Vodafone enterprise director Phil Mottram: Three keys to closing the UK productivity gap

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Photo of several people's hands and arms using laptops, paper etc to indicate productivity gap

Future growth rests in the hands of UK business – but while the productivity gap remains are we really equipped to take the lead, asks Phil Mottram of Vodafone

The UK has a problem with its productivity gap. Figures calculated and published by the Office for National Statistics, don’t make for comfortable reading. The overall picture has been consistent for a decade – our country is underperforming compared to G7 counterparts.

What can leaders in the trenches of British business do to steer the UK in the right direction?

Vodafone recently commissioned The Power of Productivity report, undertaken by Dr Alexander Grous of the London School of Economics (LSE). In his report, Grous draws upon interviews with 20,000 business leaders in 35 countries to answer the not-so-simple question – and he found three critical ‘keys’ to help businesses of all sizes, regardless of location, raise business productivity by up to 20 per cent.

1. Management practice

Management practice is by far the most important key to achieve a productive, effective business. Well-run businesses monitor processes continually to find efficiencies and avert problems. They establish tough but achievable targets, check whether those targets are achieved every day – and then remedy the situation if they aren’t.

They work to attract the best staff, keep them and develop their skills. And leaders analyse their own performance critically. Companies studied by the LSE achieved an increase in output of 10 per cent by focusing on improved management practices alone.

2. Effective use of technology

There’s a big difference in the productivity boost you get when technology is adopted alongside best management practices (as much as a 20 per cent increase) and when it’s not (just a 2 per cent rise).

Technology adoption should be driven in line with clear strategic business goals – does it support business growth, align with specific needs, make people work better, improve customer engagement, reduce costs, transform how services are delivered or make processes more efficient?

3. The power of flexible working

In our own 2015 research covering 8,000 firms practising flexible working in 10 countries, 61 per cent said profits increased; 83 per cent reported improved productivity; and 58 per cent said their organisation’s reputation had benefited. Absenteeism went down and retention went up.

Again, for flexible working to bring those gains, it needs to be linked to management best practice and led from the top. Complete flexibility in how the workforce operates benefits both employer and employee alike.

UK business will face opportunity and uncertainty over the coming years. It’s important that improving productivity is top of the agenda to make sure the UK is ready for anything.

The first step is to assess your business, and see where you can flex the three keys identified by LSE to gain greater productivity.

 The full research paper, The Power of Productivity, is available to download from the LSE.

For more on the productivity gap

How to improve UK productivity

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About author

Phil Mottram

Phil Mottram

Phil Mottram is enterprise director at Vodafone UK

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