Getting the formula right for productivity and growth

Just five per cent of Australian organisations report achieving the kind of smart, sustainable growth the nation needs to succeed beyond the Mining Boom, according to a new national survey of business, enterprise and government organisations.

Towards a Clever Australia – a Telstra report based on a series of in-depth interviews with more than 1,000 decision makers found that:
 

• 80 per cent of private and public organisations were Productivity Followers – because they either did not measure or had not reported achieving substantial productivity improvements over the past year,
   
• And 20 per cent of private and public organisations were Productivity Leaders – because they had measured and reported achieving substantial productivity improvement over the past year.

Analysis of the report suggests that productivity is not keeping up with the challenges the Australian economy faces – such as the uncertainty of the global economy, climate change and increased global competition.
Without a rise in productivity in non-resource sectors of the economy, a 2012 McKinsey report warned, Australia’s GDP growth could “flat-line” at 0.5 per cent by 2017.

Telstra has now been measuring productivity for five years. Chief Executive Officer David Thodey said that, Towards a Clever Australia focuses on the organisations that qualified as Productivity Leaders

The survey found that a quarter of Productivity Leaders – or five per cent of those surveyed overall – had reported not just achieving substantial productivity improvements, but wider organisational benefits as well.

The report categorises the strongest performers as Growth Champions and seeks to understand why they are successful.

“As an organisation, Telstra is committed to being a leader in the debate on productivity, helping our customers identify ways to improve their own businesses and create clever growth,” Mr Thodey said.

“This analysis is just one part of the formula that could assist in the transformation to a more dynamic economy.

“What I know from running this company and from listening to our customers is that growth goes hand in glove with productivity. It’s the outcome which justifies productivity investments and is the goal we are all seeking to achieve.

“The Growth Champions finding within the report is significant because 86 per cent of private and public organisations said they were focused on growth.

“If growth is the focus of so many Australian organisations, we need to closely look at the five per cent who report achieving sustainable organisational growth.”

The survey found that Growth Champions shared three common traits. A strong focus on:

1. Putting the customer first,
2. Workforce collaboration and,
3. Investment in data analytics, network speed, coverage and performance.

The report found that Growth Champions can be found in all industries, with the best performing coming from the retail sector (18 per cent), health (13 per cent), government (12 per cent) followed by banking and finance (10 per cent).

Group Managing Director of Telstra Enterprise and Government Paul Geason said the results should create optimism across a broad range of industries.

“What this report points out is that smart, sustainable growth is not limited to those organisations directly benefiting from today’s Mining Boom,” Mr Geason said.

“Productivity has always been a natural focus for Telstra. Improved use of information and communications technology to help people better connect and innovate is the foundation of our business – it’s what we deliver to customers but it’s also what we pursue internally.

“We’ve recently invested in tablets for our sales force which allows access to business applications while on the road. Video conferencing is another example; connecting an enterprise as large as Telstra with the technology that reduces the need for travel has a significant impact.

“And we do this because we understand that productivity investments are the only way we’re going to create growth that’s sustainable and effective.”

The Towards a Clever Australia research is available at www.telstra.com/cleverausreport 
 

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Notes to Editors
For the private sector, growth was defined as productivity improvement plus uplifts in non-financial capabilities and financial performance (revenue). For the largely non-profit making public sector, growth was defined as an increase in capabilities and efficiencies in delivering services, meeting organisational objectives and collaborating with stakeholders. Combining these drivers of growth helps eliminate short-term market factors and individual business cycles to establish a formula for long term, sustainable success, in a way that is broadly comparable between private and public sector.

About the Report
Towards a Clever Australia is the fifth annual Telstra survey into productivity, conducted by an independent research company - AMR. This year, the focus was extended beyond productivity to explore the issue of growth, while business respondents have been polled for the first time. Interviews were conducted with 1,060 Australian directors, senior executives and managers in business (20-199 employees), enterprise (200 plus employees) and government organisations between September and October 2012.

About Telstra
Telstra provides network solutions and services to more than 200 of the world’s top 500 companies across 240 countries and territories, and to all levels of government in Australia. Through its world-class Telstra Next IP® network and Next G® network, Telstra connects customers to an innovative portfolio of secure and reliable solutions and services that maximise their business performance. Together with its skilled team, including one of Australia’s largest and most qualified field and technical workforces, Telstra is committed to improving the way people and organisations work.