With the sharp deterioration in the economy in recent months, organisations have a new appetite for smarter practices that drive efficiency. Productivity, once seen as a belt-and-braces-type management concept, is now back in vogue, writes Frank Dillon

According to the Irish Management Institute (IMI), there has been a steady increase in numbers visiting the National Productivity Centre (NPC), based at their HQ in Sandyford. The centre, established by the IMI in partnership with Microsoft, showcases best management practices in a multimedia presentation suite and provides a purpose-built environment for management teams to have off-site meetings to review their organisational strategies.

The NPC provides visiting executives with interactive experience drawing on the expertise of leading economic commentators and management practitioners. The central presentation features sector-specific case studies on how companies around the world are addressing productivity.

The inspiration for the centre came from Microsoft-sponsored research undertaken by the late Paul Tansey in 2005, Productivity - Ireland's Economic Imperative, that highlighted poor overall productivity levels in Ireland in the indigenous company sector. Multinational companies were found to have much higher productivity levels, mirroring international trends.

The survey results were presented at the IMI conference that year and the two organisations responded by establishing the centre, which opened in 2007. Representing an investment of about €2 million, the centre was supported by Dell, Eircom, Fujitsu Siemens and HP.

Management from Ireland's largest public and private sector organisations have been invited to view a presentation facilitated by IMI chief executive Tom McCarthy or Microsoft country manager Paul Rellis.

McCarthy cites a study of 4,000 medium-sized global organisations from consultants McKinsey which shows a 1 per cent improvement in management is associated with the same increase in output as a 25 per cent increase in the labour force or a 65 per cent increase in invested capital.

The spread of management performance between firms, even those of similar size operating in the same industry sectors in the same regions, is very broad, suggesting management excellence is a matter of internal policy and not just the business environment, the McKinsey research shows.

The significance of this, McCarthy says, is it suggests organisations have access to dramatic improvements in performance simply by adopting better management practices. "This is a very timely message for organisations that are feeling challenged in the current environment," he says.

Organisations should focus on three things, he says. The first is improving their management capabilities through training and development and the adoption of best practice. The second is improving their competencies in information and communication technologies - studies have shown that 40 per cent of productivity increases in the EU have come from this area. The third is to focus on innovation to take lead positions within markets.

Rellis notes there is a "mindset shift" and that firms are looking for answers that go beyond downsizing. "Organisations will need to make bolder moves and driving productivity growth is vital. Innovation is a key part of this and, as an export-led country, we should be trying to position ourselves ahead of the pack."

The NPC, he says, is designed to contribute to this process by highlighting best management practice and providing some very practical suggestions for the ICT tools organisations can use.

McCarthy says this is very useful in itself and it also stimulates debate among the senior management teams about their specific goals and challenges. The centre operates on a "Chatham House" rules basis and sometimes witnesses some very frank discussions among senior management teams.

Such is the pace of change in the economy that the initial central presentation has had to be replaced with one that reflects the downturn in the economy. "To some extent, we were ahead of the game talking about things that might happen if we didn't address this area. Our first presentation spent some time arguing the case for focusing on productivity and that's more of a given now," McCarthy says.

Brian Montague, managing partner of corporate law firm AL Goodbody, was an early visitor . He said he was impressed with the range of technology solutions to enhance productivity that were showcased including "in the cloud" solutions and advice in terms of how messaging systems would overtake e-mail in importance. "It was particularly opportune for us as we were about to make some strategic IT investments. We were made aware of new portable systems for videoconferencing that saved us a lot of money on what we had intended to invested in."