New Zealand’s productivity problem isn’t new. However, in the face of intensifying global forces - unprecedented economic and political volatility, technological disruption, and disillusioned workforces - it’s becoming critical.
While governments and commentators continue to talk about these things as macroeconomic problems, for most of us, the truth is closer to home.
New Zealand’s productivity problem is a direct result of performance constraints on the ground.
Despite our ingenuity, we’re yet to unlock the potential that other similarly developed nations take for granted. With the Government focused on getting the books back in order, the responsibility falls on the business community.
To respond effectively, we need to address the external challenges we face, and the internal systems we control.
The external challenges: What we’re up against
Our 30 years assisting leaders tell us the level of disruption organisations are experiencing today is greater than at almost any time in living memory.
1. Unprecedented volatility
Political and economic instability, climate change, and regulatory disruption are dynamic and unpredictable. However, despite the concern, the majority of organisations are continuing to work as if nothing has changed. The problem with a wait-and-see approach is the risk of being left behind, while the problem with conventional planning is that it no longer works.
2. Technological disruption
AI, automation and digital convergence are transforming entire sectors. However, most leaders today are focusing on the technology rather than their ability to leverage its benefits as an organisation. To get ahead of the curve, leaders need to think about how to create a culture that thrives in the new world we’re entering so they can transform the value they add to their stakeholders. In short, technology needs to be seen as a tool to enhance their people’s impact and effectiveness, not simply a means by which to replace them.
3. Disillusioned workforces
As research shows, employee engagement across the board continues to decline. However, because job prospects are thin, people are no longer leaving; instead, they’re quietly quitting. The fact is, organisations need more from their people to do better, while at the same time, workers want to play a bigger part in their organisation’s future. These forces are not passing trends. They are structural changes that will affect every industry in every region, meaning if we don’t adapt, the performance gap between New Zealand and the rest of the world will widen.
In summary, these external challenges aren’t short-term trends. They’re permanent features of the new world we’re entering.
The internal challenge: Outdated, disconnected systems
Although external challenges matter, they’re not the biggest threat to the majority of the nation’s businesses.
Instead, the real issue lies inside our organisations in terms of the way we lead, manage, and operate. The fact is, organisations across industry are continuing to apply outdated models that weren’t designed to handle this level of change, hence they’re not experiencing the uplift they were hoping for.
People aren’t the problem either. It’s the ongoing use of outdated compliance-based policies that are keeping businesses in check.
Productivity doesn’t arise from economic theory; it’s a consequence of how well people are enabled to do their jobs.
The five drivers of workplace performance:
Over the past three decades, we’ve identified five core disciplines that together determine how effective and productive an organisation’s workforce is:
- Strategy: Clear intent, shared by everyone, not just leaders
- Culture: A deliberate way of working, not just ‘how things are done’
- Leadership: Focused on enabling people to perform, not managing them
- Capability: Ensuring people have the tools and capability to succeed
- Performance Management: A system that ensures people’s success, rather than a system that monitors them.
While these drivers exist in every organisation, they are typically disconnected processes that are managed in isolation.
Disconnected systems result in wasted effort, employee indifference, and substandard engagement. This is because they’re informed by different models and managed by individuals in entirely different ways, meaning they can never be aligned nor, therefore, integrated into a business as its ‘way of working’.
Integrating these systems, on the other hand, transforms people’s clarity, energy, and productivity from the inside out. When businesses get these things right, it unlocks entirely new levels of strategic thinking that lifts their impact and effectiveness in the market.
Looking ahead
Addressing the macro challenges matters, but transforming how organisations perform on the ground is how we will lift our productivity as a nation.
This campaign is designed to support our efforts to achieve it. Over the coming weeks, we’ll be sharing further insights to help leaders take the next step in their organisation’s journey.
