There is no productivity “debate” in Australia, at least not one involving Australian businesses and
their media spokespeople the national newspapers. Instead, there’s an obsession with nasty unions and lazy workers, which like any good obsession involves an unwillingness to confront simple facts.
Today’s Australian Financial Review editorial discuses this week’s major speech on productivity from the senior Federal Treasury official, David Gruen, which, for the first time discussed the poor role management in this country seems to have in obtaining productivity gains. Gruen had based his comments on an international study had concluded that Australian managers were ranked well behind the likes of managers in the US, Germany, Canada and Sweden and that lifting the performance of Australian management to first rank levels would improve productivity in Australian manufacturing by around 8%.
The AFR took exception to his argument (and ignored the telling graph highlighted in yesterday’s Crikey which exposed the gap between improving labour productivity and weak multi-factor productivity). Gruen is “a fine economist”, The AFR condescendingly admitted, but had done us a disservice by providing “support for the alternative and distracting narrative from Prime Minister Julia Gillard that productivity is as much about management capability as industrial relations regulation”. Peter Reith this morning went further and claimed on Twitter that Gruen’s speech showed Treasury was losing its independence.
As Keynes might have said, “when the facts change, I criticise Treasury. What do you do, sir?”
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Australian managers rank below those from overseas, the editorial claimed, because of bad unions and lazy workers, and cited Toyota absenteeism as an example. Seriously. Yesterday the CFMEU cheekily engaged in some psychologising and suggested business was guilty of “projecting” their failings onto others. That appears almost literally true for The AFR‘s editorial.
The paper was so annoyed at Treasury’s “distraction” that it sent a journalist out to harvest quotes from the unbiased authorities like the Business Council’s Tony Shepherd, rejecting the analysis. “Industrial relations laws are limiting the capacity of companies to lift their productivity at the project and firm level by making it harder for them to allocate their labour in the most productive ways,” opined Shepherd.
Shepherd also popped up at The Australian, which followed up its carriage of Argus’s rant with a list of quotes from business figures backing them. You could tell Shepherd was uncertain of his ground, because he complained that “interpretations” of Argus’s and Gruen’s comments had focussed on “who’s to blame rather than on how we work to turn it around”. Funny, but Shepherd, doesn’t seem to mind playing the blame game when it’s him blaming unions and the government for business woes.
But not everyone was playing fair with The AFR. Its journalist found the author of the Australian part of the research cited by Gruen, Roy Green, dean of the UTS business school, who told the paper that while Australian managers did well on operational and performance management, they scored poorly in the area of people management. Green also noted, as Gruen had, that Australia suffered in rankings because it had a relatively high proportion of small and medium-sized firms, which are poorer managers than larger firms. It also reflected a generally low level of education among managers. “We are right at the bottom of the table in terms of management education,” said Green.
Of course, The AFR thinks that’s all the fault of unions and workers. That might be why it left those remarks to the final paragraphs of the story. Talk about burying the lede.
“[Green] said the report showed little correlation between industrial relations flexibility and good management. Australia was rated as having relatively low levels of ’employment rigidity: behind only the US and Canada and its management performance was average’.”
And in that paragraph, the whole thrust of the lead of the page one story, The AFR‘s editorial and The Australian’s coverage was wrecked. It’s not “the system” or regulation of rigidity or inflexibility that is to blame for the weak performance of Australian management. It’s the managers themselves, the way they are educated and trained and the level of self improvement required to continue managing that’s to blame.
The AFR‘s story concluded with this quote from Green: “The debate about management development is by far the most neglected aspect of what drives productivity”.
Exactly. The AFR, like The Australian, has been responsible for that neglect, much to their shame. As the major media outlets for business and national affairs respectively, this should be a key issue for these newspapers. Instead, the “debate” over productivity in their pages, and in places like Business Spectator where Robert Gottliebsen joined in yesterday, has been given over an incessant parade of tired business figures — let’s call them Dead White Businessmen — running the same unvarying combination of ideology and partisanship.
It’s shallow in analysis, light on facts, wholly self-serving and ultimately does nothing to help business lift productivity.