Productivity Club

Pairing PSF leaders with their peers at clients

The MPF Productivity Club, built on the extensive MPF membership base, lies at the heart of the campaign to set the record straight through ‘educating’ the gatekeepers over the merits of pairing PSF leaders with their peers at clients, and appointing them as independent NEDs at corporates.


CAMPAIGN TEAM

Claire Mason, Man Bites Dog

PRODUCTIVITY AND ENGAGEMENT

Productivity is a measure of efficiency in converting inputs into useful outputs. This is hard to measure for service businesses, with official statistics mainly focused on outputs in the form of changes to sales per head. This has resulted in the paradox of world-class sectors (professional and financial services) contributing little to UK productivity growth over the past decade due mainly to increased regulation, flexible working arrangements and pressure on fees.

When productivity is hard to measure, employee engagement is a useful surrogate with many studies finding a strong positive two-way relationship:

  • The more engaged people are, the more likely their firm is to exceed the sector average in its revenue growth.
  • Engagement is found to be higher at double-digit growth firms.
  • Engaged employees consistently demonstrate three behaviours that improve performance: they are advocates for the firm to co-workers, and refer potential employees and clients; they have an intense desire to be a member of the firm despite opportunities to work elsewhere; they exert extra time, effort and initiative to contribute to the success of the firm.

PRODUCTIVITY AND MANAGEMENT

A statistically significant link exists between the quality of a firm’s management practices and its productivity, with a one standard deviation improvement in the quality of management raising productivity by, on average, around 10%, according to Andy Haldane of the Bank of England. If productivity growth in the second, third and fourth quartiles could be boosted to match the productivity of the top quartile, it would deliver a boost to aggregate UK productivity of around 13%, taking it almost to German and French levels.

The Productivity Commission, chaired by Sir Charlie Mayfield, starts from the assumption that not only is there a long tail of firms with below-average productivity, but many are unaware of that fact. For the same reason that most car-owners believe they are above-average drivers, most firms believe they have above-average levels of productivity.

This suggests a high return to Government policies that improve the quality of management. These fall under four broad headings:

  • Tools that allow management to measure the relative productivity of their firm
  • Skills training and formal management qualifications
  • Tailored advice from specialist management consultants
  • Role models through pairing up management teams at firms with above and below average productivity to facilitate the sharing of best practice.

PSF CONTRIBUTION TO THE PRODUCTIVITY PUZZLE

Most professional firms have very high levels of employee engagement (typically 70%+ compared with the 20% to 30% common at most corporates). Accordingly, the sector must deliver above average productivity. Why? Firm leaders combine independent mindset with the ability to ask the tough questions, based on extensive hands-on experience of nine key drivers of productivity:

  • Practise a 'challenge & support' style of leadership in lieu of the 'command & control' common at corporates
  • Appoint more women into executive management roles than any other sector
  • Scale businesses whose product is people
  • Work across frontiers to build genuinely multi-national businesses
  • Foster high levels of employee ownership, with the power to elect their leaders
  • Select leaders from technical experts who really understand the product and how best to sell it
  • Live by a transparent code of ethical values
  • Develop relationships based on reciprocity and trust
  • Take a long term perspective based on ‘naked in, naked out’ equity structures

Nevertheless, despite their unique mix of relevant business acumen and independent mindset, PSF leaders are seldom viewed as credible advisers to their firm's clients on leadership and management issues nor as effective independent NEDs at corporates.

CURRENT EVENTS

Coming soon...

FUTURE EVENTS

Coming soon...

ELIGIBILITY

  • Leaders and management teams at sector firms
  • Leaders and management teams at clients (x)
  • Governance committees at sector firms (x)
  • Nomination committees and Boards at corporates (x)
  • Investors (x)
  • Private equity and venture capital (x)
  • Headhunters for NED positions (x)
  • Government officials (x)
  • Productivity and governance specialists (by invitation) (x)

(x) Entitled to complimentary membership


Membership details

CAMPAIGN TEAM


Claire Mason

Claire Mason,
Man Bites Dog