Pulitzer Prize-winning business journalist Charles Duhigg says Britain’s productivity gap will be closed if leaders can shift mindsets to empower staff and tackle failure head-on…
It’s no secret that Britain has a productivity problem. We’re working longer and harder than ever before – more than six million Britons put in more than 45 hours a week according to recent estimates – and yet there’s less to show for it. British workers produce significantly less per hour than our G7 counterparts (18 percentage points behind the G7 average). Productivity growth is at its weakest since the Second World War. In Germany, employees work 10 fewer hours a week, and yet this toil results in the country being 33 per cent more productive than the UK. With its promises of fewer hours worked and increased output, this wasn’t exactly how the digital revolution was supposed to turn out.
For leaders wrestling with their own firm’s productivity predicament, one man believes he has some answers. In his new book, Smarter, Faster, Better, Pulitzer Prize-winning business journalist Charles Duhigg has consulted neuroscientists, psychologists and CEOs to unravel the secrets of greater productivity. The solution? Changing the way you think.
“The thing that unites business leaders of high-productivity companies is they tend to think more deeply about stuff, like motivating themselves or encouraging their teams to work together,” Duhigg tells Director from his office at the New York Times. “Changes in productivity often have to do with shifts in how we think, not the tools we use,” he adds, pointing out that it took around 20 years for both electricity and computers to become truly productive (after the introduction of assembly lines and e-commerce respectively), despite initial claims about their labour-freeing possibilities. “Clearly, your PC is more powerful than a calculator,” says Duhigg. “But using your PC as a calculator doesn’t increase productivity. What does? Coming up with an entirely new idea for your business.”
Communicating a different narrative of your business towards staff and clients could also be instrumental. “Our brain grabs onto stories,” says Duhigg. In the book he writes about the General Motors (GM) plant in California, where – in the 1980s – unhappy staff guzzled plastic cups of vodka while working, also committing sabotage by putting empty whisky bottles behind door panels so they’d rattle after the car was sold. When Toyota partnered with GM, some troublesome employees were flown to Japan to learn about the production system. The practices they observed – from pausing assembly lines so workers could repair mistakes or managers taking commands from staff – were implemented in the US, forcing a seismic shift in work ethic.
“The new mental model that Toyota enforced was, ‘We want you to be proud of what you do’,” says Duhigg, who also draws upon the experiences of aeroplane pilots, poker players and the Saturday Night Live cast in his book. “Once they [GM] took that head-on and changed the story staff told themselves every day, which was ‘nobody’s proud of your crappy products’, it had a huge influence on how workers spent their time and enthusiasm for the job.”
To galvanise staff, Charles Duhigg suggests giving them more decision-making authorities and autonomy. It resonates with the concept of ‘psychological safety’ (“a sense of confidence that the team will not embarrass, reject or punish someone for speaking up”). This has been embraced by Google, which has a ‘no-interruption’ culture, whereby leaders shouldn’t disturb employees during conversations. Says Duhigg: “Numerous studies show the most productive choice is empowering employees to make decisions for themselves.”
Fostering employee wellbeing and success is crucial, with Duhigg pointing out that when Google increased paid maternity leave from 12 to 18 weeks, it halved the rate at which new mothers quit the business. “The highest-performing companies are those that say, ‘we’re committed to employees’ happiness and success’, even if they lose money in the short term,” says Duhigg. “The reason why it works is it keeps mid-level employees at the company. The biggest cost to a company is when a good employee leaves, taking knowledge and clients to a competitor.”
Analysing why businesses flounder, rather than merely focusing on entrepreneurial success stories, can also be beneficial, argues Duhigg. “There’s a huge psychological impulse not to pay attention to failure. If one of your friends is getting married, it’s normal to ask them how they met their wife. But if they’re getting divorced, we avert our eyes. As a result, we don’t learn from failure.”
Furthermore, he notes the US economy’s strength is partially down to its lenient bankruptcy laws. “It’s easy to declare bankruptcy in the US and there are few long-term consequences,” he says. “If somebody’s company fails, they can walk away without it hanging over their heads for 20 years. As a result, people are more incentivised to start new companies and experiment. That’s why we have Silicon Valley.”
Another aspect Duhigg focuses on is creativity: “The evidence suggests anybody can be creative or innovative. [What you need] is a process around you encouraging you to think about things in new ways.” He cites the Disney film Frozen (at over £900m, the highest-grossing animation of all time), which wallowed in development hell until “somebody said, ‘Instead of creating something revolutionary, let’s go back to what we know’. In this case, it was princesses and sisters… When those two elements came together, you start to see all the creative possibilities.”
As for Britain’s below-par productivity? “The most productive people and companies understand there’s a difference between efficiency (doing the same thing faster and faster, over and over again) and productivity,” says Duhigg. “Now, with the digital revolution, there are so many distractions, which overwhelm our attention. If we don’t govern that and police our minds, we’re at a serious disadvantage.”
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Smarter, Faster, Better is available now, published by William Heinemann, £20 (hardback)
To watch a video of Charles Duhigg talking at the IoD click here