Archive for the ‘The workforce’ Category

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Safety or Productivity?

In Productivity culture,The workforce,UK productivity,Uncategorized on June 5, 2011 by Tim Aikens

All too frequently we hear of major incidents where there has been loss of life, injury and considerable financial loss.  This week it was the turn of Chevron’s refinery in Wales. Last year we had the big blow out in the Gulf Of Mexico with BP.  These events often happen in the petrochemical industry – they also happen in many other industries where there is a big safety requirement – rail (Potters Bar), construction (Heathrow tunnel) to name a couple.

The reports emerge and there is often talk of ‘short cuts’ and process ignored.  Without taking a moral stance, my question is simply this.  Is good safety incompatible with high productivity?  From what we read it would sometimes seem that the answer is yes.  I believe the answer is absolutely not!   Good safety is good for business and good for productivity.

First take a look at these regular incidents.  If people were taking ‘short cuts’ then surely that is a sign that their processes were either inadequate or not optimised.  I don’t for a minute believe that anyone really encourages unsafe practice.  But most people want the job done.  So at this point the issue is one of process.  A lot of safety process is a ‘bolt on’. There is the work process and there is the safety process.  Rightly or wrongly they are sometimes seen as different and not an integral whole.  This presents a huge opportunity.  Firstly, to integrate the process.  Everything that is required for safe working needs to be fully integrated into a single ‘how we do this’ working practice.  When this is the case, safety becomes inherent and is much more likely to become part of the culture of an organisation instead of being an enforced extra.  In addition a single integrated process is much easier to optimise as part of a whole than as part of a separate process.

A dilemma that then arises is how exactly do you monitor a work process where the safety elements are integrated rather than as part of a separate process.  The answer to that is twofold.  Firstly, safety experts must be part of the process development.  Their expertise and the necessary requirements need to be built into the core process.  Secondly, ownership and oversight of the whole process should lie with the workforce not safety experts.  This will probably require supervisors to have a greater awareness of, expertise in and commitment to safety.  Surely this is no bad thing!

If we are to be really serious about safety and make the best of the overall process in terms of productivity, then those who do the work have to be accountable for the safety part of the process.  The safety experts need to be involved when a working process is set up.  They also need to be there to provide ongoing support and expertise, and they still need to have their functions of check and audit.

Much of this may not sound a lot different to today. It is! and it would make a big difference to performance both safety and business!

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Privatisation – good for productivity?

In Productivity culture,Public sector,The board,The workforce,UK productivity on February 28, 2011 by Tim Aikens

There has been a lot of press recently about rises in water prices.  One of the Thatcher era’s ‘big successes’ was the privatisation of utilities – water, gas, electricity and telecommunications.  Of these water is the only one to have maintained a monopoly.  Water prices for the average household have gone up in real terms by about 45%  since 1989 (source; Ofwat).  Leakage is till at some 19% of supply!  Compared to the price of many other things, water has become increasingly expensive and yet the commodity has changed little as far as I can taste! (note I am talking about the cost of water, not sewage or drainage)

So is this a case of privatisation not working or are the water companies simply catching up after decades of underinvestment?  OR – does their monopoly position allow them to get away with inherently poor performance despite the existence of Ofwat?  This is not going to be a rant about privatisation or Margaret Thatcher, but simply to ask the question is privatisation necessarily good for productivity and the objective of delivering More for Less?  Another privatised utility that has had problems is Railtrack – the privatised organisation set up to manage the UK’s rail infrastructure.  Network Rail was set up to take over the remnant of Railtrack after it’s failure.  Network Rail is now desperate to introduce large efficiencies in its business.

There are some interesting similarities.  Two utility organisations, set up as private businesses yet not delivering real cost efficiencies.  They are both monopolies.  You have no choice over who provides your water and the train operating companies have no choice over who supplies track and services!  Despite government regulation neither have delivered. There are other similarities. Both have long thin infrastructure (pipes and rail tracks) with points of focus (waterworks and stations).  Both have a legacy of underinvestment.  Both like to think they have delivered a lot – but my water tastes no different and the journey time to my home town of Norwich is little different than it was in 1960!

I have talked in the past of a ‘productivity culture’.  Post privatisation, both management and the workforce stayed essentially the same.  If the people don’t change (either physically or emotionally) the culture won’t change.  If processes don’t change the outcomes won’t either.  Network Rail is being forced by budget cuts to deliver some big efficiencies.  This is an external driver acting on the organisation.  No such driver exists within water (Ofwat seems to rule with a very gentle hand).

The obvious conclusion that privatisation to a monopoly delivers little benefit will be of no surprise to students of economics .  The problem is that they can reap the benefits of a PLC and still behave like a public utility!  Things need to be the other way around,  perform like a PLC, but have the constraints of a public utility.

So what to do?  All the usual suspects come to mind:

  • have a formal and real focus on productivity (with clear, stretching, targets and objectives)
  • change the people or change the people (be both committed and ruthless)
  • processes will need to change and innovation will be vital (difficult without the previous two)
  • without real leadership in the area of productivity little will change!

Network Rail have a lot to do.  The driver for them is financial stricture.  It remains to be seen if their management and workforce can deliver.  The utilities don’t need to worry unless Ofwat really decides to use its teeth.  As well as measuring all the good stuff on water quality and availability, Ofwat needs to get back to basics.  What is the cost of a unit of water and just how efficiently is it being delivered?