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  1. Spotlight on Policy
20 September 2019updated 09 Sep 2021 12:55pm

Why all businesses should be people businesses

The most successful companies invest in strong leadership and develop better interpersonal relationships.

By Nigel Whitehead

As the nation braces itself for further political twists and turns this autumn, we can all but hope that some certainty and stability will be forthcoming because inarguably some important issues are not receiving the attention they deserve. One of these issues is productivity and the efficiency and effectiveness of our businesses and how they operate. As we look to safeguard our country’s economic future, maintaining our competitive instinct is vital. Wherever people stand in the debate about the future economic relationships the UK should have with the EU and the wider world, we can all agree on one thing: that a productive, technologically driven and skilled economy is a pre requisite for any future success.

The UK has a strong core of larger companies with world-class levels of productivity, combined with a rich and diverse network of other, often smaller, companies, where I believe the greatest potential gains in productivity stand to be made. Within regions, within sectors and even within a single supply chain, it is possible to see a wide range of productivity levels – from truly world-class examples to those needing improvement.

At BAE Systems the positive impact of our engineering and manufacturing operations are felt throughout the whole UK and we are present in more than 50 locations. The productivity of our company’s workforce is higher than the national average – a picture which is echoed across the engineering sector. Indeed, Engineering UK’s report The State of Engineering 2018 found that the sector plays a key role in driving economic growth and productivity, generating 21.4 per cent (£1.2tn) of the country’s overall £5.7tn turnover last year.

There is certainly more, however, that BAE Systems should and can be doing to enhance our productivity. We know that our own ability to drive future productivity and efficiency gains within our business is dependent on the strong performance of the 8,900 companies in our supply chain.

As a result, several years ago a group of business leaders from companies including the John Lewis Partnership, Siemens, Rolls-Royce and BAE Systems formed the Productivity Leadership Group. The group studied highly productive workplaces and found distinct and common themes. Early research and conversations with organisations across the country revealed that poor management and lacklustre leadership are usually linked with poor productivity. The leaders in the most productive organisations had demonstrated ways to engage their workforces and harness employee ideas and suggestions for change. The group concluded that the techniques used to do this could be adopted by other leaders too. This formed the basis of Productivity Through People and Be the Business initiatives – programmes that instruct and inform a proactive and people-centric approach to management.

A focus has been to work with the small to medium-sized enterprises that make up 99.9 per cent of all private sector businesses and 60 per cent of all private sector employment, but often find it too risky and costly to invest in training and productivity programmes.

An inaugural programme designed with Lancaster University was launched in January 2017 and the scheme has now spread to Scotland, the South West, and the Midlands, where it is delivered by University of Strathclyde, the University of Bath and Aston University respectively. To date, delegates from 129 businesses with a combined turnover of £5bn have now participated in the programme. Plans are in place to extend the programme to the South East, Wales and Northern Ireland.

I believe that these sorts of collaborative approaches have the potential to leverage the knowledge and resources that the UK undoubtedly has and bring considerable benefits to British businesses. When industrialists, employees, trade unions, academia and government work in unison, the results can be hugely positive. I encourage the UK’s SMEs to take advantage of funded programmes such as Productivity through People. Equally, I encourage large companies to step up to the plate and collaborate. In uncertain times, the UK’s ability to pull together should be viewed as a national strength.

Nigel Whitehead is chief technology officer at BAE Systems plc.

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