Osborne says low UK productivity is a key economic challenge for the new Government

Promoted by Osborne says low UK productivity is a key economic challenge for the new Government


The Chancellor’s speech to the CBI (19th May) highlighted that the UK faces a “productivity puzzle’ and that ‘frankly, nobody knows the whole answer’”

According to the National Office of Statistics (April 2015) the UK’s per capita productivity is more than 30% lower than the US and Germany.  This is clearly a ticking time-bomb and threatens the Government’s recovery programme and the UK’s future economic prosperity. 

Prophetically, the 'father of management' Peter Drucker foresaw the present crisis as long ago as 1993 in his seminal book ‘Post-Capitalist Society:


“The biggest challenge facing twenty first century employers will be increasing the productivity of knowledge and service workers”

Drucker not only predicted the problem – he also offered a key element of the solution:

"Organisations can no longer be built on force; they must be built on trust"

The real productivity issue is actually a trust issue – trust in every aspect of 21st Century living is at an all-time low.  In terms of organisational development Drucker saw that a new, trust-based management paradigm would have to replace the old, control-based one if organisations in the knowledge economy were to sustain high employee engagement and productivity. Why?  Because there’s a predictable cause and effect chain...

employee trust > engagement > discretionary effort > productivity

So, yes, trust is the big issue today. It’s why The Rules of Engagement white paper proposed that  'Engagement is founded on trust' .

All the evidence points to one key fact about employee trust - the pivotal role is played by a person’s immediate line manager, team leader or supervisor.  As Marcus Buckingham famously wrote, “people join companies, they leave managers!”  (First, break all the rules)

Given the organisational imperative today of maximising the potential contribution of every employee, management training should focus on developing the skills to engage with each team member and create a trust-based team climate, should it not?

The reality is, however, that in general this is simply not happening.  Management training remains focused on systems, processes and procedures – people-skills are generally still being neglected. As a result, the last-Century model is still largely the norm in organisational life; hierarchy, bureaucracy, command and control.  This is perhaps the major factor in the current all-time lows we are seeing in employee engagement and directly associated productivity levels.

This recognition was why the NextGen Manager Programme was developed.  This video clip offers an insight into why we believe that a new approach to managing people is needed.

The NextGen Manager Programme has helped many hundreds of managers at all levels, from the Boardroom to the first line, to develop better people engagement and performance.  We would be pleased to discuss with you how it might benefit your own organisational development.

For information call Neil Anderson, Lead Consultant, at Foundation House, 024 7641 1288


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