Is Productivity an essential goal or another misleading statistic?

Why is productivity in the news a lot recently?

Productivity often comes up when people discuss how well the British economy is doing. Commentators usually link this with the debate about Brexit: the worse we are doing, the more  they blame our imminent departure from the EU. On the other hand, the better we are doing the more people say we are going to benefit from leaving. I do not intend to enter that argument in this blog post. People use various statistical measures to show how we are doing. These include growth, of which I have written recently, and unemployment. The debate about unemployment turns on whether you think an increase in part-time, low-paid or zero-hours jobs is a sign of success.  (For whom?)

What about productivity?

One statistic which many people look at to support their arguments is productivity. Almost everyone agrees we want this to increase, but unfortunately most of the evidence suggests we are lagging behind other comparable countries in this respect. Many people, rightly, have been discussing why that is, but I want to ask a different question: is productivity a meaningful measure of our economic performance? But another question comes first.

What is productivity?

Productivity is the measure of output per person per year (or per day or hour if you like). It seems obvious that you want to produce more for the same inputs or to produce the same amount with reduced inputs, right?

What’s wrong with using it as a measure of performance?

It sounds simple. That’s the trouble. Real life is not so simple and is getting less simple every day. It was probably simpler  when most economic activity involved producing physical products. This could be cars, fridges, tins of beans, eggs or even computers. Increases came from improved working methods. In Britain, we once had a lot of inefficiencies built into our production processes, partly due to the reluctance of workers, and especially the trades unions, to agree to change anything. It was also partly due to management’s failure to review and innovate. Therefore, we made big strides forwards when attitudes changed. That was years, possibly decades, ago. There is less scope for such big, simple improvements now.

How can productivity be improved?

It usually comes from mechanisation, meaning the use of more efficient machinery or of better IT. Of course, you can also achieve it, at least in the short run, by making people work harder, through either incentives or penalties. That approach often yields poorer results as time goes by. It is also most effective when people are working at fairly simple, repetitive, easily-measured-tasks. Apart from questions of exploitation and job-satisfaction, that approach has severe limitations. Nowadays we need people to work not just harder or faster, but better. Think how you would measure the productivity of a computer programmer, a carer, a fitness instructor. Even in agriculture, we now want a more sophisticated attitude. It is not just about maximising food production. What about quality? Animal welfare? The environment?

Don’t businessmen (and women) understand productivity?

I think they understand it better than politicians and journalists. They want to maximise profits. That means increasing output only if there is a demand for more of the product, otherwise you get overproduction. Money spent on marketing does not improve productivity, but it might improve profits.

Doesn’t improved productivity lead to more unemployment?

Some people fear that improved production techniques will lead to job losses, unless there is enough demand to sustain greater output. In any one business that could be true, and it could also be true in any one sector. In the economy as a whole , the level of unemployment depends of the total amount of economic activity, which is driven by government policy and international factors, not by technology. (Am I a keynesian? You bet!)

Should we stp measuring productivity?

Not necessarily. It might highlight areas of the economy that need attention. However, more sophisticated measures are needed and we need to ask what we are trying to measure. You might like to read, or re-read, my article on the Three E’s of Management.  

Or you might like my book How to Avoid Being Misled by Statistics.

The seventh and final (?) phase of the creative process: implementation

What is implementation?

I have written about creativity in business and looked at six of the seven phases. Now it’s time to consider implementation. This is when you go live. In the case of a novelist, it is when you publish.

Are you ready for implementation?

It sounds simple. You know it won’t be. Make sure you have gone through all the other six phases properly and acted on all the lessons you have learnt on the way, especially Phase Six – Monitoring and review.

Is implementation the end of the process?

Yes and no!  Don’t stop monitoring and reviewing and don’t be afraid to change anything in the light of new information, even after you have gone live. If problems appear, that you hadn’t come across in the pilot, don’t ignore them. Now it’s time to get on with your next project. Hopefully you have always got a few at different stages. Creativity need not end just because you’ve finished one project. I’m always working on my next book.

An early author writing his manuscript.
An early author writing his manuscript.

If you want more on creativity in business go to James Taylor’s website. I learnt a lot from him.

Is all insurance fraud equal? What about the corporate variety?

Is there a kind of fraud I have not mentioned before?

I have often written about fraud in general and fraudulent insurance claims in particular. There is one type I have so far omitted to mention. I thought of this when reading a post by Barry Zelma in his insurance fraud letter, which is the source of a lot of useful and entertaining information.

Man with magnifying glass - looking for evidence of fraud
Man with magnifying glass – looking for evidence of fraud
Businessmen defraud insurers!

Barry points out that some businessmen give false information to their insurers in order to reduce their premiums. This can include the total number of employees, the nature of the work (to understate the risk) and total turnover.

The fraudulent reductions in premiums can easily amount to many times more than the amount a claimant would get in a typical personal injury claim.  Tens or even hundreds of thousands compared with a few thousand.

Are insurers are the only victims of this kind of fraud?

Perhaps you think this does not affect you, whereas a fraudulent claim against your business obviously would. Think again! The insurance companies must recoup their losses somehow. Guess! Yes, it’s our premiums.

The other victims of this kind of fraud are genuine claimants (they do exist!) who find the insurers  refuse to pay their claims and either lose out completely or have to drag the money out of the business by a time-and-energy-consuming court case.

I hope you are not among the perpetrators of such frauds. Play fair!

The sixth phase of the creative process – monitoring

Where does monitoring fit with creativity?

Not everyone thinks of monitoring as part of the creative process, but I hope to show that it is. I have written about creativity as a process rather than just a one-off experience and I have explained the first five phases. You might think that the fifth phase, elaboration, was where it finished. You have thought about your project, done the preparation, had inspiration, evaluated it and now you have set it out in detail. Surely, that’s it?

Can you implement without monitoring?

No! You need to look at the way it will work in practice, iron out the wrinkles and make it actually workable. As a writer, this is where I need to edit and proofread my manuscript. I have been appalled at how many mistakes I have found at this stage, however good I thought the draft was, even after a couple or more rewrites!

How does the monitoring phase work?

If it is possible, now is the time for a trial run, a pilot scheme or some other way of trying out your ideas in the real world but keeping your options open. Even if you have no option but to implement all in one go, make sure you treat the first few months, perhaps even the first year, as experimental. Monitor everything that may be relevant: costs, sales, output, complaints, errors, feedback from staff and customers. Identify risks you hadn’t thought of before and look at the control measures. Are the controls effective? Are any redundant? Be ready to learn and change things. Pride can get in the way. Remember your aim is to produce as good a final product as possible. Admitting mistakes is a step in the right direction.

What comes after monitoring?

Next, I will be writing about the final phase: implementation.  I learnt a lot about creativity from James Taylor. If you want more on this subject go to his website

Man with magnifying glass. One approach to monitoring your business.
One approach to monitoring your business.
Man with magnifying glass and computer. Another approach to monitoring your project
Another approach to monitoring your project: a magnifying glass AND a computer.

Growth: an international misuse of statistics?

Who says international growth statistics are misleading?

I have written about the risks of growth and about the misuse of statistics. For more on the misuse of statistics, go to

However, I have not written about the misuse of growth-statistics, which David Pilling writes about in his book, The Growth Delusion. The author quotes former President of France, Nicolas Sarkozy, that we are ‘mismeasuring our lives’.

How do people measure growth?

Gross Domestic Product (GDP) is the main index used. Everyone wants to see this number increase. We use it to compare ourselves with other countries, and with ourselves in previous years. What is it? It is the total value of goods and services produced in a country in a year, excluding investment income from abroad.

Why do GDP statistics not give a true picture of growth?

The powers that be have chosen a single measure. This gives the impression of simplicity and appears to make comparisons easy. The trouble is that life is not so simple.  GDP will not reveal regional variations, or even the experiences of different groups of people in the same town. There is plenty of evidence that regional and other differences in income have been widening in the UK for some time. Different people’s real incomes are moving in opposite directions, because their prosperity depends on where they live and what industry they are in.

You can read about other criticisms of the way people use GDP in The Growth Delusion.

Do misleading growth statistics create a risk?

David Pilling and Nicolas Sarkozy have recognised a risk, which is that people will think they are being deliberately misled. They will hear how well our economy is performing,when the evidence of their own eyes contradicts that assertion. This could add to the distrust in experts of all kinds, which would be very bad for democracy. I do not want to take that risk.

Let’s find better ways of measuring prosperity.



Risk Predictions 2018 – do others agree with me?

It is not too late to look at predictions for the new year.

I have written about my predictions for the risks to watch for in the coming year. These included the cyber risk, Brexit, the supply chain and climate change. Many others have offered their views. I am pleased that I am not unique in my opinions and I was particularly interested in an article in Time magazine on 15 January by Ian Bremmer. He gives a longer list than mine. Have I missed something?

What’s in the Time list of predictions?

I will not reproduce the article here, but I list the main points.

  1. China’s rising power
  2. World/regional conflicts escalating
  3. The tech cold war
  4. Mexico’s forthcoming election
  5. US – Iran relations
  6. Public loss of confidence in major institutions
  7. Protectionism
  8. Brexit and the Conservative Party
  9. Nationalism in South Asia
  10. Instability in many parts of Africa

I do not disagree with Ian Bremer very much on his assessments.

I don’t remember where Donald Trump fitted into any of the risks listed, but I’m sure he’ll play a part in influencing them.

Why are Time’s predictions different from mine?

The Time article looks at global risks, whilst I tried to concentrate on ones you and I need to be most aware of. I did not mention risks which we cannot control or do much to mitigate but I advise you to think what you can do to prepare for the risks that are most relevant to your business. Some things, regrettably, we have to leave up to the Government!

For the full article and more, go to

Who does President Macron think he is – and are you like Jupiter?

Firstly, President Macron is not Scottish

Those who thought his name was MacRon were wrong.

The Scottish Saltire: not the flag for Emmanuel Macron
The Scottish Saltire: not the flag for Emmanuel Macron

And, by the way, former president Obama is not of Irish descent. Not O’Bama. He had enough trouble proving he’s an American, although he is possibly the first US president not to claim Irish ancestry.

What’s Jupiter got do do with M Macron?

In an interview with Andrew Marr, the French president said people had likened him to Jupiter, and he apparently accepted the comparison as reasonable. Not everyone in Britain is familiar with Jupiter. Many people know it is the name of a planet, but not everyone knows that, like many planets, it was named after a Roman god.

Does M Macron think he’s God?

No! I think that is the point. Jupiter was the chief of the gods, but his powers were limited. Not only did he have trouble keeping the other gods in order, but also, like all the gods, he had only limited power over humans. He was very different from an omnipotent creator, such as the deity of Christians, Jews and Moslems. (Let’s not argue right now as to whether those are all the same.)

What’s M Macron’s identity got to do with you and me?

I think the president was saying that he could lead but not dictate. He does NOT think he is God Almighty, just ‘first among equals’. Do you try to manage or dictate? We all need to have realistic ideas about who we are and what we can do. Is it time to review your management style?

What does the Carillion crisis tell us about Risk Management?

I did not mention Carillion in post about New Year Risks

I did not foresee the Carillion crisis in particular, but I did mention the supply chain risk. How right I was.  We are all increasingly dependent on each other as the economy becomes more interconnected, which leads to one of my concerns about Brexit.

Dice. Is that how you manage your business? Was it how Carillion was managed?
Dice. Is that how you manage your business? Was it how Carillion was managed?
Was the Carillion crisis unforeseeable?

If you think this is all about hindsight, you are wrong. I now know that it was foreseen by many commentators, although I wasn’t one. Of course, I’m not in the government, but they were warned and should have taken steps to mitigate the risk, and perhaps some of those affected could have done more to protect themselves, as the banks have, I believe.

Did you know that the French pronounce the name of this company like “Carry-on”? What can I say?

Whether you have dealings with Carillion or not, learn from this
  • Check not only your suppliers, but their suppliers, and ask yourself how safe they are.
  • Try to avoid becoming too dependent on any one supplier.
  • Look at your clients and don’t become too dependent on any one of those.
Does this advice apply when you are dealing with a company as big as Carillion?

Of course, I recognise that my advice above may be unrealistic in some circumstances, but you always need a Plan B that does not depend on your biggest supplier or client, as far as possible.

I also know that many people thought Carry-on was too big to fail, because the government wouldn’t let it. Time will tell, but I remember Lehman Brothers.

Is the Carillion crisis an opportunity for some?

Remember that the other side of risk is opportunity. If you are a competitor of this company for any of the services they provide, perhaps you will get an opportunity to tender, or re-tender, for one of their contracts. It’s an ill wind that blows no man any good. Are you ready?

Stacks of money. Could you benefit from the Carillion crisis?
Stacks of money. Could you benefit from the Carillion crisis?


The Risks of Consulting – remember the Referendum!

What consulting risks do I mean?

I am not thinking of the risks involved in consulting for a living, like me. That could be a series, but not now. I am looking at the risks of holding a consultation, either withing your business or externally.

Do I not now recommend consulting?

I have written about the Four C’s of management, and Consult is one. It is definitely a Good Thing, but like anything else, it has risks, and they need managing. The Referendum on the EU was a classic example of how not to do it. See my other blogs on that subject.

The First Risk of Consulting: confusing questions

Remember “Brexit Means Brexit” and weep! Nobody knew then or now what Brexit means. What was it people wanted to gain or to lose?

  • Immigration?
  • Benefit tourism?
  • Foreign students?
  • Regulation?
  • Agricultural subsidies?
  • Our contribution to the EU budget?
  • Access to other markets, such as China, the USA or Japan?

Always word the question, or better a series of questions, so that you will know what the answer means.

The Second Risk of Consulting: failure to manage expectations
  • Some people thought leaving the EU would happen as soon as the votes were counted.
  • Others thought all foreigners would be sent back.
  • There were even some who thought we would have an extra 350 million a week for the NHS!

This has led to discontent. Do be clear as to the likely process and timescale for implementing the results of your consultation.

The Third Risk of Consulting: Polarisation

Many people now treat the 48% who voted Remain, plus all the non-voters, as anti-democratic if they raise any criticisms of the process or express any views as to the way forward.  The Brexiters claim to represent The People. Could your consulting lead to a feeling of anger among the “losers” and/or arrogance among the “winners”?

How to reduce the polarising effect of consulting

I did not specifically cover consulting in my book How to Avoid Being Misled by Statistics, but you might find it helpful when interpreting the results of your next consultation exercise.

The front cover of 'How to Avoid Being Misled by Statistics' which could help you with your consulting.
The front cover of ‘How to Avoid Being Misled by Statistics’ which could help you with your consulting.

On most issues, a simple “yes/no” answer is not much use: there will be a spectrum of opinions, like this.

  1. It’s an overdue improvement
  2. I quite like the idea but I’ve got reservations
  3. Don’t know/don’t mind
  4. I don’t like it, but might give it a try
  5. Over my dead body

You will often find the proportions in each category evenly spread or forming a gaussian bell-shaped curve. Getting 51% to say “Yes” doesn’t man you’re home and dry. How committed to the idea are that 51%? They aren’t all going to be in category (1). What can you do to get the ones in category (2) on board?

And what about the other 49%? How many are going to be won over, how many will put up with it but winge a lot, and how many are going to resign, take their business elsewhere, take legal action, demand a public inquiry, start a protest movement or join a terrorist organisation? Obviously, it will depend on the seriousness of the issue, but you get the point? How many employees, clients, suppliers or volunteers can you afford to lose?

You need to think how to manage the minority so as to win them over if they are in categories (3) and (4). Can you amend the plan to take into account their concerns?

The Final Risk of Consulting: complacency.

You probably know that the majority are not always right, but it is tempting to think that, if you’ve done a  “successful” consulting exercise, you have all you need to enable you to go ahead with your project.

Wrong! The majority could be wrong. You still need to do enough research beforehand and also to monitor for signs it’s not working. And have a plan B. It’s a good job we’re not talking about Brexit, isn’t it?




2018 – Happy New Year: Ready for New Risks?

What New Risks are there?

Most risks are the same as in the old year and previous ones, of course, but the level of some is new.

Three dice - is this how you will manage your new risks?
Three dice – is this how you will manage your new risks?
Is anything really new?

One fairly new risk is Fake News, which has probably always been around but has become more of a phenomenon in 2016 than ever. I agree with David Cameron and Barak Obama that this is very dangerous, as some people don’t know who they should trust, whilst others are apt to believe lies put out on social media, especially if they listen only to people they think they’re going to agree with. If people believe either anything or nothing, will they believe your messages? I’m talking about:

  • sales
  • offers
  • guarantees
  • your businesses community involvement
  • replies to complaints or allegations

This means that we need to manage the reputational risk more cleverly than ever.

Want to talk to me about any of the above? Send me an e-mail or use the contact form on the website. Or even phone me 01925 445215.

Whatever you choose to do, I wish you a