Productivity: on the Agenda But What Does It Mean?

Productivity: on the Business Agenda But What Does It Mean

Wellington– Thursday 30 September 2010. A report by Newport Consulting has found that 87% of surveyed New Zealand companies believe they will be more productive this financial year – yet 62% of those surveyed don’t know how to define productivity, or how productivity will benefit their business.

According to Newport Consulting’s, “Managing in Uncertain Times. The Current State of Play”, annual report which tracks business confidence, trends and management behaviour of business in Australia and New Zealand, more than half of the surveyed New Zealand companies don’t know how to define productivity.

One of the report’s key findings is that New Zealand businesses urgently need to understand productivity, demonstrated by the fact that 87% of the surveyed companies believe they will be more productive this financial year; citing ‘increased productivity’ as a major source of business growth, but 62% of those companies don’t actually know what productivity is or how to achieve it.

David Hand, Managing Director, Newport Consulting knows there is a significant difference between what business believe productivity to be and what it really is.

“There is a perception that being more productive is about increasing profits by producing goods and services at a lower cost. This perception, however, is steeped in the business practices of the 1980s,” David explained.

“In 2010, productivity is about the sustainable and profitable deployment of people and resources to achieve the volumes demanded by consumers. It’s about building a more capable organisation that delivers its products and services on time, at the right price and at a profit. It’s delivering a customer experience which ensures repeat business and also goodwill, advocates and word-of-mouth endorsement.”

“Our report suggests that productivity presents a growth opportunity for kiwi companies. In the next 20 years, New Zealand will experience an aging population with an increase in the number of affluent consumers who are retired or working less, yet will demand high volumes of quality products and services. This productivity challenge needs to be understood by both business and government.

Linda Calkin, Newport‘s General Manager in New Zealand, believes an educational approach is required so that companies can comprehend productivity and incorporate it into their long-term management strategies.

“Our survey suggests that business managers need to know more about productivity and how their business can be enhanced through productivity improvement. I’m talking with business leaders and managers every week who are coming to an understanding of how productivity can help their business. A national, co-ordinated approach will significantly help achieve this.” Linda said.

ENDS

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