Hard questions on soft skills

It's a grim picture out there in job world as ANZ Bank follows Westpac in announcing job losses – it will shed 1,000 jobs by the end of the year – hardly surprising given the backdrop of global economic stress and a more cautionary approach to debt from business and households.

Should all organisations downsize themselves in sympathy? Is it wise to make investments in this environment? What is the smart thing to do?

Every business wants to increase its margins by growing revenue, cutting costs or reducing the cost of capital. And we are awash with buzzwords like innovation and productivity that have all the reverence of a Holy Grail.

On a recent fact-finding mission I met with a range of representatives from the government, non-profit and private sectors and found that the meaning of innovation depends on whom you are talking to. For some it is the commercialisation of science and technology; for others it may be about the complexities of social media or as simple as figuring out a better way to lift a box.

Occasionally, and much too rarely, do we include organisational performance in the same breath as innovation. Most of our policy efforts are pointed in different directions. The 2010 House of Representatives inquiry into productivity growth focused on health and education measures when discussing human capital.

And yet some of the biggest payoffs on offer reside in improved organisational performance. The Department of Education, Employment and Workplace Relations has been edging in the right direction, funding a recent study on high-performing workplaces.

There is a pot of productivity 'gold' waiting at the end of the rainbow. Who can honestly say that they haven't worked for a dysfunctional firm, a dodgy company or a ticking time bomb at some stage in their life?

There are massive internal costs waiting to be cleaned up. A workplace with mediocre levels of staff engagement will have low job satisfaction rates, excessive turnover, unwanted recruitment costs and be constantly dealing with a rash of temporary placements to fill the potholes left behind.

A survey by the Gallup organisation in the US found that about 70 per cent of employees were categorised as disengaged, and the cost associated with that estimated to be equivalent to 35 per cent of payroll. If there is a productivity God, then he or she would be poised and ready to pounce on such largesse.

An engaged workforce is also more likely to be on the lookout for new opportunities and ways of doing things – as per the example of Accor that I wrote about recently (Discovering productivity buried treasure, January 30). We can create innovation and productivity feedback loops!

So, how do we tackle the problem? Do we lift everyone's spirits by holding a casual dress day and donating to a charity? That's not necessarily a bad thing to do, but it is a sideshow to the main game.

One avenue we can follow involves building mutual value between businesses and community organisations through partnerships. If crafted well, business can provide developmental activities for its employees, leading to more job satisfaction and financial gains from productivity outcomes.

I regularly talk to businesses that are struggling to figure out how to do it. I see non-profit organisations struggling to tap into the potential resources that are on offer. These barriers can be overcome with some decent analysis, expertise and the development of strategic options.

It takes an investment in thought processes and guidance rather than a massive capital outlay. As the harsh realities of a flat economy bite, investing in soft skills is the smart thing to do.

Phil Preston is an independent practitioner who helps organisations find innovative solutions to performance issues. He can be contacted on phil@philpreston.co