Unlocking productivity

UK productivity trails G7 competitors

Whilst improving productivity in the UK remains one of the main goals of the Governments Industrial Strategy, the productivity measure of GDP per hour in 2018 was 19% below the 2008 pre-crisis trend level.  The UK is trailing almost all the G7 nations at sixth place out of seven.

Only a few SME’s are capable of significant growth

Businesses with less than 250 employees account for over 99% of private sector business in the UK, 66% of all private sector employment and 73% of all net private sector job creation.  However, many of these businesses are only focused on remaining in business. They do not have significant growth ambitions, they are not high growth businesses seeking to step change their productivity.  Only 6% of these businesses who employ more than 10 people can be characterised as high growth firms and 1% of these businesses account for 20% of job creation.

Three main barriers to growth

Three barriers to productivity improvements: First, identifying the potential high growth businesses so that they can be supported; Second, access to funding for these high growth firms is proving difficult, UK investors are more reluctant than their counterparts to make equity investments in relatively high-risk SME’s; and Third, there is a causal relationship between poor UK management practices and poor productivity.

Access to funding is holding back productivity growth

Access to funding is thought to explain about 18% of the relative productivity gap.  Four banks in the UK account for 80% of the SME loan market so competition is limited.  Most SME’s fund their activities through a combination of overdrafts (42%) and credit cards (40%).  UK SME’s use less equity from third parties than their G7 counterparts.

Poor UK management practices are a significant barrier to growth

Poor management practices account for a whopping 55% of the relative productivity gap.  The main reasons are an inadequate supply of quality managerial capital; inadequate worker skills; and a lack of knowledge of what changes to make in order to improve productivity.

Management really matters

Research studies over 15 years and involving 12,000 businesses across 34 countries shows that upper decile companies are twice as productive as the lowest decile equivalent.  UK businesses do not invest as much in job training as their European counterparts.

How we can help

Our team of consultants with their experience and rigorous analysis can help “make ready” ambitious SME’s willing and capable of growth.  We have a multi-disciplinary group of experts who can address a wide range of challenges. We have a track record of enabling and delivering growth across a range of businesses and sectors.

We can help access to funding

Our team includes experienced FD’s who can conduct financial health checks; working with colleagues they can develop and help implement improvement plans; get clients investor ready, and help with introductions to sources of funding.

We can help improve management practices

An experienced team of improvement consultants; can help benchmark your business; develop improvement plans and engage experts with the skills and knowledge to enable and embed improvement in the key areas.

Learn more and get some help

If you are an ambitious SME and want to learn more about how we can help you improve your productivity and grow, then get in touch a confidential no obligation discovery conversation.

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The pace of change is accelerating at a frightening rate

Many businesses will see more disruption in the next five years than they have in the last twenty years, according to a recent McKinsey report.  

And product life cycles are shortening

Many sectors are seeing the shortening of both product and business life cycles.  This makes it harder for businesses to get a good return on their investments. Winners inevitably are those that get their brands established fast and create scale fast either organically or through market consolidation.

So, what are the key areas for business leaders to focus on?

We think that there are four areas to get right to succeed in these ever-changing and increasingly competitive markets.

  1. Clarity of strategy

Spend time getting the vision and goals clear, shared and understood throughout the entire team.  Be flexible, keep them under review, this will ensure their ongoing relevance and enable the business to seize opportunities as they arise.

  1. Enabled structures

The organisation’s structure is important with clarity of roles and responsibilities, clear accountability and transparent measures.  Equally important are the external structures, the efficient and effective engagement with customers and suppliers creating an ecosystem of partnerships.

  1. Fit for purpose processes

Built upon standardised ways of working and embracing the philosophy of continuous improvement.  Process owners with transparent measures enabling rapid decision-making in pursuit of delivering the vision faster and better than any other alternative and all enabled by the latest fit for purpose technology.

  1. The right resources

Stakeholder engagement through belief will ensure commitment and enable both capital and human resources are available and engaged on delivery of the business vision.  Leadership and role mobility will help the enterprise deploy resources when and where required.

Your next step

We can help you get the right focus and plans in place and then work with you through the implementation of the agreed plans.  

If you would like a confidential discussion on how, then get in touch.

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The Journey - help to be a successful consultant

Getting started as a business consultant can be a challenge. Whether starting out or looking to step change your business we have a programme that can help and support your journey.  Just drop us an email and we will be in touch.

 

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The challenges facing a growing business

Understanding the stages that most businesses go through will help their leaders be better prepared to deal with the challenges of growth.  We have prepared a short document that will help leaders face these challenges.  Contact us for further details and we will share some interesting insights. 

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Business Gamification with ROCKET

ROCKET uses the latest and best of breed gaming simulation technology, bringing all the benefits of experiential learning to training, assessment and team transformation.
As Confucius said, “I hear and I forget, I see and I remember, I do and I understand”.
This is a highly flexible business game for 5 to 15 people and held on one day. The key benefits include:
    Improving business acumen
    Improving problem solving
    Helping team building
 A safe and fun environment
    Experimenting with strategies
    Helping to identify leadership talent; and
 Developing understanding of process improvement

We can facilitate ROCKET along with our colleagues from HEART of business, click here for more details on ROCKET, or contact us to discuss your requirements.

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