Productivity is a subject that definitely falls into the worthy but dull category.
Concerns about what’s been called the wider “productivity puzzle” at the national economy level (why has productivity growth so consistently underperformed compared to experts’ expectations?) have been around for
The good news is that for at least one important group of people in the economy – procurement professionals – the productivity puzzle could be on the point of being solved. Having made their own contributions to the puzzle in the past (keeping staff numbers up, making only piecemeal efforts to automate transactions), procurement teams are now poised to make contributions to solving it.
Digital technology is proving to be key. Smart procurement people are working with colleagues to understand whether new technologies like blockchain or Artificial Intelligence really are of benefit to their
Progressive executive teams are now ensuring that the right cultural conditions are in place in their
- Team members are now clear about
organisationalgoals, knowing they are listened to (closely) and have the autonomy to design both their own jobs,and the services they deliver, for better productive working. In a recent report, the CEO of BT Global Services Bas Burger recognized the productivity puzzle will be overcome by “primarily human factors” and that transformational strategies (in this case digital) “should always be built around people”.
- Flat organizational structures have become good models of innovation – in them procurement guys engage closely with service users, and nimbly use the knowledge that even their own executive teams don’t have about what works and what doesn’t.
- In the public sector, executives understand that low productivity in the past was linked to poor accountability – as the Reform group commented, some staff “were accountable only to themselves, explaining their lukewarm commitment to performance and value for money”. So in services such as health and education, where choice and competition now apply, public sector procurement guys, like other colleagues, are becoming accountable to service users in charge of their own funds.
Productivity improvement in the past always meant cutting down on
Satya Nadella talks about some new jobs as being “with the machine” and others as “people on people”, and says Microsoft is making big efforts to use networked data (from services it provides such as LinkedIn) to identify what skills should we train people on “so that they can be more prepared for the jobs of the future”.
The whole area of improving skills and training is now being genuinely embraced (
- More investment in existing employees – those who want to be, and can be, equipped with new or upgraded skills.
- Encouragement of individuals (existing staff and new starters) to keep learning over a long period of time, so acquiring a much greater range of skills.
- A focus not just on key
technical / operationalskills, but also those “softer” ones needed for the new jobs (things computers aren’t good at): abstract reasoning, problem-solving, creative and interpersonal skills.
These variables will carry on being used, but also be supplemented by new ones that reflect the shift to different ways of working – for
Procurement, as a service function (big offices, bits of old IT, costly employees), is likely to be subject to productivity improvements confirmed by the numbers only after a time lag. Two academics, Erik Brynjolfsson and Andrew McAfee, proposed the theory in 2014 – there’s a lag between the development of new technologies and the time when benefits start showing up in statistics. Plenty of what The Economist calls “techno-optimists” now say the same. The stage is set for a “truly transformational phase that is only just beginning”.
So have patience. After a time
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