Why is it that British workers put in longer hours than many of our overseas
competitors and yet our productivity still lags up to 40 per cent behind? For
years, academics and experts have been putting forward answers: we don’t train
our people; the stockmarket forces us to concentrate on short-term results; our
regulatory framework is too strict; we lack the competitive geneÉ
A year ago, The Work Foundation joined the debate when it set up its Work
and Enterprise Panel of Inquiry – an employer-led initiative involving some of
the UK’s top firms, including Lloyds TSB, Tesco, AstraZeneca, Microsoft UK,
Manpower, and employment law firm, Eversheds.
Using a mixture of qualitative and quantitative research, the panel is
analysing the links between productivity and high-performance working and will
deliver its report at the end of October. But as it moves into the last stages
of its research it has become clear to the panel there is no single driver of
productivity. Rather, the panel believes there are five key themes. These are:
people management; shareholders; customers and other stakeholders; regulation;
and innovation. None of these can be looked at in isolation – but together they
make for high-performance working.
There is no research that directly links productivity and innovation. But
broadly speaking, innovation is doing something new and in business terms this
has, until quite recently, been confined to technology and processes – we
create new products or we free up our delivery mechanisms, and we engage the
wider workforce with a classic suggestion scheme and a bottle of scotch to the
Now business is coming to understand that innovation is about much more than
that. It is about how we work and it happens every day. The Work and
Enterprise’s Panel has interviewed chief executives, managers and employees who
reinforce the message that innovation is not confined to the research and
There is a danger that our 1990s obsession with re-engineering and change
management has confused our understanding of innovation. Yes, innovation leads
to change, but in an evolutionary way. Regular restructuring, while keeping
people on their toes, is not innovating, nor is it creating an environment
where innovation can flourish.
HR has a pivotal role to play in ensuring that firms use innovation in its
true sense to drive performance.
You can teach people to think, but you have to organise people to innovate.
Every aspect of people policy and practice should be geared to creating an
environment where innovation and creativity can flourish.
But the HR team must be innovators too. HR has been managing other people’s
failure and picking up the pieces when business plans go wrong. It is becoming
clear from the Work and Enterprise Panel’s research that this isn’t the way HR
works in a high-performing organisation.
In the high-performance firm everyone is an innovator and every function is
looking for the next big idea.
By Rebecca Harding, Chief economist, The Work Foundation