Addressing Canada's Productivity Challenge

April 25, 2022
Addressing Canada's productivity challenge

Canada’s economy lags behind many other nations in terms of productivity. It is projected that Canada’s productivity growth rate will be slower than many of its peers over the next thirty years. Addressing Canada’s productivity is a dynamically complex challenge, impacted by international, national and organizational factors. While governments hammer out trade agreements, tax and business policy regimes, there is much that individual organizations can and must do to address productivity improvement. 

The predominant argument put forward to address productivity improvement is that of investment in technology. While investment in technology is necessary, it is not sufficient in addressing Canada’s productivity challenge. Many SME’s do not have the resources or skills to invest in technology, while other firms invest in technology without truly understanding its impact, often resulting in unintended negative consequences. Organizations must first place their efforts and resources on improving system effectiveness in delivering ever increasing customer value. Only then should investment in technology occur. Effectiveness first, then selective investment in technology where appropriate, in a never-ending process of innovation, knowledge creation, continuous improvement and value creation. Doing so generates much needed financial and human capital and improves operational and financial performance, allowing the organization to leap ahead of the competition and establish sustainable competitiveness in the process. To achieve this, a transformation in thinking and behaviour is required.

This paper will identify two key areas requiring the immediate attention of executives and senior management across all organizations. The first is the development of mission critical integrative supply chain system thinking competencies in their organizations. Integrative supply chain system thinking marries training in effective supply chain management with system thinking, then applies these in addressing the productivity challenge. In the process key competencies are developed, necessary for improving an organization’s effectiveness in delivering ever increasing customer value and improved productivity in today’s (and tomorrow’s) dynamically complex global economy. Of note, in 2016 the World Economic Forum (WEF) identified the top ten skills required by organizations needed to thrive in the fourth industrial revolution.  Those top ten skills include;

  • Complex problem solving
  • Critical thinking
  • Creativity
  • People management
  • Coordinating with others
  • Emotional intelligence
  • Judgement and decision making
  • Service orientation
  • Negotiation
  • Cognitive flexibility

 Integrative supply chain system thinking competencies, when developed as outlined in this paper, and in concert with effective leadership, embodies all of these skills.

The second key area requiring immediate attention is that of organizational culture. An organization’s culture must be one that encourages collaboration, risk taking, is focused on customer value creation, adopts continuous improvement as foundational to it’s strategic approach, and regards all employees and key supply chain partners as critical to the creation of innovative new knowledge. Developing such a culture requires organizational leadership that values and adopts such principles and approaches in the day to day managing of the firm. Unfortunately, such leadership is at odds with traditional cost-focused management culture found in many organizations today yet is absolutely essential to achieving sustainable competitiveness in today’s (and tomorrow’s) dynamically complex global economy.

World leading productivity, and with that true sustainable competitiveness in the global economy, comes through the effective application and leveraging of all of an organization’s resources, not just technology. This is true for organizations in all sectors of the economy. It takes skilled supply chain specialists trained in system thinking to effectively leverage all resources including technology; integrating, coordinating, and optimizing them to achieve world leading productivity and system performance. It also takes a leadership culture that fosters an environment in which knowledge creation, innovation, and continuous improvement toward true sustainable competitiveness can flourish.

This paper reviews the work of a number of key thought leaders in defining integrative supply chain system thinking. Additionally, a case involving a manufacturing firm is outlined throughout the paper in an effort to better understand the importance of integrative supply chain system thinking to improving organizational effectiveness.

Improving productivity in Canada is an urgent matter that must be addressed by governments, business, and education systems alike. Unless taken seriously and accompanied by specific action, Canada’s productivity, and with it our competitiveness and standard of living will continue to fall behind. This paper is a call to action to all organizational leaders to address the productivity challenge. It is also a review of what needs to be in place for improved productivity and sustainable competitiveness to be achieved. If you are an organizational leader charged with the responsibility to improve your organization’s/supply chain’s performance then I encourage you to continue reading.

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