The MT Diary: Howard Davies

Management Today, August 1, 2005 | Go to article overview
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The MT Diary: Howard Davies

A nation of David Brents; snake-oil charmer; ID crisis for Labour; butter-fingered Lions.

The dirty secret of Britain's economic miracle is that our productivity per hour is 20% lower than in France and Germany, and 30% below the US rate. Since we work more hours in a year than the French and Germans, we end up with a similar GDP per head; but the Americans work longer than we do, as well as more effectively, so they are richer, on average.

If we better understood the reasons for these differences and correct our inefficiency we could clock off an hour earlier each day. So the LSE's Centre for Economic Performance has been working with McKinsey to find the answers.

Some of the initial hypotheses, such as our poor investment record and lower skill levels, explain only a small part of the difference. Recent work has focused on management. Is it true that British firms are less well managed? Are we a nation of David Brents?

In manufacturing, which lends itself better to this type of analysis, the answer is yes. British management practices - training, work organisation, performance measurement and management, incentive structures, communication etc - seem markedly inferior. They explain a lot of the productivity shortfall against the US in particular. Manufacturing plants owned and run here by foreign firms are just as good as in their home countries, so it's not the workers' fault.

Why is manufacturing management weaker here? It's not obvious, but one suggestive fact is that, in British business schools, not a single manufacturer appears in the top 10 favoured employers. In the US, three out of 10 are in manufacturing; in Germany six out of 10. So are all our top managers in retail, or finance? We now plan to find out, with a similar survey in other sectors of the economy. We'll find some good British managers somewhere, if it kills us.

One element of the American management mix that we are now importing in large quantities is ... snake oil.

You know what I mean: those motivational gurus in the evangelist tradition, who offer an afternoon session in the Albert Hall that will change your life, at the derisory price of pounds 1,395 per person (plus VAT).

So I was thrilled to encounter an Englishman, Chris John Jackson, selling a domestic version of the product to US audiences in New York. 'Jackson's Way' is the latest surefire route to personal and business success. The essence of the message is simple: most people and things in life are entirely pointless. Only a very few are pointful. Retain that insight, and you've got it made.

The audience on East 59th Street took a little while to clock that Jackson was not quite as he seemed. He won last year's Perrier award for stand-up comedy at the Edinburgh Festival. But they caught on eventually, and were as convulsed as I was by his slide show and key 'takeaways'.

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