2 November 2006 US productivity grinds to a halt
US labour productivity growth was at a standstill in the three months to the end of September, the latest indication that the American economy is slowing.
With analysts expecting productivity to grow 1.1% in the third quarter, the zero growth rate from the Labor Department came as a surprise.
Unit labour costs were up 5.3% from the same period in 2005, the worst annual rise in 24 years.
The figures will increase inflation fears at the US Federal Reserve.
'Growing concern'
"Both the productivity and labour costs were pretty weak numbers and it adds to growing concern that economically speaking things aren't looking all that wonderful," said Collins Stewart analyst Michael Panzner.
"The combination could lead at least some investors to start talking stagflation."
The Labor Department measures productivity as the amount of output per hour of work.
Its latest figures come just a day after separate data showed that the US manufacturing sector grew at its slowest pace for three years in October.
Productivity improvement commandments
You will go far in your career if you embed these truisms into your personal approach towards management and leadership.
- Discard conventional fixed ideas.
- Think of how to do it better, not why it cannot be done.
- Start by questioning current practices, methods and resources used. Do not make or accept excuses.
- Others will follow you, if you continually seek improvement. Leave the search for 'perfection' to others.
- Do it right away even if it will only achieve 50% of target.
- If you make a mistake, correct it right away.
- Throw wisdom at a problem, not money.
- Seek the wisdom inherent in your people rather than the knowledge of one.
- Ask 'WHY?" five times and seek root causes.
- Don't ask workers to leave their brains at the workplace entrance.
Expertise required
The skills required to improve productivity are much simpler than most people think or believe. We all know the phrase 'time is money' and to a great or lessor extent we have expertise in the 'money' part of this truism. We speculated on how we can earn more, save more, manage it better, get a better return on the money we invest and so on.
Given that time is money, all we really need to be is experts in time, to produce the improvements in our organizations.
Evaluate how things are done currently
Some simple work measurement (no stop watch / study board required) and some analysis and you will come up with improvements in the ratios of input resources (essentially time and money) and output (goods or services) in your work place.
The simple schematic below is your starting point. If you understand this conceptual model, your organizations' productivity and your career prospects are in for a boost.
Develop Conceptual Models
These resources are essentially about improving productivity. We have put together in our online articles and include in our PDF publications conceptual models to help you understand the factors involved in improving productivity. Productivity is about making work:
- Simpler
- Easier
- Quicker
- Rewarding
- Safer
- Fun
for employees. Conceptual models enable you to quickly understand, develop and adapt the model to your specific workplace situation.
The better your understanding what is going on in your workplace and of the factors involved, the greater your chances of 'sniffing out' better ways and getting your recommendations installed as new practice.
