PPC & Productivity

Mon, 01 Dec 2008 12:59

Rod Burn, Director of Organisational Performance at Murray & Roberts, discusses the concept of leadership, and how getting back to basics, and face-to-face with your team can change the very soul and performance of your business. It all comes down to a simple truth – ordinary people really can do extraordinary things.

Performance, Productivity, Value Creation

In business, there is a fundamental logic that cannot be argued – maximum efficiency, minimum waste, and lowest cost lead to healthy profits and a valuable share price. Indeed, the logic is simple but very few managers know how to achieve it.

Rod Burn believes that managers often have not the first clue how to engage with, or conduct the workforce to get them to produce extraordinary results. Furthermore, global research has shown that companies creating measurably higher levels of workforce engagement show consistently better financial results than those who do not. While it may seem like common sense, very seldom is this mindset applied as common practice in the market today.

Breaking it down into a ‘simple case of problem solving’, South Africa needs an industry system that supports aspiration, one that takes people who are willing to work, and then teaches them quickly – a far reach from the weak one currently running the country.

 

The Weakest Link

Rod says, “Looking at the construction industry, while it is performing well, the major constraint is skill. Without these essential skills, which allow increased production and efficiency, margins will have to get thinner. If you ask most of South Africa’s leaders what causes these thinner margins, very few will provide the straight answer that is, ‘I have no way of getting my workforce to deliver value’.”

In essence, there is an elementary failure in dialogue. Rod describes this as an alienation of the two cultures, where there is an inability of the leader to talk both to the market and to the labour force. The two languages are completely different. For example, using one form of dialogue to work the company share price, and then another to instil a sense of pride, passion, and purpose in the labourers.

“It’s a product of our history. We took that pride and passion away from our people. We took it when we turned them into units of labour, told them to come to work every day, on time, and do what we told them. Our current system is reminiscent of an army-style hierarchy, where supervisors and foremen seek to police and control the workforce, instead of inspiring performance.”

As history has plainly shown, this model only works with charismatic, naturally inspirational leaders, people who lead from the front and create a future for their people. A workforce will believe in a leader who acts on their behalf, with their best interests at heart. Great leaders are those who align and engage themselves with the people they seek to lead, thereby earning their trust and respect. Great leaders make people believe in themselves. 

“This is where the management system in South Africa is failing. In industries like manufacturing and construction, value is created on the shop floor, in the engine room – not in the boardroom.”

So, addressing failure from the top down, how can a company drive value back up again? The answer is fairly logical, some call it ‘common sense’. Leaders need to step out of the boardroom and onto the shop floor. Leaders need to help those workers understand, in their own terms, the essence of value creation.

“I realised early on in my career, when working with trade unions, that an adversarial model was not what this economy needed. I tried to understand what one could do and say to managers, and leaders, in order to make them act differently, to everyone’s benefit. A union member once told me, “If two strong bulls fight each other, all they do is kill the grass beneath their feet”.”

After a long period of locking horns, yet quietly learning the simple lessons, it would be Pretoria Portland Cement’s (PPC) loss of 70% of shareholder value in four years that became the catalyst for a very fresh, very simple, and very effective business model in South Africa.

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