UK management was given a strong mandate this week to take over the driving
seat from the Government on improving productivity.
Michael Porter, the Harvard professor brought in by the DTI and the Economic
and Social Research Council (ESRC) to do a study on competitiveness, urged
managers and directors to be the crucial link both inside and outside business.
Porter called for the development of ‘clusters’ of companies and research
institutions working in related industries to lift local economies in poorer
regions.
His comments suggest that Sector Skills Councils and Regional Development
Agencies could play a central part in driving productivity within industry
sectors and regions.
Porter’s message reinforces much of the work undertaken by HR professionals
across the country in trying to convince industry chiefs that investment in
developing workforce skills and creating an environment for innovation to
flourish are essential for growth.
Porter set out three core areas, which need attention in the UK – management,
public policy and structure and institutions.
Managers, he said, should be less inward looking and focus more on
collaborations with suppliers, with academic bodies and related organisations,
to spread knowledge and organise collective action between companies and the
public sector.
Porter is concerned about the take up of modern management techniques,
particularly among UK manufacturing firms and calls for more data on managerial
skills at different levels within firms. Low and middle level managers may need
their managerial skills upgrading, he said.
However, Porter does not put all the blame for poor productivity on to the
shoulders of management. Government under- investment has been key.
"There is a crying need for greater levels of public investment in
skills and scientific capability. Public funding on R&D has actually
declined, which is stunning in an era of knowledge-based competition," he
said.
DTI secretary Patricia Hewitt will examine these findings and further
research by the ESRC is expected. Full findings from Porter’s study will be
published in a report in a few weeks time.
By Jane King
Porter’s pearls of wisdom
– "I thought I was
doing an innocent little review of the literature (on productivity)
and then all the press coverage started. It sparked a nerve and tells us about
the transition the country is in"
– "The UK has a
low bar for calling people managers"
– "Economic
development is a marathon, not a sprint. It takes decades and goes beyond the
capacity of [the] Government"
– "The definition
of management is changing"
– "France and
Germany have got a big legacy of skills in the heartland of their workforces"
– "You should not
be depressed, but excited. The UK is a great economic success story not a sick
child like Germany"
– "The UK is
number three after US and Japan in being home to the top 100 trans-national
companies"
Need to know
Professor Porter’s assessment of UK companies:
Strengths
– Marketing and branding
– Supply chain management, distribution and retailing
– Professional management and the use of incentive compensation
– High level of internationalisation
Weaknesses
– Lack of focus on providing unique value
– Low investment in innovation
– Some indication of low uptake of modern management
– Manufacturing lagging overall economy
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