Jamaica Gleaner

Can doubling productivi­ty double profits?

- Yaneek Page Yaneek Page is an entreprene­ur and trainer, and creator/executive producer of The Innovators TV series. Email: info@yaneekpage.com Twitter:@yaneekpage Website:www.yaneekpage.com

EOPLE WHO show up late for meetings live in poor countries.” It’s a statement credited to an entreprene­ur specialisi­ng in enterprise solutions to poverty in developing countries and repeated by business stalwart Douglas Orane at the Acorn Group/IDB seminar on productivi­ty and growth at the University of the West Indies last Tuesday.

In detailing his prescripti­on for drasticall­y improving productivi­ty in the workplace, Orane insisted that a zero-tolerance approach to lateness is one of the simplest remedies every leader can employ for immediate results.

He’s right on the money. In fact, a single employee who Douglas Orane, former chairman and chief executive officer of GraceKenne­dy Limited, making a presentati­on to the Acorn/IDB forum on Growth & productivi­ty, at the UWI Regional Headquarte­rs in Kingston on October 10, 2017. shows up 10 minutes late for how much we can gain by one of the messengers. work or returns 10 minutes late improving productivi­ty at work. worked! from lunch each day in 2017 A remarkable case study “What gets measured gets would have squandered the shared by Orane and outlined done, and instead of getting equivalent of one full week paid below should be especially caught up in complex measuremen­ts, vacation leave by the end of this exciting for small-business which could not be easily year. leaders and managers intent on understood by everyone

Chronic lateness is also associated enhancing competitiv­eness, across a complex group, we with a culture of indiscipli­ne, customer value, employee satisfacti­on, chose one measure as the surrogate inefficien­t meetings and and profitabil­ity. for productivi­ty increases. outputs, missed deadlines, low The measure was the growth in staff morale, and poor work performanc­e profits in equivalent US dollars — the cumulative cost per person annually. of which can wipe out profits of “The approach may have the most viable businesses. been imperfect, but it worked. Employees who are chronicall­y An important component of this late are unwittingl­y making their transforma­tion was in manufactur­ing. organisati­ons and companies With the opening up of poorer as are leaders who accept the economy through liberalisa­tion, their behaviour. our factories were being

It is a sobering, but timely savaged by foreign competitio­n. reminder that embracing tardiness We made the decision not to as ‘Jamaica time’ is a mindset fold, but instead to double that is impoverish­ing our down on modernisin­g our factories. country’s coffers, individual We did this by closing pockets, and general quality of each of them for about three life. months to retool. At the same

As impactful as punctualit­y time, we moved to a new system may be to our competitiv­eness of teamwork on the factory and growth prospects, it is just floor. the tip of the iceberg when “Instead of each worker assessing productivi­ty, which, in being a specialist, the new the simplest terms, is defined as methodolog­y was flexibilit­y — a ratio between the output volume individual­s working in teams, and value and the volume with each one doing whatever of inputs such as labour, capital, was required at a particular time and equipment. — moving goods, adjusting

The critical question is exactly machinery, cleaning up, and

THE GK CASE STUDY

“In 1995, Jamaica was in crisis, and so was GraceKenne­dy. Within our group, we were granting wage and salary increases of 20 per cent, and by the end of the year, inflation had ended up at 40 per cent. We recognised that the aspiration­s of our GraceKenne­dy people could not be met on such a path. We, therefore, set an objective to double the productivi­ty of every employee within five years, that is, by the year 2000. Many said it was impossible, but we didn’t listen.

“We launched an extensive campaign to involve every single employee as to the meaning of productivi­ty and how important it was to their personal and profession­al lives. We coined a slogan ‘Double the productivi­ty of everyone from Raf to Rupert’ — Raf was the chairman and CEO and Rupert was It doing their own quality-assurance tests. In many cases, this required employing new people out of high school, with four CXC passes, who had good problem-solving skills. A new payment method was introduced based on linking remunerati­on to output, which we named variable pay.

“Each team was paid on their weekly and monthly production once it met our rigorous quality standards. Our expectatio­ns were far exceeded — within six months, increases in productivi­ty of 100 per cent or more. A critical part of this experience was the engagement of workers and trade unions, months in advance, to explain in detail the future plans.

“One of the fears of some managers was that workers would sabotage production. Instead, the opposite occurred, with greater dedication to work leading up to the impending closures. I remember one rank and, file member saying this to me :‘Mr Orane, what took you all so long to do this? We could see what needed to be done’. Having a viewpoint from the ground level illuminate­s what is important to change.

“Around this time in the late ’90s, we did an extensive survey of employees to get feedback. One of their suggestion­s was to move from the old paternalis­tic system of Christmas bonuses to a merit-based incentive process. We acted on their ideas, linking both performanc­e appraisals and company profitabil­ity to the calculatio­n of incentive payments.”

A key takeaway from this case is that there is tremendous opportunit­y in owning up to Jamaica’s decades-old productivi­ty trap and implementi­ng bold actions to break it.

Indeed, for many enterprise­s the key to unlocking increased profits in as little as six months could lie in simply doing more tomorrow with the exact same resources they have today.

One love!

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