Boosting productivity: Getting Nova Scotia back in the game

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A Deloitte study released in 2011 shows there is a substantial, growing productivity gap between our province and others. In fact, it ranks near the bottom of the scale in overall level of labour productivity, only slightly better than Prince Edward Island.

Blaire Martell, owner, Lobsters ‘R’ Us Seafood

(Originally published in the Feb. 2014 issue of the Nova Scotia Business Journal)

Lobsters ‘R’ Us has always dreamt big. When the company set its sights on moving its lobster and snow crab into the more profitable markets of China and Europe, it knew it had to invest in new technologies to become a true global contender.

To realize its plan, the Cape Breton company built an energy-efficient, three-room, $1.5-million live seafood storage facility to hold up to 450,000 pounds of lobster and snow crab for as long as 150 days. Its key features are the electrically powered water pumping and cooling system, and a sophisticated biofiltering system for ammonia that is computer monitored. Efficiency Nova Scotia incentives brought the payback period for the project down from 2.8 years to 1.4 years. Additionally, Lobsters ‘R’ Us received rebates from Efficiency Nova Scotia on the purchase of energy-efficient equipment.

Keeping costs down has been critical, says Blaire Martell, owner of the Lower L’Ardoise business.

“If you’re efficient you’ll make money,” says Martell. “I think you’ll see more investment in the industry because if you’re not on top of your game right now, you’ll lose your place. It’s very, very competitive.”

Lobsters ‘R’ Us has embraced the concept of productivity. It is not about working longer or harder; it’s about working smarter. 

According to The Conference Board of Canada, it’s about finding more efficient and effective ways to produce goods and services so that more can be produced with the same amount of effort. It’s also about producing higher-value-added products and services that are worth more in the marketplace.

The importance of productivity cannot be ignored. It is one of the most vital drivers of prosperity and key to maintaining our standard of living.

Unfortunately for Nova Scotia, a Deloitte study released in 2011 shows there is a substantial, growing productivity gap between our province and others. In fact, it ranks near the bottom of the scale in overall level of labour productivity, only slightly better than Prince Edward Island. Even Canada is struggling when compared to other countries like the United States. Canada’s output per worker was 78 per cent that of the U.S. in 2011 and Canada’s 0.7 per cent annualized labour productivity growth (2001–09) puts it in the bottom quartile of the Organisation for Economic Co-operation and Development (OECD).

Why are we struggling with productivity?

Eldon MacKeigan, senior partner at Sandler Training, believes companies need to invest more in their most valuable resource — their people — by giving them the training, equipment, technology and guidance they need to thrive in their jobs. He says you can’t simply throw your employees into the deep end and expect them to swim.

“You have to do the things that make them more productive if you want them to be productive,” says MacKeigan.

Bluewave Energy, the largest national independent operator of retail and commercial/industrial fuels with over 100 representatives across the country, is a big believer in investing in its people.

“Employees are your reason for success,” says Greg Sweet, Eastern vice-president of sales for Bluewave Energy. “One of the most important things you can do is recruit employees that are a good fit — they need to have an entrepreneurial spirit, the education and the drive to succeed.”

But it’s about more than finding the right employee, says Sweet. It involves taking these employees and building a strong team environment around them and supporting them with compensation plans and on-going training.

MacKeigan stresses that owners and CEOs must seek out best practices in order to nurture their people and take them to another level. 

“Often I see a real disconnect between the support and accountability,” he says.

Deloitte, which recently published “The Future of Productivity: A Wake-Up Call for Canadian Companies”, acknowledges that many businesses in Nova Scotia and the rest of Canada are investing materially less in their people, research and development, and machinery and equipment (including information and communication technology) — all vital to improving productivity. But according to new studies, it says the reason is not because of a lack of will, but rather overconfidence. A significant number of businesses mistakenly believe they are making competitive levels of investment when they are not.

The Deloitte report says targeting these overconfident firms is vital to lessening the productivity lag. These firms account for the majority of underinvesting companies, which translates to more than one-third of all Canadian businesses.

So how can these companies be spurred into action and these perceptions turned around?

“The answer is surprisingly straightforward: ensure these companies have access to timely, accurate information about their competitive environment,” says Shannon MacDonald, partner and Deloitte’s Chief Inclusion Officer. “To make smart decisions, grow and thrive, companies have to be able to understand how their investments in new technology and innovation stack up against those made by comparable firms.”

Companies can find out what the competition is doing by gathering competitive intelligence and participating in benchmarking studies. Statistics Canada collects a considerable amount of information on Canadian business practices, including investment, innovation, profitability, employment and trade. In 2012, the agency took a major step toward making this information more accessible to the Canadian public by introducing free standard downloads from their CANSIM service.

To further assist companies in creating an accurate picture of their investment competitiveness, Deloitte has developed a diagnostic tool that draws upon its survey data to help companies understand how their investment levels compare to their peers. It can be found at: www.investmentinsight.ca.

“It requires a certain amount of courage for a firm to look honestly in the mirror, but to define, execute and maintain a winning strategy, a ‘no pain, no gain’ philosophy must prevail,” says MacDonald.

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Want to increase the productivity of your business?

Check out the Nova Scotia Productivity Investment Program at: www.novascotia.ca/econ/pip. This program provides funding assistance for employee skills development and technology purchases.  

Organizations: Nova Scotia Business Journal, Conference Board of Canada, Organisation for Economic Co-operation and Development OECD Sandler Training Bluewave Canadian Companies Statistics Canada

Geographic location: Nova Scotia, Canada, China Europe Cape Breton United States Prince Edward Island

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