control.
MONEY.
Sometimes you really don’t have enough.
Then Eli Goldratt once said something to me:
“There’s one constraint nobody considers.”
Management attention.
And there’s the problem.
Every other constraint needs leadership attention to fix it.
But leadership attention is finite.
Read that again.
Factory thinking squanders it.
37 initiatives.
14 priorities.
Every department improving.
Every KPI monitored.
Every target reviewed.
Everyone busy improving everything.
THE ONE THING RULE.
STOP IMPROVING EVERYTHING.
FOCUS ON THE ONE THING.
The weakest link.
See the organisation end-to-end and then Find the ONE thing constraining the whole.
Put leadership attention there.
Fix it.
Then find the next ONE thing.
That’s the secret.
The problem isn’t that our people aren’t productive enough.
It’s that factory thinking has leaders looking everywhere except where productivity is being lost.
You don’t need more management attention.
You need to stop wasting the attention you already have.
There we are.
Britain fixed.
11.47am.
Margaret can go for lunch.Good news. Britain’s economy grew 0.4% in July. Less good news. Productivity is still barely moving.
We can fix it by lunch.
For years economists have worried about Britain’s productivity.
GDP. GVA. Output per hour.
As Lord David Sainsbury points out, productivity actually happens inside organisations.
And I think we’re trying to fix it the wrong way.
The villain is factory thinking.
It says: make every person, department and process more productive.
I think that’s precisely how you make the whole organisation less productive.
Here’s why.
Productivity is basically:
OUTPUT ÷ INPUT
Want more output from what you already have?
Find the ONE biggest thing that’s stopping it.
Goldratt called it the constraint.
I’d look in five places.
DEMAND.
Andy Burnham arrives at Greggs at 6.45am.
Mabel is crying behind the steak bakes.
“What’s wrong, Mabel?”
“Mounjaro, Andy. Nobody wants sausage rolls anymore.”
Demand is the constraint.
Don’t buy a faster oven.
And don’t give Mabel a sausage-roll target.
FLOW.
But if we thought ‘country level productivity’ it would look like this. 🤦
Scotland takes the work.
Passes it to England.
England hits its 48-hour target by passing it to Wales.
Wales needs Northern Ireland.
Northern Ireland sends it back to Scotland because somebody forgot to tick a box.
Eventually Margaret in Guernsey sorts it.
Everyone hit their target.
Nothing was productive.
That’s factory thinking.
Optimise every part and assume the whole will improve.
It won’t.
CAPACITY.
The constraint every other constraint wants to be.
The constraint of constraints.
It gets all the fame.
“We need more people.”
Maybe.
Unless the people you have are fixing poor work, chasing things, waiting or working on the wrong stuff.
DEPENDENCIES.
They’re the teenager of constraints.
Sometimes you are always waiting for someone you can’t control.
MONEY.
Sometimes you really don’t have enough.
Then Eli Goldratt once said something to me:
“There’s one constraint nobody considers.”
Management attention.
And there’s the problem.
Every other constraint needs leadership attention to fix it.
But leadership attention is finite.
Read that again.
Factory thinking squanders it.
37 initiatives.
14 priorities.
Every department improving.
Every KPI monitored.
Every target reviewed.
Everyone busy improving everything.
THE ONE THING RULE.
STOP IMPROVING EVERYTHING.
FOCUS ON THE ONE THING.
The weakest link.
See the organisation end-to-end and then Find the ONE thing constraining the whole.
Put leadership attention there.
Fix it.
Then find the next ONE thing.
That’s the secret.
The problem isn’t that our people aren’t productive enough.
It’s that factory thinking has leaders looking everywhere except where productivity is being lost.
You don’t need more management attention.
You need to stop wasting the attention you already have.
There we are.
Britain fixed.
11.47am.
Margaret can go for lunch.
