Productivity and performance culture

Last week when I received a call from a person that I have much respect for in the public sector – Dr. Damitha De Zoysa – saying that she was appointed as the Secretary to the Ministry of Productivity, the first thought I shared was that when the unemployment level of a country is at below five per cent like in Sri Lanka, in the backdrop of a strong economic agenda of where the tourism industry is targeting 2.5 million visitors, the tea industry targeting 2.5 billion dollars from the current 1.5 billion, the software industry aiming at $1 billion and not forgetting the booming construction industry, the key area of focus must be how to drive up productivity.

I am glad that a competent person of the calibre of Dr. Damitha has been given the task to drive this sector, given that she comes with a strong work ethic of over 10 years from the Ministry of Finance and Planning armed with a honours degree in economics from the University of Peradeniya and PhD in agricultural economics that ideally fits the Sri Lankan template.

My view is that if we do not address this with a strong private-public partnership, the only other way is to import talent from countries like Bangladesh and China, which is being done on a small scale as we speak. This is not healthy for a developing country like Sri Lanka wanting to attract top dollars in FDIs. I hope the new Secretary will get the support required to take the Sri Lankan road map to a performance culture focusing on a productivity drive.

Crossroads

One might feel that creating a performance culture in Sri Lanka is easy, but we have to note that Sri Lanka’s laidback culture, whilst it is unique to Sri Lanka from a brand identity perspective, when it comes to driving productivity up in an organisation it becomes a major blocker.

Research has revealed that the Sri Lankan workforce in general are emotional in nature and tend to respond to affiliation cues like a pat on the back or a kind word, than for career achievement, increase in remuneration, and greater recognition, which are aspects prevalent in the West. This character trait, together with the island-based mentality, makes it tough to drive the country’s productivity.

Wal-Mart and Ceylinco

Organisational culture has frequently been simplified and expressed as “the way we do things here”. It is more than that. It is perhaps, above all else, an expression of the values that drive all activities within an organisation and the norms or rules that ensure that those values are implemented in practiced.

At a retail store like Wal-Mart, values of the company receive more than lip service from the senior management and employees alike. During the times of their founder CEO was alive, he was at the shop floors talking to the customers to understand how better this No. 1 retail store in the world could delight a customer.

Let me cite an example. He found out that most housewives equate ‘fresh fish’ when having to purchase a whole fish taken out of an ice bath and not when it is packed in trays. So today Wal-Mart has fish in baths of ice, in line with customer perceptions of what fresh means. Hence we see culture driving behaviour and it lies at the heart of performance.

Readdressing processes provides a unique opportunity to emphasise the values and norms that lie behind them to ensure that they are shared across the organisation in a company or a department in a government. In Sri Lanka the best case in point was Ceylinco. Even with the whole country on fire over the alleged 26 billion rupee financial scandal of the corporate company, the insurance arm with absolute focus kept its mind on the customer and maintained its productivity and performance culture. The business has climbed to Rs. 20.1 billion with the EPS crossing the Rs. 50 barrier in 2011, whilst the brand value registering Rs. 4.5 billion last year, which to my mind is outstanding leadership and strong all around business management. A performance culture at its best.

Lean and mean

If one analyses deeper, successful organisations like Royal Ceramics or companies like MAS in Sri Lanka, which are case studies for sprucing productivity, we see that for a ‘lean’ organisation to exist there has to be lean processes, a proven technique even when applied in the public sector. The best case in point of the latter is the passport office in Sri Lanka that has proven that productivity can be improved with lean processes and structures.

This market-driven approach of creating a performance-oriented culture requires a system where all processes are reconsidered and carefully integrated to ensure customer service. If we take Federal Express, which is a leader in the courier business, it has 247 planes that land from around the world at Mississippi Airport between midnight and 3 a.m. and then, with a semi-automated sorting out process, a parcel is delivered the next day to a doorstep of an office. For governments, this can mean a sea change in attitude with the citizens being regarded as the customer of government, however when applied it really works.

In Sri Lanka, apart from the passport office, even if we take a large entity like the Sri Lanka Standards Institute (SLSI), based on the need of a customer for the type of certification required many options are offered, which has resulted in not only achieving a performance culture but the organisation becoming a profitable entity. The latest information stemming out is that the organisation is targeting to be a one billion rupee entity.

A very important point to keep in mind is that if one is to maintain such performance, it is imperative that strong leadership together with an effective rewards strategy is at play. If not there cannot be a performance that guarantees a continued delivery of the service. This happens to be the essence of performance culture.

Best practice

W. Edward Demming said “what cannot be measured cannot be managed”. In order to ensure that lean processes deliver as expected, measurement is required. Strategic objectives need to be broken down to tactical measures of performance that all involved must understand, accept, and achieve. In Sri Lanka Pizza Hut is a typical organisation that monitors performance. If a pizza is not delivered to a table within 15 minute after placing the order, the pizza is free to the customer.

However, we must note that when targets are imposed, people find ways of satisfying them on ‘paper’ that often have an adverse effect on performance. If people are to take responsibility for performance at every level, they need an opportunity, together with management to set their own targets based on the strategic demands of the organisation.

Research has revealed time and time again that when people are given the opportunity of setting their own objectives, the role of management becomes more a task of injecting ‘reality’ than having to encourage them to achieve more. Involvement increases commitment, efficiency, and morale. Experiences in both companies and government departments have shown that everyone helps solve problems. If performance falls, when there has been a cohesive team that has build the targets in a culture with lean processes, the turnaround is faster and stronger. The case in point is the British Government, which has achieved a productivity increase of 60 per cent.

Leadership credibility

Nobody should assume that identifying and developing a true performance culture is necessarily easy. There may be significant existing cultural barriers to be overcome. Especially in government departments in particular the view that “the way we have always done things must be right” can be entrenched. The good news is that experience has shown that once people in an organisation begin to enjoy the benefits of “working lean,” new attitudes become grained and unshakable in an amazingly short time.

Effective leadership is a prerequisite for success. Unless the top management is prepared to lead by example, addressing where necessary existing leadership problems, there is limited hope that even the most committed employees can achieve.

Lee Kuan Yew was the best example of where a visionary leader led a country to achieve heights by addressing the key issues of corporate Singapore. We in Sri Lanka have many examples in the Small and Medium Enterprises who have demonstrated leadership which has transformed a company to build a culture that drives people to higher performance – Siddhalepa, Kandygs Handlooms, Odel, and House Fashion to mention a few.

Lean demands that leaders have the courage to identify and resolve deep-seated organisational problems. It is not a quick fix. It is a strategic and tactical tool that must be applied consistently throughout the organisation.

Conclusion

I feel politicians, business leaders, senior public servants, and academics have a role in clarifying the benefits of lean processes. The public both in the role of customers and employees need to be convinced that the approach offers them advantages now and in the future. Ceylinco Insurance is a classic example of this fact, as shared before.

Driving towards a performance culture has brought about many benefits along the way, but it is a long journey and every journey begins with a single step. This is exactly what companies like Wal-mart and Ceylinco did.

(The author serves the United Nations (UNOPS) as the Head of National Portfolio Development – Sri Lanka and Maldives. He also serves on many boards of directors in the private and public sector and is an award-winning marketer and business personality. Rohantha is an alumni of Harvard University (Boston). The thoughts are strictly his personal views.)