For the last decade the UK industry has consistently performed worse than most of its G7 peers in terms of productivity – something that’s become an enduring concern among that nation’s business leaders, policy makers and economists.
One recent paper, the LSE ‘s Cracking the Productivity Code, published in Autumn last year, blamed the country’s seemingly sluggish productivity rates on a lack of investment in capital and skills as well as a loss of trade because of Brexit.
The latest study to emerge on this worrying trend involved an alliance between Be the Business, a UK productivity charity set up in 2017, and digital communication platform vendor Slack.
The fruits of this partnership included a survey on growth that quizzed around 500 UK business leaders in organisations employing between one and 250 employees from a range of sectors.
Inflation and the cost of living were highlighted by 55% of respondents as the biggest barriers to growth, followed by competitors (31%), and the ongoing impact of Brexit (26%).
Poor management was cited as the top internal barrier, highlighted by 45% of leaders, followed by poor communication and lack of collaboration (38%). A lack of motivation and employee burnout were other reasons given.
Solutions to such growth inhibitors, SMB leaders suggested, included tax cuts (almost half of all respondents opted for this); training (just over 40%) and a better work/life balance.
A quarter of leaders also believed that growth lay in deploying automation and AI, with many stating that they planned on investing time and/or money in AI to stimulate growth in the year ahead.
To launch this data and an e-book on case studies highlighting innovative small firms that have been smashing it in the productivity stakes, Slack and Be the Business ran a round table at a central London location last mont month.
Dr Hanh Pham an assistant professor at Leeds University Business School kicked things off by addressing the very real concerns over competition and high taxes.
Pham said that the costs of setting up a business in the UK were prohibitively high, often favouring large multinational competitors over SMBs. In this kind of environment, she added, firms with innovative products that added value could find lucrative, niche markets.
One small business around the table, hoping to achieve just this, was the tech platform Homemove, co-founded by Louis O’Connell-Bristow in 2022. Conceived as an idea during the pandemic the platform aims to take the stress out of moving homes. Norfolk-based O’Connell-Bristow and his Derby based co-founder decided to open two satellite offices near their respective locations, using tech to keep everyone on track, engaged and in the loop.
The firm adopted Slack as its core comms channel and created an AI-powered assistant to coach the team with Slack messages. The idea, according to the entrepreneur, was to celebrate and encourage success without sounding like an overbearing manager.
The assistant highlights sales and follows it up with a running total for the day with a reminder of overall targets.
“It then says something like ‘come on guys, let’s get to £7K today! It’s also integrated with Giphy too, so it comes up with a random GIF that corresponds with the message,” says O’Connell-Bristow. “By adding humour its building, a culture that drives the salespeople forward – whereas using a CRM may be more dry,” he adds.
According to the company’s growth figures, this approach appears to be working. Homemove has grown 60 – 120% month-on-month and has already launched a second product, Homer, an AI-powered valuation too.
However, O’Connell-Bristow- who has launched other businesses – acknowledges that it’s easy to become complacent when your firm is making money – why risk introducing a new piece of technology that could make things more complicated?
“There’s a resistance there – even to replacing an Excel spreadsheet with some SaaS software, say, it’s a whole process; it’s a risk, it could make things more complicated. 80% of the time it will probably improve the situation, but you need to be dedicated to onboarding your staff to switch over. And sometimes there’s a lack of knowledge and belief,” he said.
Vanessa O’Mahony, head of small and growth businesses, EMEA at Slack agreed that there’s sometimes a reluctance among firms to take on the heavy lifting when it comes to new technologies.
“It requires the right mindset, but the product needs to be intuitive. Adoption needs to be straightforward, and leaders need to ensure that it is a cultural shift in how they work,” she added.
David Halpern, a psychologist and founding director of Behavioural Insight Team – a social purpose outfit that applies behavioural insights to inform policy and improve public services acknowledged that slow tech adoption rate is one of the long-term factors that is killing UK productivity.
“Hassle, unfamiliarity and cost are big barriers,” he says. “There’s also a legitimate anxiety around whether it will work or not. There’s a very big role to be played here to help businesses make those judgements more wisely,” he said.
Sometimes businesses need external advice to help them break closed mind set patterns of behaviour, adds Halpern, a former civil servant who was chief analyst in the Prime Minister’s Strategy Unit during the Tony Blair years.
As a case-in-point he cited a study (not from the UK) which looked at ambulance drivers’ reluctance to use AI to find the quickest routes to take.
“They’d been doing this for years and didn’t feel they needed an algorithm to tell them how to do their jobs. So they were shadowed for two weeks and after that time they were set a challenge.
“If they were the first to reach a particular destination during quieter times they got free doughnuts and coffee. You soon find out what the benefits of the tech are when other people are getting the free coffee.”
The lesson, says Halpern, is that you are going to have to twin adoption with whatever motivates people.
For Kerry Watkins, founder and managing director of marketing and comms firm Social for Good, the motivation was running a business that offers a four-day week.
“If I’m paying my team 100% of their salaries for 80% of the hours, I don’t want them spending 5% of their week sitting in email,” she said.
“We also don’t want to be over-servicing clients because that will reduce the profitability of the agency. So it’s important to stick to a set of processes, interactions and learnings.
Watkins’ hybrid team comprises of eight employees working flexible hours with two staff members currently working from overseas. “My only stipulation is that we have a rota on the social media management team so that someone covers Fridays, otherwise it would go pretty quiet.”
The small business leader – who is also taking part in a University of Sussex study on the four day week – worked with a consultancy that specialised in growing digital agencies to get advice on tech procurement, although she knew that she required a good comms software to maximise productivity.
According to Watkins, the team uses Slack instead of email for all internal communications “So that you don’t have notifications popping up everywhere. With this platform we can stay in touch but turn notifications off when we don’t want to be distracted.”
Year-on-year, the firm’s growth has been strong since Watkins founded the company in 2017. In 2020-21 it was 51%; 71% in 2021-22 and a further 37% in 2022-23.
But this isn’t just down to tech, she emphasised that vision was key to growth too.
“The vision needs to be clear, we had a 5-year growth plan, we know where we want to get to and the charities that we want to support and the size we want to be; Once you have this, then everything else falls into place,” she says.
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