In my last article, I discussed why enhancing productivity is often a complex challenge for business leaders, and explored the role of the CFO in unlocking productivity within their organisations. Our latest report with The Productivity Institute revealed that the CFO and the finance team have a key role to play in facilitating productivity improvements within their organisations, including through streamlining finance activities and adopting new technological solutions and work practices to enhance efficiency and seize new commercial opportunities.
But none of these strategies can be successful in isolation; each requires a joint strategic effort encompassing people, technology, and finance. Strategic productivity means that all business functions work together to boost efficiency and effectiveness. Sounds logical, but making it work in practice can be quite a challenge. What often happens in the boardroom makes me think of The Blind Men and the Elephant fable, where each man touches a different part of the elephant and describes it differently. They argue, whether it’s a thick snake, a spear, or a tree trunk. Despite being wrong, each one is convinced they hold “the truth” – sounds familiar? Well, you’re not the only one.
Building on joint research with The Productivity Institute, we recently hosted a discussion with C-Suite leaders – a CFO, a CHRO, and a CIO – to gather their real-life insights and practical solutions to address this issue. They immediately put the sticking points on the table:
- While everyone agrees that people are at the heart of productivity, CHROs find it hard time making a strong case for investing in people.
- CIOs feel there is a lack of understanding across the organisation about what it takes to make a new technology work.
- CFOs often end up being the strict gatekeeper, often at the expense of driving commercially viable projects.
How did we get here?
To understand how to tackle productivity issues within organisations, we must first understand their root causes and how they impact overall performance.
- Digital transformation – legacy system hurdles: New technologies are not just changing the way we connect and work – they are revolutionising it. Those who master digitalisation can successfully innovate and leave their competitors behind. But, often, the reality is far more complex. We have all experienced the frustration of dealing with legacy systems that do not “speak with each other”, leaving us feeling as if we are on a mission to improve the systems, rather than the systems working to improve our lives. This makes it difficult for people to perform at their best.
- The hidden cost of fragmentation – a data dilemma: Fragmentation doesn’t just lower people’s motivation. It also accumulates an overwhelming amount of data that may lack quality, relevance, and timeliness. In such situations, making informed decisions becomes nearly impossible, turning what should be a streamlined process into a counterproductive experience.
- Tunnel vision and short-termism – the hidden pitfalls: These dynamics create a strong incentive to focus solely on numbers, enforce rigid rules, and sanction initiatives that are hard to quantify. The focus on costs rather than on value creation inevitably leads to tunnel vision and short-term thinking, both of which mean low staff morale and missed opportunities.
So, what can be done?
To overcome these challenges, it’s crucial for C-Suite leaders to foster a culture of collaboration and mutual understanding. This means breaking down silos and encouraging open communication across all departments. By aligning the goals and strategies of the CFO, CHRO, and CIO, organisations can create a cohesive plan that leverages the strengths of each function.
- Playing to everyone’s strengths: By collaborating, the CIO, CFO, and CHRO can lead to create synergies across the organisation – if they don’t, it simply cannot be achieved. For example, the IT department possesses the technical acumen needed to overcome system impediments and facilitate digital journeys. However, the CIO must persuade the CFO and the finance team that new investments are well worth the money and effort. By reasoning together and tracking system performance, they can create a win-win situation. But there’s a piece of the puzzle missing. To successfully implement new systems and change behaviours, you need to consult and work with the people who will be using them; this is where the expertise of the CHRO and HR team come in.
- Navigating the winding road of change management: Improving productivity is ultimately about managing change, which is a winding road rather than a straight path. People, technology, and finance need to be embedded in the process from the outset, but things rarely go as planned. Agility and resilience are often mentioned in this context, yet they can only be achieved in the presence of trust, open communication, and teamwork. While celebrating successes is important, sharing failures and openly discussing lessons learned are crucial for fostering a learning culture that binds change and productivity together.
- Cultivating accountability: As is often the case, the responsibility for ensuring effective governance, compliance, and accountability across the organisation falls squarely on the CEO and the Board they lead. It starts with the composition of the Board and ensuring that senior leaders with the right expertise, business experience, and understanding of the organisation’s ecosystem are included. Once that is achieved, the way they engage in dialogue becomes crucial. Diversity of thought is essential, as constructive arguments ensure that all resources are utilised, and risks are considered – comprehensive discussions and critical thinking will help pave the way to optimal solutions. Last, but not least, once decisions are made, they need to be consistently communicated and articulated with clarity and confidence at all levels of the organisation.
While there are many challenges to improving productivity within organisations, having the right team, behaviours, and attitudes can make all the difference. By fostering a culture of collaboration, open communication, and continuous improvement, organisations can transform productivity from being “the elephant in the room” into a clear and achievable goal. When approached in this way, productivity becomes our pathway to stronger business performance, enhanced innovation, and improved wellbeing for everyone involved.
If you’re interested in hearing more about strategic productivity, listen to the Strategic Productivity: Unlocking the UK’s Productivity Potential episode of The Productivity Puzzles podcast.