I would like to explain the “WHY?” of this blog. Why focus on productivity?
Well, let Michael Porter explain it better than I:
“Competitiveness is defined by the productivity with which a nation utilizes its human, capital and natural resources. To understand competitiveness, the starting point must be a nation’s underlying sources of prosperity. A country’s standard of living is determined by the productivity of its economy, which is measured by the value of goods and services produced per unit of its resources. Productivity depends both on the value of a nation’s products and services – measured by the prices they can command in open markets – and by the efficiency with which they can be produced. Productivity is also dependent on the ability of an economy to mobilize its available human resources.
True competitiveness, then, is measured by productivity. Productivity allows a nation to support high wages, attractive returns to capital, a strong currency – and with them, a high standard of living. What matters most is not exports per se or whether firms are domestic or foreign-owned, but the nature and productivity of the business activities taking place in a particular country. Purely local industries also count for competitiveness, because their productivity not only sets their wages but also has a major influence on the cost of doing business and the cost of living in the country.”
So productivity leads to competitivness which leads to prosperity.
Productivity is about the effective and efficient use of all resources.
– Doing the right thing (effectiveness)
– in the right way (efficiency)
– all the time (occupancy).
The only way poor quality can happen is if you do the wrong thing, or the right thing in the wrong way, or if you don’t do the right thing in the right way all the time.
Resources include time, people, knowledge, information, finance, equipment, space, energy, materials.
The real responsibility for productivity or performance improvement should be largely in the hands of those organising the work rather than the individual worker.
