Talking SME Podcast: Improving Productivity in the Workplace

Our latest guest on Ten2Two’s Talking SME podcast is Linda Garcia, owner and founder of Alluxi Consulting Ltd. In this episode ‘Improving Productivity in the Workplace’, we discuss productivity trends, the impact the pandemic and working from home have had on productivity, and steps that business leaders can take to improve productivity in the workplace.

A bit about Linda

Linda has more than thirty years experience in project formulation and application. In other words, the design, development and implementation of management control systems to achieve significant productivity and performance improvement and profitability.  She has worked at Board level to define business plans to enable short term initiatives to be fine-tuned to longer-term strategies, right down to the shop floor supervisory levels. Designing and delivering management and supervisory training and development workshops, ensuring the whole organisation is aligned to the behaviour change required to improve performance.

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‘Improving Productivity in the Workplace’ is just one in our series of podcasts where we talk about a wide range of topics. We talk with business experts, and also offer broad insights to help SMEs become more successful.

Don’t forget to check out our other Talking SME Podcasts here.

Business Productivity Resources

Linda has very kindly made the following information available for our listeners to download, just click the link for each one to access.

Survey tool – https://www.engagementmultiplier.com/en-gb/partner/alluxi/

Useful blogs:

https://alluxi.co.uk/what-is-a-management-control-system-the-21st-century-rewire/

https://alluxi.co.uk/looming-culture-crisis-employee-burnout/

https://alluxi.co.uk/reducing-the-impact-the-covid-productivity-tax-on-your-business/

The Great British Productivity Swindle – 3 Painful Truths:

https://alluxi.co.uk/great-british-productivity-swindle-3-painful-truths-no-1-business/

https://alluxi.co.uk/great-british-productivity-swindle-3-painful-truths-no-2-manager/

https://alluxi.co.uk/great-british-productivity-swindle-painful-truths-no-3-employee/

https://alluxi.co.uk/business-blooming-summer-boosting-productivity/

Transcript

Tracey Adams (00:04):

Hello, and welcome to talking SME our quick fire chat with business leaders. I’m Tracey Adams. And today I’m pleased to welcome Linda Garcia, a business productivity specialist and founder of Alluxi consulting. Welcome Linda.

Linda Garcia (00:17):

Good afternoon. Hi Tracey.

Tracey Adams (00:17):

You and I have had some really interesting conversations about productivity over the past couple of weeks. And whilst we’ve been talking, we’ve started talking about how the pandemic has affected productivity. We’ve ended up looking at it from a much more global and historical perspective, too.

It would be really helpful, I think for SME business leaders and owners listening, if you could share some of your thoughts on improving productivity in the workplace. So to our first question, let’s start with the overall picture of productivity. How are businesses in the UK managing productivity?

Linda Garcia (00:58):

Yeah, we certainly got into the worldwide productivity conversation on this and obviously this being my specialization. It’s something that I’ve been watching and monitoring and writing and blogging about. And the UK, historically is always thought of as the manufacturing heart of the world, you know we used to have quite a solid manufacturing base. Our industries were booming. But possibly since the start of the nineties, our productivity was steadily increasing. And when we got to the last recession, sort of 2008, 2009, that’s when we started to see a real sort of slowdown in the economy and a downturn in our productivity levels.

My personal opinion is, around that recession time, we started to bring in a lot of cheap labour, which meant that business owners were easily able to bring in more people than maybe they would have done otherwise.

Linda Garcia (02:01):

If the markets into like the Eastern European labour markets hadn’t opened up, those sort of cultures were happy and willing to come into the UK and earn much less than the national living wage that we’re now appreciating. Obviously they were still on national minimum wage. And that tended to sort of give business owners a full sense of security. So they were able to bring in lots of labour, but it wasn’t actually pushing out any more output than we’ve seen in previous years. So basically what companies were doing was throwing people at the work and that diluted the productivity levels that we’d been accustomed to. And obviously now since, Brexit has gone through, there’s a lot more control over, the free labour market has now obviously died down.

Linda Garcia (02:56):

And indeed now, since the pandemic has been going on and as the hospitality industry is now opening up again, business owners now are struggling to find enough labour and, especially in the hospitality sector, to take up the jobs. And they’re not able to as easily bring in resources from the European countries that were basically underpinning the bars, the waitressing, or the waiting, bar staff, et cetera. So that has been why the productivity measurements have changed.

I also believe that there has been, a sort of lightening and loosening up of the way that businesses are managing their staff. The younger generations are wanting a much freer environment, but also we’re not really training managers to manage the people in the business. And so many people are maybe promoted into the first level team leader, supervisory roles without any management training or leadership development.

Linda Garcia (04:03):

And it’s easy to take somebody out of an area because they’re your highest performer and you think, yeah, they’re going to do a good job and get the rest of the team working at the same level. But if they’re not, actually, if they don’t have the people skills or they haven’t got the capabilities or the managerial competencies. Then what invariably ends up happening is the business leaders see the performance and the productivity actually drop because the team’s not being managed properly and their best performer is now trying to manage a team rather than doing the job themselves. So that, I think, has been one of the causes of the deterioration in our productivity over the last sort of 10 to 15 years. Yeah, and management is a bit of a dirty word these days.

Tracey Adams (04:48):

I mean that doesn’t paint a great picture, does it, what you’ve described, that whole scenario? And I presume that, because of all of that, either within the UK or with our European and global counterparts, we are losing a competitive advantage, potentially.

Linda Garcia (05:05):

Absolutely. The last set of stats when I started getting out on the speaking circuit, talking about the productivity of the UK in comparison to our G7 counterparts, for example, the UK had dropped down 22 percentage points below countries like Japan, France, United States, Germany, which is not a good indicator for the UK’s economy, that we are gradually slipping down the productivity charts against those other countries. And one of the graphs that I was pulling out showed the actual output per hour, since around 2011, has dropped by about 2% or 3%. But the actual total hours that have been employed has increased by about 20%. And that is comparing it with other GDPs and employment and total hours in other countries as well.

So yeah, we have definitely lost our competitive advantage and there’s also, I feel, it’s the lack of investment in businesses. Going back to the management, a lot of company owners see training as a luxury, not a necessity, because a false sense of economy really, because you are training and developing your frontline supervisory people to get the people that they’re responsible for, the employees, working towards certain levels of productivity, then that little bit of investment is going to pay itself back in improved productivity. The UK has definitely sort of lost its place on the pedestal, when it comes to the productivity figures.

Tracey Adams (06:50):

If you think that’s just the general picture before even the pandemic. So my next question, what then has been the impact of the pandemic on productivity?

Linda Garcia (07:02):

I think, as we were talking, it’s a bit of a double-edged sword because there have been some businesses whose products and services have absolutely flourished because of the pandemic. So like supermarkets, for example, and the food and drink industry, not so much the alcoholic beverages, but food and supermarkets, they have been booming. Then obviously retail has badly, badly suffered.

In the arena that I work in, I’ve been consulting to, for example, a care company who have actually seen their levels of clientele booming because more the elderly and the vulnerable, their relatives don’t want them going into hospitals or into care homes or other institutions because of that fear that they’re going to be getting COVID. So the care industry is now having to do the domiciliary care and see people in their homes, which I personally, from a very personal level,

Linda Garcia (07:56):

I think it’s a great thing, but it can be quite expensive. And then companies like the web agencies and the social media and the digital marketing companies have absolutely boomed because businesses have started to recognise that if their only presence is now going to be online. And that’s the only way that they’re going to be attracting their clients and getting to their markets.

So those businesses that can develop the online presence for their clients have also really gone crazy. In terms of the productivity, I think where the pandemic is – and possibly the full effect of this has not yet come to the surface or it hasn’t really fully exploded yet -it’s two fold, employees who are now having to work from home or tending towards hybrid situation, they are not now in front of their managers.

Linda Garcia (08:54):

If the managers were not very effective to start with, if the employee, are now sort of out of sight and out of mind. And the only way of catching up with them is via a telephone call or a zoom call once a day, then that could be a hidden source of loss of productivity. And we’ll get onto more sort of the hard ways to measure productivity.

If the business, especially in the SME arena has not got robust and solid management control systems, which provides the information for supervisors and managers and the business owners to see are my people having a good day or a bad day. And that doesn’t necessarily just mean output. It does also mean sort of emotionally and mentally. Then if those people are now also working from home and the managers aren’t getting that sort of ‘over the water cooler’ ‘around the coffee cups’, sort of conversations and keeping their finger on the pulse, then that is where businesses are starting to recognize.

Linda Garcia (09:53):

We don’t know what’s going on. And then there’s also the double-edged sword. That I mentioned that employees in, for example, call centre employees, which you know, massive numbers of people and staff and team members now working from home. They’re isolated, they might not have a very congenial workplace in their homes.

Now, a lot of people have been known to be sitting on their beds, working from home well to sit on a bed for eight hours on a laptop is not going to do your neck, your back, your wrists, all of that occupational hygiene stuff, you’re doing yourself physical harm. And just as a complete aside, very few employees actually know that they should have a working from home policy and they are responsible for the health and safety of that person at their ‘work station’.

Linda Garcia (10:48):

Businesses are not really getting to see what impact this is having on the employees’ emotional and physical wellbeing. And one of the recent blogs that I wrote is about the burnout of employees, where we’re starting to see.. In fact, the WHO, I’m not sure if you’re aware of this, actually recognized employee burnout, they just announced recently as an occupational phenomenon and they’ve classified it under the international classification of diseases. You didn’t know that little snippet.

They’re describing burnout is the syndrome that we’re getting from the chronic workplace stress that’s not being successfully managed. And they identify feelings of energy, depletion or exhaustion, increased mental distance from one’s job, feelings of negativity, or cynicism relating to the job, which all leads to reduced efficacy, reduced productivity. And employees are also very nervous whether they going to have a job to go back to, especially if they might be sort of temporarily furloughed.

Linda Garcia (11:56):

Some people might only be doing two or three days and what they, if the employee is not monitoring and managing those, those workloads and the individual’s wellbeing, those employees could well be trying to do four or five days work in two or three days. Which might be really productive for the business, but it’s going to result in those employees becoming completely burnt out if they continue that on a very long-term basis –  when we start getting to two years, three years.

So this is where I’m a little bit cynical about how far the work from home explosion and excitement will go. We are now talking about hybrid situations, but productivity is something that needs to be managed. And if businesses weren’t very strong at managing when the employees were in the workplace, then they’re definitely going to have to start beefing up the ways, and the methods that they use to manage people that are now working from home – if they see that as potentially a long-term or permanent arrangement.

Tracey Adams (13:02):

Well that, I think leads us nicely onto the next point then, because, as an expert in productivity, if you have the opportunity to speak to SMEs, owners, leaders, and this could be now in the current, mostly working from home scenario, or it could just be the general principles. What would you encourage them to look at with regards to their own productivity in that business?

Linda Garcia (13:27):

Yeah. I think it’s two fold. One is more the technical side of – what information are they gathering from the field? What are their key performance indicators, the KPIs that allows them to check in – are we doing well? Are we on plan? Are we off budget? Are we going to achieve our forecast for the week? The adage that I use, if you can’t measure it, you can’t manage it. Everybody that knows me, will recognize that phrase. But it has to be getting those numbers in, to then have the conversation. And this is where I think, a lot of business owners have this perception that, well, we’ve got all the information coming through on the IT systems. And we know what our numbers are because they’re on the dashboard. Yeah, that’s great, but, what are you doing with that information now that you have it?

Linda Garcia (14:23):

The other side of the equation is the mindset and the communication with the employees. One, the employees have to understand where they fit in, in the greater scheme, which cog they are of the engine. And how does their work impact and drive forward the greater cause, delivering the product or delivering the service that the business is involved in. And if those employees don’t have that clear in their mind, then they’re just like a little hamster on the wheel, just turning, turning, turning, and not really understanding where they’re going to.

So involving employees and understanding what is our plan, this is the bigger picture that we’re aiming for, and this is how you fit into it, is what the management information systems and the key performance indicators will then give the managers and the supervisors something to base their conversations around.It’s being objective, fair and factual, isn’t it, with data rather than managing people on gut feel and perception.

Linda Garcia (15:28):

Then on that, that communication process, I am a firm believer that every employee, every staff member deserves a one-to-one conversation with their manager at least once a week, if not daily. And the frequencies with which I implement meeting plans and those communication touch points in businesses very much depends on the type of work that they’re doing. So if it’s ridiculous to be talking to everybody once a day, because they’re just not going to get that much out of control, then there is also the option to do it every second day or every third day. But I would say always weekly.

In fact, if Linda Garcia had her way, there would be no annual performance appraisals because every employee would know exactly how they’re doing and whether they’re on target and what their development areas are and how they’re going to improve themselves in the future, because they’d be having that conversation every week.

Linda Garcia (16:19):

But having those conversations is also part of the management’s activities. And again, it’s something that when you are creating a managerial position, whether that’s a foreman, a team lead, or a supervisor, a charge hand whatever the job title is, they are there to manage people and get work done through other people. They have to be trained and given guidance on how to coach employees through the information that is on the report. Great – you’ve targeted to get 20 calls done today to hopefully close 10 orders on an average order value of a hundred pounds. You’ve actually surpassed that. That’s brilliant. What did you do? Can we get the rest of the team doing the same thing? That would be a really positive outcome? More normally it’s a situation where we haven’t reached the plan. What went wrong? How can we help you?

Linda Garcia (17:11):

Is there anything that you might feel you need some extra training on? Shall I listen into your next call and we’ll debrief afterwards? That is a managerial conversation with an employee, from a manager who’s trying to get someone to succeed. Not the, ‘you haven’t done enough work today, you’ve screwed up all your targets, we haven’t got the numbers and then by the end of the month, we’re all going to be out of a job’. That is not good management.

A lot of this comes down to the other, I know, the other topic that we were having a bit of a debate about is between, when I talk about leadership and management development, I don’t just mean soft skills of communication, confrontation, how to avoid or manage conflict, et cetera, et cetera. You’ve got to teach managers the tools that they have, which should be the other business systems, the business management control systems, what the KPIs are, how they come about, so that any manager in a business or supervisor has got to have that technical understanding of what are the tools available to them, in order to help them be a better manager to the employee and get rid of that gut feel and perception process using, and obviously, the soft skills have to come into it.

Linda Garcia (18:21):

Some people are born leaders, others are not, you can teach people how to manage. I’m not yet convinced you can make a leader. I do think leadership and entrepreneurialism is born into you. So yeah, that’s my advice to the SMEs – you’ve got to get your technical management systems sorted out and then make sure that you’re training your managers in the soft skills to use that information effectively.

Tracey Adams (18:47):

Yeah. Okay. Just as a final question, Linda, what I’m going to ask is, is there one, I think I know probably what your answer’s going to be, because we’ve talked about this. But what would be your one take out for SMEs if they went away and did one thing now to improve or look at productivity? What would you say go and do – first things first?

Linda Garcia (19:09):

One – look at your numbers, and not the financials. Go in and look at your, if you haven’t got KPIs, get some KPIs in place where you have translated your financial forecast into how much product or service does that mean and how much resource do you need to put into it to generate that output?

Secondly, there is a really useful tool which actually helps management massively is the engagement multiplier. It’s an anonymous survey tool. And unlike the annual surveys that many businesses use, this is done every 90 days. And because it’s anonymous, it allows employees to give real feedback to a series of structured questions. The company does have the option to add a couple of extra questions if they want to. But what that does is gives you, a finger on the pulse every three months of where your employees are either really engaged with the business or how much dysfunctionality there is.

And that is almost measuring, the business management systems are giving you all the data, but what the engagement multiplier survey tool does is gives you something tangible and measurable on how people are thinking in your business. And with so many people being out of the office and not having those sort of regular face-to-face contacts and communications with their leaders and the rest of their team and their colleagues, that is a very powerful tool that starts to get that information back into the business again.

Tracey Adams (20:35):

Yeah. And wouldn’t that be interesting I think, if you’d been doing that pre pandemic through the pandemic and coming out of the pandemic as well, because the business had that in place to see, to gauge the feeling and mood, et cetera, throughout that process would have been quite helpful. Wouldn’t it?

Linda Garcia (20:51):

Which would have been great had we known the pandemic was going to affect us in quite this way. Easy with hindsight, isn’t it. A lot of business owners are very quick to say, oh, but it’s not the right time. There is never a right time in terms of measuring and tangibly measuring, the culture of your business, which when people are not working face to face, it’s really important to do that. Then you’ve just got to start it.

Tracey Adams (21:16):

Yeah. That’s been fascinating Linda. Thank you ever so much, all really good advice really good background as well it does help.

Linda Garcia (21:27):

I can give you links to the blogs and to those surveys. If you want to pop that up for your listeners to have a click on and have a look at and read more information into it.

Tracey Adams (21:34):

Brilliant. So thank you for joining us today. And it’s been a pleasure and to our listeners, I hope you’ve enjoyed Talking SME and look out for future episodes coming soon.