Eliminating productivity roadblocks: overcoming the top barriers to improved U.S. productivity--poor management, poor leadership and poor communication--all involve people, and need to be part of every senior manager's mindset.

• Author: Klempa, Miklos
• Position: Productivity

U.S. companies are falling short in one of the most basic aspects of organizational efficiency--managing people. It's no coincidence that the top barriers to improved productivity, which arise consistently in thousands of business reviews, are closely aligned to people in terms of management, leadership and planning of work.

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The good news is that over the past three years, there has been a widespread global improvement in productivity, defined as a decrease in terms of number of working hours wasted. Further, the U.S. is among several countries that stand out in this recovery. Yet, despite this positive news, close to 29 percent of company time in America is still unproductive, costing the economy an estimated $598 billion annually.

While U.S. companies "lose" the equivalent of 33.5 days per worker per year, more than one quarter of U.S. executives who participated in a recent productivity survey indicated that they have no targets established for improving productivity. Surprisingly, even when compared to other countries, U.S. executives were found to be less ambitious in setting targets.

So, what are the key drivers contributing to productivity roadblocks and preventing firms from operating at their true capacity? In the survey, conducted by Proudfoot Consulting, U.S. executives ranked three closely-interrelated areas as the top barriers to productivity in their organizations: 1) poor management, in terms of efficient work planning and organization; 2) poor leadership, in terms of management demonstrating and leading change; and 3) poor internal communications. Based on these results, there appears to be a lack of alignment within executive and managerial ranks. The result? Strategy is not rolled down into actionable steps.

It's All About the People

Running a large corporation today places huge reliance on resources, be it information and communications technology, warehousing and logistics, premises and other physical assets, supply chain partnerships and so on. While these resources often change--according to industry sector and geography--one constant resource, common to every corporation, is people. Yet, people are, arguably, the most challenging of any resource to manage efficiently.

Management still matters where people are concerned, given the complex, global nature of modernday corporations. High performance is synonymous with high people performance. While tackling ineffective management and work processes and improving supervision and leadership may not be glamorous, they are certainly the fastest and lowest-cost routes to higher output and financial performance.

With this in mind, managers looking to build a high-productivity organization can follow this basic 10-point framework.

* Make productivity a strategic initiative. Achieving substantial productivity gains--greater than 20 percent--takes more than a series of piecemeal initiatives. What is required is a top-down, C-level-led strategic initiative. This must be well communicated and involve all...