Execute to advance productivity

It is good news that the construction sector  spend a week discussing strategies to steadily and sustainably raise productivity. It is an initiative that could be extended to other industries.

Because we know very well that we are in the wrong, with zero growth in this area two decades ago, as experts from the world of academia have periodically highlighted. However, we have been presenting diagnoses for those same 20 years, when what is needed are proposals.

What methodology are we applying so that this change involves and incorporates all the actors in the industry, owners, executives and workers? Execution is the key, if it is not executed correctly, we are not going to improve. And the problem is that we are bad at executing, since that is precisely where productivity is captured. In short, what has happened in the last 20 years is that there has been no execution in Chile, there is no talk of operations, since they are as relevant as the organization's strategy itself.

And what do we do? Are we working in coordination? Are we looking at the execution of organizations to improve productivity? Do we have the appropriate methodologies? Do we incorporate the necessary knowledge within the organization? What was the last time that the director of a company , of a construction company, for example, asked how productivity per man-hour in construction is doing? Are you asking how these rates are doing every month?

At the country level, we have had a National Productivity Commission since 2015, but the reality is that we have not been able to reverse the figures. According to Clapes, from 1998 to 2019, the growth of total factor productivity (TFP) was at an average rate of 0.3% per year, while during the period 1986 to 1997, it grew by 3.4%. .  Faced with these figures, the commission should consider that the issue is not only about public policy, but about how it is executed.

The OECD report, which focuses on the human side of productivity, has not been included either. Apparently, there is a lack of practical knowledge of how to do it, otherwise we would not have these levels, which are clear evidence.

What is required to take the next step is to create the right conditions for the organizations themselves to improve their productivity levels, and for the practical knowledge, the one that is present in the organizations, and that has allowed the development of companies since their  different business processes, get you moving in the right direction. For this, the ability to articulate this practical knowledge in favor of common objectives is crucial, which is possible if it is embraced and is part of a joint vision, incorporating people.

As Gary Hamel and Michele Zanini recently pointed out in Harvard Business Review Press's book Humanocracy, we need to put  human beings at the center of organizations, not structures, processes or methods. Instead of placing the executive model that maximizes control of the organization for the best efficiency, it is necessary to maximize  the contribution by the search for impact. Replace bureaucracy with humanocracy.

To move forward, we need more than a week of productivity, we urgently need  ask ourselves, are we determined to start executing?

Francisco Ortuzar

Orca Business Consulting Partner

short version published  in Financial Newspaper