Introduction from Charlie Mayfield:
Join the Productivity Movement
Productivity is vital. Yet the UK’s productivity trajectory
is flat – so now it’s time for action. By building a
dynamic movement involving thousands of businesses
we could add as much as £130bn in Gross Value Added
(GVA) to the UK economy each year.
Productivity drives growth as well as increasing social
prosperity and improving living standards, but Britain
never recovered from the global crisis and recession
that followed. Now the turbulence following the vote
to leave the EU risks even more economic uncertainty.
If productivity growth was important before the Brexit
vote, it is crucial now.
The resolution to our lacklustre productivity must come
from us: the business community. And it is time for
concerted action. The routes to improvement are many
and varied but they all depend on strong ambitious
business leadership and enduring action on the ground.
We see the potential in business-driven, “bottom-up”
change and continuous improvement among individual
businesses. Our analysis confirms that productivity
should – and could – be better in businesses of all sizes
and sectors, with a dramatic potential £130bn boost
possible each year.
The question is how? The answer is
What is
Be the Business?
Be the Business:
• Is the catalyst for transforming British business culture.
•A
ims to help achieve long-lasting performance improvements in companies of all
sizes, across all sectors.
•P
rovides training, tipping and tools, including an invaluable benchmarking survey,
and a focal point for businesses.
• Aims to increase the number of well-run UK businesses.
A business-led movement that operates across the UK, Be the Business is focused
on sharing practical solutions. This requires thousands of businesses to join the
movement to create a better Britain. With your help, the movement will grow fast.
By encouraging more businesses of all sizes and sectors to understand their current
performance and actively seek out ways to improve, good businesses can become
great ones, with the substantial rewards that brings.
If we can raise the achievements of all businesses even just a little then this will
improve the UK economy and the standard of living for the nation’s population.
“
Everything starts with engagement. Making productivity
into something positive and aspirational will encourage
businesses to care about it and strive to improve it.
It’s time to
kick it up
a gear
”
One way to achieve this is for businesses to understand
how well they perform relative to their peers, so we have
developed tools that enable businesses in different sectors
to do that quickly.
We have developed immediate ways of helping businesses
identify and access support to improve their practices. These
include addressing management and leadership, innovation,
digitisation, work organisation and measurement.
If we are to learn from successes in other countries, the
movement itself needs sustained business leadership. We
have the advocacy of some of the UK’s most senior business
leaders and we are confident we will make a difference.
The first examples of activity that will make up the
movement are under way. The response of partners to
this work has already been encouraging including amongst
businesses, industry associations, banks, universities and
Local Enterprise Partnerships.
But to really deliver wide impact we need to secure take
up and leadership in other sectors and extend our reach
widely across the economy, linking to businesses through
established networks, trade and professional bodies, and
through supply chains.
We want to engage a broader group of businesses, trade
associations, unions, universities and business groups in
making productivity improvements.
This work is the starting point for us to make progress on
critical business issues. The invitation is now to join in,
and work together to be a catalyst for better run business
across the UK.
Sir Charlie Mayfield
Chair of Productivity Leadership Group
The Productivity
Challenge
Why we need a productivity movement
•T
he UK’s productive capacity is the single most significant factor
in driving economic growth and raising living standards.
•P
roductivity gains secured from growing businesses lead to
higher profits and wages, increased tax revenues and stronger
public finances.
•T
he impact of improved productivity is far reaching, socially and
economically.
Our research has confirmed that productivity should be better in
businesses of all sizes and across all sectors.
•T
wo thirds of UK employees work in firms where productivity is
below what is expected for its size or sector. The opportunity to
do better is across all firms – whether small, medium, large or
very large.
•A
common factor explaining the UK’s decline is the quality
of leadership and management compared to other advanced
economies. While we have world class, high performing
businesses, in far too many UK firms of all sizes management
performance falls behind the best international standards.
•O
ngoing innovation, emerging trends in digital connectivity and
the challenge of rapidly developing economies are disrupting
business models and transforming global markets.
Business productivity, by % of employees, UK and Germany 2013
16
% of employees
14
12
10
8
6
4
2
0
-200
-150
-100
-500
50
100
200
150
Productivity, difference from expected value as a percentage of peer group median
UK
Germany
Source: McKinsey & Company, Inc. analysis of Orbis (2013) data
We believe the opportunities for
businesses across the UK are
huge and could transform the UK
economy. The time to act is now –
before the productivity gap to our
international competitors widens
still further.
Key to success is better business
leadership, more ambition and
concerted, enduring action on the
ground. This means businesses
working together through active
communities they recognise in
sectors, regions and supply chains
to drive better performance. Be the
Business can be the catalyst for this.
Productivity growth before and since the onset
of the 2008-09 recession, G7 countries
US
Uk
Japan
Italy
Germany
France
Canada
-0.5
00
.5
11
.5
Average % growth p.a
2007-2014
2000-2007
Source: ONS International Comparison of Productivity, 2014
Productivity Pays
Our research shows that for many businesses, “productivity” is not
enough of a priority; many businesses don’t measure it, and, when
asked, will say they are above average in terms of performance. Yet
we trail our international competitors: for every hour spent at work, we
make 20% less than a company in Germany.
Now action is being taken in a number of core areas to secure
improvements in how UK businesses are run and to keep up with
developments in a modern economy. These include:
• Ambition: what’s the scale of your leadership ambition?
•M
easurement: does your business make use of sufficient performance
data to drive decision making?
•M
anagement: how effectively is your business managed in terms of
the development and deployment of talent, the ability to organise
work and efficient processes and operations to meet customer
demands?
• I nnovation: is your business innovative enough, not only in products
and services, but how it operates?
•D
igitisation: does your business make sufficient use of new
technology and digital applications?
• Governance and finance: is your business effectively governed?
Understanding how your business measures up to these criteria
and seeking to improve to achieve excellent results is the key to
transforming productivity and making your business the best it can be.
Be the Business aims to inform, educate and collaborate with the
businesses of Britain to restore us to the forefront of business
performance worldwide.
How good is your business really?
The five areas that businesses must address to improve their productivity
Management
Behaviours
Vision & Values
Leadership
Performance Management
Talent Development
Motivation
Talent
Management
Target Setting
Innovation
Ambition
Business transformation
Technology exploitation
Mobility
Apps
Data
Connectivity
Collaboration and security
Planning for
the future
Digital
Case Study 1
Putting employees first:
JJ Churchill
JJ Churchill is a precision engineering company employing around 120 people. As a family-owned
company, its vision is for long-term profitable growth for all stakeholders.
Believing that if employees are treated well then performance and productivity benefits will follow, it
explicitly places its employees at the centre of the stakeholder nexus.
“We put employees first because they make the fundamental difference.” - Andrew Churchill
Company values were created together with employees and behaviours illustrating these were written
by individual staff, helping them to feel key to delivering the company goals.
By emphasising employee wellbeing through methods such as delivering above average pay and
benefits, prioritising health and safety and improving performance management, absence levels have
been reduced substantially – from 6.4 per cent to under 2 per cent.
Measures were implemented to place a renewed emphasis on quality and eliminating waste after a staff
survey suggested a drop in the perceived importance of quality to the business.
“Our brand and our future will depend upon our ability to be the best at what we do.” Andrew Churchill
The company believes in open discussion across the business and devotes substantial resources to a
rigorous communication approach, promoting leader visibility throughout the plant. There are daily
shop-floor walks by the senior team, weekly unit meetings and quarterly briefings and an employee
Consultation Forum, while a suggestion scheme brings a small financial reward for ideas that are
adopted.
In an increasingly challenging market, the company believes that this emphasis on engaging the
hearts and minds as well as the skills of its employees enables it to respond with agility to new market
opportunities and new product developments.
Its explicit recognition that employees are at the heart of the business and a key asset has enabled the
company to maintain an even keel through market dislocations.
can’t put
“ You
a price on
knowing your
employees feel
comfortable in
saying they’ve
got a problem
”
Productivity through People
A unique collaboration between industry and academia, Productivity through People is an innovative
12-month programme for leaders within SMEs, wishing to “work on the business not in the
business”. By sharing critical insights for success regarding people, leadership, communications,
innovation and ultimately productivity, the objective is to create a high-performance workplace
with a fully engaged workforce.
“It’s not that people are our best asset – it’s that they are any organisation’s
only asset. Engaging employees in the mission and purpose of the company,
and really empowering them to do the job as effectively as possible, lies at
the heart of successful organisations, and as importantly is at the heart of
sustainable business success.” - Nigel Whitehead, Group Managing Director,
BAE Systems
Diving deep into productivity
PtP starts by benchmarking each delegate and their organisation. It then
uses a range of proven methods to encourage communication, reflection
and the adoption of new ideas that will enable moving from a command
and control management style to coaching of the team and individual
development. This could include internal cultural adjustment,
piloting new initiatives, creating a strong sense of respect for every
employee, mechanisms for listening effectively to the workforce and
the empowerment of
front line.
Led by the leaders
The PtP programme is driven by world-class organisations
who provide unparalleled access to their sites and senior
management, enabling delegates to receive one-to-one
mentoring, insights and solutions to challenges they
are facing within their businesses. This is supported
by masterclasses, workshops and case studies
from industry leaders and experts who have
transformed the workplace.
Planning for growth
PtP offers a blueprint for growth and
productivity in the UK. Two programmes,
designed with scalability in mind, are under
way: in the advanced manufacturing sector
in the North West delivered by Lancaster
University and in the engineering sector in
the South West delivered by University of
Bath School of Management. Discussions are
under way to facilitate the programme’s roll
out in Scotland, Northern Ireland, Wales and
other English city business hubs throughout
2017 - 2018. The core content is transferable
and, by partnering with other industry
leaders and adding to the portfolio of case
studies, the programme can be deployed to
any sector and any region using a network of
business and academic partners.
“The benefits of the PtP course started
to make themselves apparent from the
outset. The initial sessions brought
to light some key actions required to
improve our working operations, as well
as my own personal leadership style;
actions which I have already started to
implement and see the benefits from.
The main highlight has been forming a
close group of like-minded individuals
who I can trust and gain some truly
valuable opinions, best practice
examples and knowledge.” - Chris
Mayne, Operations Director, Forsberg
Services Ltd
made
“ You
your business,
but we’ll help
make it better
”
Case Study 2
Working smarter:
Geometric Manufacturing
Geometric Manufacturing Ltd is a small manufacturing company in Tewkesbury, employing around
30 people, making precision machined components for a wide range of industry sectors including
defence electronics and secure communications.
It battled through a long recession which was extended by the Strategic Defence Review of
2010. All of its customers went through downsizing, or even closed their UK operations,
having a tough impact on Geometric and similar businesses.
“We wanted to survive so we had to find ways of doing what we do better.” Paul Wenham, Managing Director
Asking staff to find ways to work smarter rather than just harder led to increased
productivity. Implementing an ongoing process of “lean manufacturing”, including
changing work practices and increasing the use of automation, shortened lead
times and reduced costs.
Establishing closer links with key customers improved the way Geometric
supply them, tying them in, resulting in a far better planning process. The
company also looked at best practice in other industry sectors to help
restart growth.
“We’re only part way down the productivity journey, and have
further to go than we have travelled so far, and Productivity
Through People (PtP) is helping me continue down the
right path.” - Paul Wenham
While no one took a pay cut, employees had no pay rises for
three years, but the company is striving to build a culture
which involves the people, makes better use of their skills
and experience and helps them to help the business
continue to improve.
This approach has reaped the benefits in recent
years, with revenues increasing on average 20%
for the last four years, on course to grow 33%
this year.
“It’s clear to see that the benefits of being
more productive do bring immediate rewards
with them.” - Paul Wenham
Now back “in the black” and making profits,
Geometric is updating its machinery and
technology, harnessing the digital manufacturing
age with software and systems. Yet it recognises
that it is harder for small businesses to take big
steps, and to find the capital required for such
investment, meaning it takes longer than desired
to improve productivity.
“PtP and the activities we’ve worked through
so far are helping me structure our necessary
on-going work. Building an enabling culture,
employing the best people and utilising
them fully is what will take us further down
the journey. PtP, delivered by people who
themselves have been through transformation
activities in businesses, imparts knowledge
that is invaluable in the work I am doing back
in my facility.” - Paul Wenham
Case Study 3
Learn from yourselves:
Fifteen Cornwall
Fifteen Cornwall is the restaurant and social enterprise
founded by Jamie Oliver in 2006. In addition to being a
popular destination restaurant it also runs a successful
apprenticeship scheme for local, disadvantaged young
people, with some 200 recruited to the kitchen to date of whom two thirds have completed the programme.
More than 90% of these remain in employment, 80% as
chefs. Jamie Oliver was the first big brand to locate to
Cornwall, it being the least developed region in England,
yet the enterprise has thrived, currently looking not only
to grow their own business, but also help other Cornish
hospitality businesses make more of their talent.
“Fifteen Cornwall was set up to change people’s lives,
so we’ve got transformation in our DNA.” - Matthew
Thomson, Chief Executive
Though not an easy time to be running a small business, a
focus on productivity over the past couple of years has seen
Fifteen boost the value of everyone’s efforts. Key to that
was learning from their own business – particularly the staff
– to improve its running. Examples such as training waiters
to the very highest standards of sommelier knowledge,
increasing the value of the customer’s experience and thus
persuading them to spend more on wine, reap benefits on
both sides: a richer job experience for the waiting team
generates more money for the business, in turn rewarding
them with better pay.
“The temptation is to look outside yourself for
solutions, but my own experience is that this is
a time to be a leader yourself in your own field
and see how your people can make you better
and stronger as businesses.” Matthew Thomson
As a charity owned enterprise, Fifteen is keen to
use its local prominence to help develop the wider
hospitality sector in Cornwall, which with tourism is
the biggest local employer. Having established how to
grow expertise in their own business, they are looking
to share that learning to strengthen the sector’s
ability to develop people, progress their opportunities,
boost pay and make hospitality a top career choice
for young people.
“With one in three Cornish families having
someone working in hospitality, if we can
improve its productivity we’re going to make
a huge difference to the local economy.” Matthew Thomson
With a minimum of 70% of its produce being sourced
locally, over the past 10 years Fifteen has put in over
£12 million to small and micro producers in Cornwall.
Working together has improved productivity and
generated more value for these businesses.
“I feel passionately that there’s a lot of room
to improve the way we do business in Britain.
There’s a need now for businesses to recognise
that they need to collaborate to add more value
to each other, and to trust the fact that if we
share our talent and skill base then we will all
flourish.” - Matthew Thomson
Be the Business: Online
bethebusiness.com
The website consists of a collaboration hub and an interactive benchmarking tool that
allows companies to measure themselves against management best practice criteria
and digital maturity.
Collaboration Hub
Hosting a wealth of invaluable content and assets, collectively this collaboration hub
seeks to help more businesses better understand what tangible steps they can take
to improve performance across leadership, talent management, future planning and
digital maturity.
The initial launch of the tool will allow companies to create a performance dashboard
that they can return to and measure their progress. Over time the platform will be
further developed to allow leaders, managers and employees in businesses of all sizes
and sectors to:
•A
ccess practical business-developed tools and products, case study examples,
articles, reports, videos and podcasts.
• Take part in events, webinars and training courses.
• Make connections with other businesses and experts for wider help and support.
• Suggest and explore ideas to enhance performance and productivity.
• Give feedback on the material’s value.
• Share examples to inspire others.
• Highlight aspects of the challenges of productivity that are not currently well served.
Benchmarking Surveys
The anonymous surveys cover four key areas:
• Leadership.
• Talent management.
• Future planning.
• Digital maturity.
Posing a series of questions for each category the
survey culminates with benchmarking data presented
in a personalised dashboard showing the respondent’s
company score together with averages for business
region, size and sector.
Users will have the ability to repeat the tool and create
snapshots to measure their scores and performance
trends over time.
Be the Business:
What next?
Today is the first release of the website and
measurement tool. We will be working with UK
businesses and the UK development community
to further develop our new measurement and
collaboration environment to drive the productivity
movement and encourage UK business to adopt best
practices that drive performance.
We want to create a business-led movement that
operates across the UK, focused on creating practical
business-led solutions fit for the challenges of a
modern, fast-changing and increasingly disruptive
modern economy.
To achieve this at scale, we need businesses of all
sizes and sectors, and other partners, up and down the
UK to come forward and get involved. By unlocking the
opportunity, we could add £130bn in GVA to the UK
economy.
How to get involved
The invitation is to join in: start by raising ambitions, measuring,
improving, innovating, and then reaching out to others to share
and collaborate.
The ideas and actions we have outlined are already supported by a wide
and diverse set of organisations.
We want to show what can be achieved when leaders set high ambitions
for their business, their industry and wider communities.
They are the vital first steps of businesses committing to work together,
work smarter and drive forward continuous improvement.
The stories and practical action we have started to develop through
this project and have begun to house in our marketplace represent an
invitation. We now invite the many thousands of leaders out there who
want their business to better compete and their country to prosper, to join
in making a change to Britain’s business climate.
There will already be wider business-led action taking place of which
we are not aware so we plan to add to the actions that we are already
developing and to evolve business engagement over time.
Feedback is key to helping us work better together to create a strong
and vibrant movement that is business-led and focused wholeheartedly
on making real improvements for real businesses up and down the UK.
To that end, we encourage you to offer your advice and comments about
how we could go about creating a better business movement that is fit for
purpose. Get in touch here: bethebusiness.com or @BeTheBusiness
The Productivity
Leadership Group
In July 2015 a group of senior business leaders started to explore what practical action
businesses can take, on the ground, to improve productivity within specific sectors of the
economy. The group includes representatives from a range of industries, and focused on
building a movement for business improvement, in a way that engages business leaders,
managers and employees.
The Group will be private sector-led and will receive £13 million in seed funding from the
Government, phased over three years, after which it will be self-sustaining.
The Group will have an advisory group and a team of around 20 staff lead by Tony Danker,
CEO Designate.
It will also draw on the expertise and advice of the UK business leaders who have contributed
to this work to date:
• David Abraham – Channel 4
• Lady Barbara Judge – IoD
• Tera Allas – McKinsey Global Institute
• Dame Fiona Kendrick – Nestlé
• Jeremy Anderson – KPMG
• Sir Richard Lambert – British Museum
• Sir Roger Carr – BAE Systems
• Prof Juergen Maier – Siemens
• Roger Connor – GlaxoSmithKline
• Sir Charlie Mayfield –
• Ian Davis – Rolls-Royce
• Carolyn Fairbairn – CBI
• Doug Gurr – Amazon
• Christopher Handscomb –
McKinsey & Company
John Lewis Partnership
• Tony Danker - CEO Designate
• Sir Mike Rake – BT Group
• Phil Smith – Cisco
• Nigel Whitehead – BAE Systems
Thanks
The Productivity Leadership Group is grateful for the practical help and
support offered by the following individuals and organisations who have
given their time, funding and expertise to launch Be the Business and its
work so far:
adam&eveDDB
HM Treasury
Amazon
Hummingbird Communications
BAE Systems
ITN
Behavioural Insights Team
Jonathan Coates
Brand Cap
BT
Cavendish Nuclear (Part of
Babcock)
John Lewis Partnership
KPMG
Lancashire LEP
Channel 4
Lancaster University
The Charity Commission
Lloyds Bank
CISCO
Longo Pongo Productions
Companies House
Manchester Growth Company
The Department for Business,
Energy and Industrial Strategy
North West Aerospace Alliance
EDF
Egon Zehnder
Rolls Royce
Siemens
FD Solutions
Single Malt Design
Firefly Digital
Slaughter and May
Frontier Economics
University of Bath
GSK
University of Strathclyde
bethebusiness.com
@BeTheBusiness