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Post-Autumn Statement, we need to drive up productivity

Making Britain more successful means driving productivity through better people practices

George Osborne made the National Living Wage a surprising centrepiece to one of his last statements and now Philip Hammond has picked up where the former chancellor left off by announcing a 30p rise (bringing the NLW to £7.50) from next April.

It’s a hot topic. John McDonnell made a £10 an hour National Living Wage a focal point of his speech at the Labour party conference. But it raises the question of how the UK could make that affordable.

A simple formula for a successful business is minimising your costs and maximising your profits, but the biggest cost in most businesses is people. As we have seen with Philip Green and Mike Ashley, minimising wages and maximising profits isn't always a sustainable answer. It may encourage a short burst of performance but longer term it doesn't deliver.

So how can we deliver a higher National Living Wage, sustainable businesses and a sustainable economy? Can we make wages affordable for employers and high enough to give a decent living standard? A large part of the answer lies with productivity.

The UK isn't fundamentally broken. It can have a £10 National Living Wage and be competitive in the global marketplace if it becomes more productive. Think of the UK as a car with a big engine, but that engine is out of tune. Get it firing on all cylinders and running in time and it delivers up to 30% more economic performance.

However, productivity doesn't always get the attention that it deserves. Time and money are spent on the quantity and even the quality of human resources but often not on how effectively these are deployed. There is a lot of chatter about employee engagement but not on how productive each person has been and could be.

Technology will seldom answer that question, but is likely to play a part. The new systems and processes that have been ignored when they are seen as bringers of redundancy suddenly become fashionable, and suddenly business cases come forward to change the way of working and invest in new technology. They become enablers to productivity, winning more in the market and growing the business.

There is no 'magic bullet'. The multi-million pound technology programme is unlikely to deliver in isolation. It is a combination of factors that delivers improved performance. It is all about the people; the mindset of the people and the spirit of the people, their belief in a vision that can take them to a better place.

Once an attendance culture has become established and presenteeism is rife it takes a determined effort to oust this, refocus the organisation on results, and remind people that work is an activity not a place. A culture that values praise, rewards, a constructive style, and is flexible rather than finding fault will enable the improvement in results.

A blend of flexible working, unlimited holidays, people managed by praise and reward and not fault-finding, and other ‘people productivity’ tools can lead to self-managed productivity gains. This deepens the psychological contract that people yearn for with their organisation(s) and can deliver some real 'wellbeing' at work. This will result in better sleep, better diet, less substance abuse, and a much more motivated workforce.

It's now time to liberate people from the constructs of 20th century employment, to win together by driving up organisational productivity and employee wellbeing together and to release the untapped potential that lies latent within the UK.

Cary Cooper is 50th anniversary professor of organizational psychology and health at Manchester Business School and president of the CIPD and the British Academy of Management. Jeremy Stafford is an experienced CEO, having run two listed companies in the UK and held senior leadership positions in two other FTSE 100 companies