Against a bewildering backdrop of competing issues, productivity improvement can no longer remain a siloed service if firms want to remain competitive. A crafted, holistic approach which takes stakeholders into account will become increasingly necessary.
Despite the pandemic in the rear-view mirror and a potential global recession up ahead, consulting firms appear to remain optimistic about revenue growth, according to our latest research. Clients seem keen to capitalise upon the post-COVID opportunity to pursue change and development initiatives, yet this encouraging headline belies a more complex future. In the face of broader macro-economic uncertainty, an area that we believe to be gaining traction is productivity improvement.
Although much cost-cutting work was completed during the pandemic—such that today clients tell us they are relatively confident their finances are in order—they also recognise that to maintain that foundation and achieve their growth ambitions, they need to boost productivity across their organisations, most often through accelerating their digital capabilities.
The drive for productivity needs to be viewed alongside another pressing post-pandemic problem, namely that staff resources are at a premium. Whilst the leisure sector has received the most media attention on this point, we hear from clients across all industries that recruitment and retention are now top of their agenda.
The challenge, then, is figuring out how best to proceed; how to press the button on modernisation and digital solutions whilst retaining key staff, keeping them motivated and focused.
A heap of competing interests
An example, highlighting how hard this balancing act is to achieve: the transport industry. Here, productivity gains benefit both the industry itself and the communities it supports. And yet, it has run into trouble.
Workers are proclaiming not only that jobs are at risk as a direct result of productivity gains, but, worse, that these reforms are being implemented by boards who, only months before, were hailing frontline staff as key-workers and heroes. At the board level, consumer confidence is still patchy, supply chains are unstable, and ongoing staff shortages are impacting services. Throw in growing expectations around sustainability and ESG and you have a bewildering heap of competing issues that these companies need to contend with.
Productivity gains, then, need to be managed against these broad, messy contexts, taking into account such wide-varied topics as stakeholder management, employee relations, talent programmes, and customer feedback.
A holistic approach
Whilst consulting firms have solutions and propositions at hand to support clients with productivity, our research indicates that clients are under pressure to do more of that work in-house. This means that, in order to pique the interest of clients and shift them towards using external help, firms need approaches that address these multi-dimensional issues cohesively.
This is no small challenge. For example, do consultancies working on omni-digital supply chains services now need to factor in internal communications, change management, and focus group research? And should firms addressing agile manufacturing problems consider message testing, investor relations response, and HR procedures?
The list is endless, and the extent to which these “softer” services are considered integral parts of a firm’s methodology, rather than peripheral and optional add-ons, needs to be defined. Because in today’s febrile economic atmosphere and deepening war on talent, consulting firms need a multi-disciplinary solution to clients’ problems that combines deep technical understanding with first-class stakeholder management.
Taken all together this takes on the appearance of a more crafted approach that not only outlines pragmatic opportunities for productivity gains, but also brings stakeholders on board and keeps them there. Firms need measured and thought-through answers when critics come calling, and need to communicate the benefits of their work, time and again, across the lifecycle of a project.
Too often, consulting firms appear to rely on known ideas and approaches to productivity improvement. But right now, simply pivoting to the standard toolkit of solutions will not be enough: this is a new world, and consulting firms need a new set of solutions.