Thursday, 28th September 2023

How to be a higher performer

By Sam Amadi
07 October 2016   |   3:10 am
No matter how we look at it a recession is a problem of productivity. There are many causes of economic recession. But each of these causes relates to or results in a loss in productivity.
President Muhammadu Buhari Photo credit: ERIC PIERMONT/AFP/Getty Images)

President Muhammadu Buhari Photo credit: ERIC PIERMONT/AFP/Getty Images)

No matter how we look at it a recession is a problem of productivity. There are many causes of economic recession. But each of these causes relates to or results in a loss in productivity. This loss that constitutes a recession is usually measured in total productivity represented by Gross Domestic Product (GDP). Technically, a recession would occur if there is deficit in real GDP for a significant period of time usually after two quarters. This decline may happen even if there is actually no shrinkage in real production but because of rise in general price index. The usual cause of recession is inflation, which is general increase in prices of goods and services over a period of time. The pressure of inflation cuts down on productivity as people spend and invest less.

Counter Intuition on Recession
Recessions result from inflation, which leads to reduction in consumption, and reduction in consumption would then lead to reduction in investment in production. So, ultimately, economic recession is mainly a productivity problem. In a recession the value of the goods and services produced in an economy significantly dwindles. It is because recession is basically a production problem that the best response to a recession is to spend oneself out of it.

What should we do when we are in a recession? How should we react to a recession? The intuitive thing to do is to hold back, to do less and not more. But contrariwise, under the shadow of a recession we should do more and not less. We should invest more rather than less. Anyone who wants to reap after the recession should sow bountifully during the recession. The Bible wisely counsels that anyone who wants to sow should not consider the rain. If you consider the rains you would be discouraged to go out and till the land. And unless you till the land you may not have a harvest. This is the insight of Keynesian revolution in economics. The answer to a recession is to spend more. But, spending more, investing more does not mean continuing to be reckless and profligate. In fact, a recession provides an opportunity to review and re-strategise. And the watchword is to invest smartly by reducing cost centres and getting more value. Not spending less but spending smartly, that is cost-efficiency.

So in a recession the challenge is to be more productive. Because a recession results in drop in real GDP business and country leaders caught in its web need to quickly improve productivity. The credo is to improve performance. Human and physical capital productivity has to drastically improve. The challenge of improving productivity may require shifting focus of production. In the Nigerian case, we shift from focusing on oil and gas sector to agriculture and the service sectors. Even for economies that are already in the industrial stage, a response to recession will still be to improve productivity, to do more with less.

So, at this period Nigerian businesses and government institutions should focus attention on improving productivity, measured in terms of the ability to continually produce at a higher level. How do we improve the performance of the public service and every other business unit in the country? It is important to realise that the ultimate measure of a country’s productivity is based on the level of performance of its private and public institutions. In a sense therefore, the quality of a country’s management practice may be the real determinant of its ability to quickly get out of recession, especially the sort of recession that is aggravated by structural deficiencies like Nigeria’s.

One of the beneficial outcomes of this difficult times for Nigeria could be the development of sound business management theories and practices. Business management is a complement to good policymaking for economic development. We can see that in the history of the development of capitalism in the western world. We cannot talk of the triumph of market-oriented economies in the west unless we talk of three Austrians, Frederick Hayek, Joseph Schumpeter and Peter F. Drucker. These great men changed the discourse of economic development at the height of Keynesian revolution. The first two were political and economic philosophers and the third was a management theorist and thinker. They were all emigrants to the United States. Hayek poo-pooed the planned economy and argued that human progress and happiness depend on allowing individuals make their choices about production through the market. Schumpeter argued that economic growth will depend on how we embraced the entrepreneur whose profit motive will enable the creative destruction of capitalism.

Drucker excelled in teaching the world how to manage the business entity. He focused attention on the art of managing for higher productivity. This excellence manifested in the development of management as a science as well as an art. In his book, Managing for Turbulent Times, published at a time like this, Peter Drucker argues that “Making resources productive is the specific job of management, as distinct from the other jobs of the ‘manager as entrepreneurship administration. The history of management as a distinct social function began a hundred years ago with the discovery that resources can be managed for productivity. Resources can be made productive in the individual plant or enterprise, the individual store, the individual hospital, the individual office, the individual port, the individual research laboratory. They are made productive or deprived of productivity- by individual managers within their own individual sphere of responsibility”. This was a revolutionary insight in the period when a dominant Marxism had discounted the importance of labor productivity in sustaining economic growth. Or rather had predicted that labor productivity will decline leading to the collapse of capitalism.

The Secret of Being Better at Things:
Drucker, though not an academic economist swiped at the dominant nineteenth century labor theory of value which Karl Marx and other economists believe as gospel truth. In his view, “productivity is the source of all economic value” and not necessarily labor or capital. The theory of increasing productivity can be applied to all factors of production. It can be applied to manual worker as well as the 21st century knowledge worker. For business managers and economic policymakers, what should count most is how to ensure higher productivity. The theory of productivity as source of economic value should commit the manager to find ways to continue to improve its human and physical capital. The important question which such a well-meaning manager will ask is: is there a secret to make people better at what they do? Can I turn my people to maestros and geniuses at what they do?
Fortunately, there is such a secret. It is not an esoteric art. It is more of a science. It is the principle of ‘practice that makes perfect’. This is one of those instances in which a popular aphorism packs a lot of truth. We actually get better when we practice more. Malcom Gladwell, the bestselling futurist has argued that you need about 10,000 hours of practice to be excellent at something, whatever it is, whether golfing or juggling plates. But the secret of being better at doing things is not just about clocking hours of practice. It is something subtler. It is called deliberate practice.

The Science of Deliberate Practice
Yes, practice makes perfect. But to be perfect you need to practice in a particular manner.  Phil Rosenzweig identifies this form of practice as ‘deliberate practice’. That is, “Not just lot of time spent practicing but practice that conforms to a clear process of action, feedback, adjustment and action again”. Such practice creates expertise and not just experience. Today, we can ask whether the Nigerian civil service is benefiting from such practice. We see officers who are very experienced but totally incompetent. This incompetence has nothing to do with poor education. Many of these public officers have very good advanced degree even in the most important professions or disciplines. Yet they are basically incompetent at their tasks. And, this incompetence is the reason for much of the low productivity of the Nigerian economy.

The science of ‘deliberate practice’ is based on the trigonometry of action-feedback- action. We get better at things if we practice in a manner that ensures us identify what we are not doing well and practice well to master a technique that enables us to overcome that setback or limitation. As Stephen J. Dubror and Stephen D. Levitt put it in their New York Times article of May 7, 2006 titled, “A Star is Born”, “Deliberate practice entails more than simply repeating a task- playing a C-minor scale 100 times, for instance, or hitting tennis serves till your shoulder pops out of its socket. Rather, it involves setting specific goals, obtaining immediate feedback and concentrating as much on technique as on outcomes”. The duo wrote the article to review the work of the psychologist, Ander Ericsson who has researched and written about ‘deliberate practice’ as the secret code of high performance.

Before Ericsson, there was Benjamin Bloom who studied the childhood of 120 elite performers in different fields and came to the conclusion that these high performers were successful because of “intensive practice, guided by committed teachers and supported by family members”. Based on this experiment with geniuses from sectors as diverse as music and mathematics, he concluded that practice is more important than talent. So, management, which is what creates meaningful practice, is the secret of high performance.

The psychologist, Anders Ericsson, conducted experiment with young people who he asked to count numbers. As they practiced more and more they are able to count more numbers. After 20 hours of practice their rate of performance astronomically increased. He has documented the wide ranging experiment on the science of performance and the astounding results in the Cambridge Handbook of Expertise and Expert Performance. Ericsson’s major claim is to debunk the assumption that we have inherent limits we were born with. Ericsson believes that “there is surprisingly little hard evidence that anyone could attain any kind of exceptional performance without spending a lot of time perfecting it”. So, we can all become maestros only if we can engage in the sort of practice that can ensure we climb to the summit of the technique required to deliver excellent performance.

Performance Machine and Recovery from Recession
The Nigerian minister of finance has announced that the country has started to gradually recover from recession and very soon, the country will recover fully. This is good news. But, if Nigeria recovers this quick without transforming any of its business (economic) fundamentals it is a recovery that does not protect it against next time. The best recovery should be led by improvement in productivity. Well, as Nigeria is an extractive economy, perhaps the only viable option for enhanced productivity is increase in oil production. So, as government negotiates peace with Niger Delta militants hope rises that oil production will increase resulting in oil-based GDP growth. Again, with more investment in infrastructure with borrowed funds Nigeria can trigger increased in consumption, which will further expand production.

But the best way to ensure recovery and strengthen the economy is to enhance its productive capacity by diversifying away from the cyclical risks of oil economy. But diversification simply ensure that we build many revenue streams. But ultimately, we need to produce more and more goods not just open new business units. As the government seeks to encourage new businesses to start up it has responsibility to indirectly enhance the performance of these business units. As Peter Drucker wisely observed many decades ago (and it remains true today) the overall productivity of the economy depends on whether the managements in the individual store, individual factory or individual research laboratory, are deliberately enhancing productivity in their units.
The science of ‘deliberate practice’ has now provided a framework to improve productivity in these individual business units. We can now get to make every worker, every public officer highly competent and proficient; and watch out for an economy that cannot be knocked down by any change in global prices or contraction in money supply.

We can make everybody a great performer by building an intelligent management that more efficiently manages the productivity of the worker. Thankfully, we have a proven science to aid us.

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