Canada’s declining productivity is a serious concern because the more it costs us to produce something, the less competitive we are in the global marketplace. And the less competitive we are leads directly to fewer jobs, diminished earning power and a lower standard of living.
The usual explanations as to why we struggle with productivity frequently point to a lack of investment in tools, technology and innovation. But how we hire, deploy and develop people rarely gets a mention, even though these have the potential to significantly increase or decrease productivity.
Here are four sure-fire ways to reduce an organization’s productivity:
1. Settle for less
Canadian business is, by and large, an under-achiever when it comes to recruiting and hiring talent. It is rare for a business to undertake an international search for top talent below the C-suite (senior executives) and even then it is often greeted with skepticism. Alberta Health, for example, recently hired an Australian as CEO. When his appointment was announced, the immediate reaction was “Don’t we have anyone local who is qualified for the job?”
Leading organizations understand, however, there is a scarcity of talent and to hire the best means looking far and wide. From a productivity perspective, it’s a strategic advantage to hire someone who is fully capable and can hit the ground running.
2. Under-value expertise
Canadian business is chock-full of people doing jobs for which they were not trained or adequately prepared. Companies are awash in people who refer to themselves as “generalists.” This frequently means they have moved around the business to fill a hole or satisfy an immediate need. The downside for productivity, however, is they often lack the perspective and expertise to take a function to the next level.
The most common victim of this de-valuing of expertise is human resources. There is often an erroneous belief that understanding and being able to relate to the business is more important than having the background and technical expertise to actually run it. The result is a dearth of capability across an entire function.
What leading companies understand is it is more expedient and efficient to put experts in roles that demand expertise.
3. Move people around
One of the rationales for moving people across functions is it is good for their development. There is no question gaining cross-functional experience is a growth opportunity for leaders and critical for those being groomed to assume significant roles in the future. The casualty in these moves, however, is often the team or function itself. It serves as a training ground for the inexperienced, a place where modest ambitions are expected and generally achieved.
Leading companies understand only those people whose development is critical should be moved into significant stretch assignments outside of their areas of expertise. They realize the productivity of people on a steep learning curve will always be limited, so they make these decisions cautiously.
Balance what is good for the overall business with what is good for any one individual’s development.
4. Rotate people every 18 months
There are still some companies that believe effective leadership development means rapidly cycling people through roles. Find a problem, assign a high potential to solve it, move him on to something else. This strategy has at least three problems:
• It takes people an average of three years before they are a good return on investment — 18 months to learn the job and 18 months to become good at it.
• Emerging leaders in this scenario never have to live with the results of their decisions — their learning cycle is incomplete and their growth is stunted.
• Every time you move someone new into a role, he undoes much of what his predecessor put in place, further eroding the potential productivity of a team or department.
The reasons for faltering productivity extend beyond a reluctance to take risks and a reticence to invest in technology. The beliefs and practices of leaders around hiring, developing and deploying talent can have a positive or negative impact on the productivity of a team, organization and country. Being smarter and more sophisticated around people practices and decisions can only have a positive impact on the bottom line.
Rebecca Schalm is the executive integration and transition practice leader at RHR International in Calgary. She can be reached at firstname.lastname@example.org.