Tan Kin Lian's Blog: Increasing productivity in Singapore

Wednesday, March 03, 2010

Increasing productivity in Singapore

There is now a strategic thrust to improve productivity in Singapore, to become less dependent on low cost foreign workers. Some people are sceptical. They say that this slogan is nice to say, but difficult to achieve. In some respect, they are right. The productivity campaign was first launched in Singapore three decades ago. Why has it not made much progress during this time?

I want to give a honest view, although some people may not like to hear it. We have a culture in Singapore of saying nice things, but not addressing the root of the problem. This is why we were not able to improve the birth rate, in spite of top level priority and massive effort expended for more than two decades. Improving productivity is another challenge that has not been overcome.

What is the root of the problem? We tend to take a theoretically approach towards solving our problems. We can say nice things and adopt strategies crafted by consultants, who do not really know the problem. Their solutions come from the text books, but are not practical. Some people say that this is the price to pay for letting scholars run the country.

We need to look at the root of the problem, before we can understand and find lasting solution. To improve productivity, we have to overcome the risk adverse mindset of Singaporeans.

Many people feel safe in keeping the status quo and are quite good in identifying reasons to keep the status quo. They will not make a change, unless the decision is made by someone at the top. Singaporeans are generally good at identify problems, including imaginary problems, rather than implementing change and improvements .

Singapore is also a wasteful society. We spend a lot of money on technology and management consultants, instead of implementing simple and practical improvements. Many people do not want to take the responsibility, so they pass the buck to the consultants, who take the big fees and also do not find any solution.

Can this mindset be changed? Yes, it can. The best way is to require a change to be done and to give a small budget for the change. You will be surprised how resourceful people can be, if they have limited budget and the responsible to solve the problem. i.e. no excuse accepted.

Tan Kin Lian

30 comments:

Anonymous said...: Just like our attempts at increasing the birthrate, this latest attempt to improve productivity is not going to work.

1. How do we define productivity?

2. Given our limited resources (etc. etc.), how can making our workers work at a cheaper, better, faster rate make that much of a difference?

3. The real quantum change has to occur at the top.

If Singapore is marching in the wrong direction, telling the workers to work cheaper, better, faster will only bring us to disaster at a faster pace.

4. Here is an example of leading from the front. Alexander the Great at the Battle of Gaugamela.

Outnumbered at least 2:1, Alexander personally led the cavalry charge straight into the centre of the Persian army where the Persian King Darius III was located (protected by Persian's finest troops).

SOURCE:http://en.wikipedia.org/wiki/Battle_of_Gaugamela

I don't think we are going to get this type of leadership in our productivity drive.; March 03, 2010 9:09 PM
Anonymous said...: It is very true that nowadays even our town councils behave in this irresponsible way. Before the new year, upgrading works were underway in my area but for months nothing was done in front of my block except a barricade and grass patches were removed. The grass has since grown back and still nothing was done and I called up the town council. The officer and manager were both not in and my number taken down for them to call back. New Year came and went and nobody called back. I went personally to the town council and queue to see the office or manager but again they were busy, this time I was told having a meeting. I register my complaint again and the next day the officer called back, saying that he thought the PR consultant company called me back. He then said that the right party to call would be the PR consultant of the contractor company. So it seems that nowadays everyone is outsourcing to consultants so that they will not be implicated and their KPIs affected. They can always blame the consultant for not doing the job when it is their job in the first place. Singapore has become a for show place, wayang and playing taichi at the public expense. I wonder how much it cost to outsource to an external pr consultant and who is paying for the cost.; March 03, 2010 9:52 PM
Anonymous said...: Productivity is nothing new
But lots of miscommunication, misguided implementations etc.

What are the guidelines?
How do we measure Procuctivity?
Appraising Productivity?

Not all companies can fit the term Productivity & there should be some
form of National Guidelines.....; March 03, 2010 10:13 PM
c k hoo said...: Maybe Mr. Tan yourself may want to point to us a few of the recent examples, in more detail. Thanks.; March 03, 2010 10:43 PM
michael said...: To increase productivity is something to do with changing the old paradigm to the new paradigm. Many Singaporeans used to drag themselves to work every morning especially Monday morning. Why? Because the old paradigm is at work on them.
Old Paradigm:
Work Hard - Make Enough Money - Do What I Love.
New Paradigm:
Do What I Love - Make Money - Continue to Do What I Love.
In view of the above wrong(the old/outdated ones) mindset, it is therefore critical that our educational system needs to inculcate the young minds the new/right paradigm during their schooling days.; March 03, 2010 10:56 PM
fustrated_nsmen said...: Want to increase productivity?

One major obstacle to productivity in Singapore is NS obligations such as reservist and RT/IPT trainings. Especially the latter, it requires employees to leave their workplace earlier and spend up to 4 hours in the camp just doing exercises and workouts. Even the workouts can be reduced to just 1.5 hour. Alot of time is wasted on waiting waiting and waiting. Just like the famous phrase "wait to rush, and rush to wait". In my own opinion and experience, RT/IPT doesn't yield much improvements to one's fitness either.

Our government should at least consider abolish RT/IPT trainings for NSmen. The time can be better utilise on productivity at work, upgrading oneself, or taking care of family members.; March 04, 2010 12:11 AM
jamesneo said...: There is no wrong actually if they consult the right consultant. The problem is whether the people they consult are scholars with outdated knowledge and only follow old textbook theories or are more in touch with studies that other countries have carried out for increasing productivity that are more relevant for the new economy of today.; March 04, 2010 12:31 AM
Anonymous said...: Back in the late 70s and 80s, productivity drive was successful to some extent because of full employment of citizens -- wages were shooting up and there was a big concern to slow down wage growth. It was also easy to implement productivity because of the low starting base -- companies could just install some automation and also not fire any workers and still could get increased productivity -- simply becoz each worker could now produce more with same working hours and expending similar effort. The increased outputs plus continued strong overseas demand plus tight labour markets resulted in win-win-win for companies, workers and govt.

Right now, our economy has already climbed halfway up Mount Everest. The easy part of the journey is long over. Unfortunately during the 90s and the 00s, instead of taking the hard decisions to fundamentally revamp and evolve the economy and companies for the next leg up, the multi-million dollar govt chose more of the same i.e. cheaper, better, faster. Their solution? Import tons of cheap foreign workers for every portion of the economy. That's why after 45 yrs, our govt leaders still use the same 3rd-world countries as our main competitors: M'sia, Indo, Thai, and now China and Vietnam. Where the only weapon is to be as cheap as possible.

You have to wonder about countries like Australia, UK, US, Canada and other European countries how they manage their productivity growth w/o 34% foreign workers and with strict wage laws.

Productivity? I think it has to start at the top. 3 ministers w/o portfolios, 2 DPMs, 2 SMs, 1 MM just to support 1 PM -- this is bordering on either criminal expenditures or criminal incompetence or both.; March 04, 2010 12:47 AM
jamesneo said...: Here is one statement from patra et al "Productivity Improvement Using Ten Process Commandments" that i find interesting:

lead by example, train employees to provide a quality product, create an environment where there is no fear to share knowledge, and give credit where credit is due.

It is important for our government to understand these non-exhaustive words to be really be successful in their transformation. If they blindly follow what they are proposing now without consideration of feedbacks i feel it would be another decade of lost productivity.; March 04, 2010 1:01 AM
Ex-Con said...: Actually I would say that this productivity is NOT really the problem at all!!

The fall in productivity did not happen by chance, neither by singaporeans suddenly becoming lazy or stupid. It is merely a side-effect of a policy to open the flood gates to foreign workers at all levels.

The productivity drive largely succeeded in the 70s and 80s becoz there was a limited supply of workers. This time round, as long as PAP refuse to dramatically close the gates to foreign workers and impose things like minimum wages and strict labour ethics, this productivity drive will be just a big fat wayang.

In fact, PAP is merely using this productivity as a distraction for fundamental problems with their labour policies. And lagi best, the govt throws the problem at us --> see, you people better work harder and smarter, otherwise if no improvement in productivity we will continue to mass import foreigners!

It is the stubborn refusal by PAP to admit that uncontrolled influx of cheap foreigners led to the drop in productivity. And they would love to continue their old ways, except for the upcoming GE acting as a speed bump.; March 04, 2010 1:18 AM
Anonymous said...: Will the new Productivity campaign
lead to "HIRE & FIRE" tatics employed by some MNC's to tap one's expertise (knowledge/skills/productivity on working smart etc) and paying higher salaries then later on, start FIRING due to their Bottom Line - PROFITS being eroded by default or due to unfortunate events etc.; March 04, 2010 7:15 AM
Anonymous said...: Forget about all the motherhood speeches.

Show me the MONEY!

What do I get for being more productive?

I know the economy benefits, my employer also benefits. So what do I get?; March 04, 2010 7:25 AM
Anonymous said...: What Productivity are we talking about? and all I know in Singapore, it is an uphill task as we failed severely in the Biggest Productivity of replacing ourselves by having lower childbirths....this will in turn lead to the influx of cheap foreign labours and the only productivity is to collect increased LEVY........very Productive indeed!!!; March 04, 2010 7:37 AM
Anonymous said...: REX comments as follows on Ex-con comment 1.18 am,

I don't quite agree that productivity decline is due to the influx of foreign workers.

For sure, "Productivity" is a mathematical concept, equals to "Quantity Output divide by Quantity Salaries". As far as cheap labour is concerned, the foreign labour are cheap, and as far as output is concerned, generally I feel that they are effective, you can see ION, 313, Central, Roadworks, everything, all come up within 2 years. So output divide by input, AS FAR AS FOREIGN WORKERS ARE CONCERNED, i personally think it's quite reasonable and quite productive..

What went wrong with productivity then?

It is the rest of the economy sectors. Service, Manufacturing, R*D, and yes, Civil Service. Coupled with weak demand, output of goods are reduced. Service standards are falling because people are stressed out with bad policies implemented by the government. An unhappy worker is an unproductive worker. But wages are the same: therefore based on the formula output divide input, the productivity reduces.

Of particular importance is the Civil Service. In recent years, the top Civil SERVANTS ( remember they are SERVANTS) e.g. MM, PM, SM, President average salary, is about $3.2 miliion a head (INCLUSIVE 13th month and, say, 2 month bonus - don't ever forget) times 4 which is S$12 million a year. Their "output" is, arguably, very difficult to measure. But for the sake of argument let us say their output is "good" because Singapore didn't experience economy collapse in the last 10 years. So, taking the formula "good output" divide by their total wages, for sure productivity is abysmal and declining tremendously.

As someone said, we have to start from the top. The government is EXTREMELY unproductive. Mr Lee Kuan Yew alone is enough to run Singapore. All the rest could jump into the Straits of Singapore and help to reclaim more land to sacrifice for our nation.

REX; March 04, 2010 8:05 AM
Anonymous said...: Straits Times, 4 March 2010, page B2.
"Singtel mio TV glitch"

Here is a classical Singaporean "productivity" problem in the making.

- What's the point of asking workers to be more productive (cheaper, better, faster) here?
- how much difference can that make in this situation?
VERSUS
- better leadership at managing this problem

Which is a better solution?

- Hire more customer service operators, buy better telecommunications equipment?
OR
- a leader calling for a press conference (one of many possible solutions) to communicate the problem to the customers.

Leaders must lead from the front.

Subordinates respond very differently to a leader shouting "Follow me boys!" from the front. Versus a leader giving motherhood speeches and barking orders from the rear.

And this is the point of my earlier posting about Alexander the Great leading his cavalry in a charge at the Persian King Darius III at the Battle of Gaugamela in 331B.B.C. That cavalry charge won the battle and brought the largest empire (Persia) under Alexander's rule.

Alexander believed Gaugamela to be important enough for him to personally lead the cavalry charge.

Is productivity important enough for our leaders to personally lead the charge?

Alexander was staking his life. What are you staking?; March 04, 2010 8:54 AM
Anonymous said...: Imagine a Mr. Know-all, earning $150,000 a month telling the men- on-ground earning $1,500 to work Cheaper, Faster and Better. Then on the other hand, slowly reduce the inflow of foreigners after taking in 1.25 millions foreigners whose wage is very much lower than locals.

If their Grand Plan does not work, then blame it on us, open the flood gate for foreigners and push up GDP. With a higher GDP, then justify for another Minister pay raise.

Sometime I wonder how long and how often the ruling party wish to hookwinked the voters. Do remember the middle aged people are boiling inside while the younger generations are more vocal. Next, why the talk about productivity and KPI when the Govt paid the President $3.5 million a year with no achievement year after year? Why waste money on casting votes for President? Such a waste of money adventure.; March 04, 2010 9:26 AM
Talk only said...: There used to be staff ideas.

This was one way staff could share their ideas directly with management on issues that affect quality and processes.

There were focus groups.. the successor to WITS and QC circles.

All these were thrown out or ignored because no one had time for them, or
people were not trained to facilitate the meetings. No time because many managers thought that productivity meant multi-tasking.

Multi tasking till death.

Mr Tan had shared a situation he observed somewhere in Europe where a restaurant had waiters who were equipped with hand held devices to take orders, serve and collect payment. This is very well and good and raised productivity.

It can work here too... but...
strict rules must be enforced in working hours, minimum wages, and employment laws.

I do not see that happening now or ever.

Now, as usual.. singaporeans' reaction to this new council and drive to raise productivity would be: wait & see how.

One big circle again.; March 04, 2010 9:46 AM
Anonymous said...: The concept of productivity is not new but the way it is now being communicated is as if we now find a new solution to the problem!; March 04, 2010 10:00 AM
Anonymous said...: You are aboslutely right ! There is a chinese saying "one jab and you see blood immediately"

Added to this; my view is the government was perfectly aware of this issue years ago when they opened the floodgate to foreign workers. They needed a fast solution and they took the easy way out.

Our growth in the last few years was like a company increasing its bottom line impressively but earning per share hardly moved. So management of the company get good bonus and rewards but shareholders' wealth hardly changed.

That is why despite the good gdp growth numbers, Singaporean's quality of life has actually deteriorated (EPS actually declined). The lowly waged Singaporeans actually found themselves most worse off.

This talk of productivity co-incided with the completion of our IRs. You think it is by chance ? Now they do not need so many cheap foreign workers to build the IRs.

Also in theory casino does produce high value add in numbers (eg. high sales/employee) but they are hardly real life productivity. It is just paper value add because bulk of revenues from casinos go to casino shareholders and govt coffers and not to high value added workers. At least on paper they can boost productivity. But on paper you do not factor in the social costs.

Hey, everyone is taking short cuts. We are like those guys on Wall Street.... I think we idol them.; March 04, 2010 10:25 AM
symmetrix said...: Low productivity may not be a bad thing after all.

Let's look at this matter in perspective. Look at sg and compare it with other first world countries with higher productivity viz Aus, USA, Japan. We have the highest ministers' salaries, high housing prices, very high car prices, millions of foreigners, but low income tax, low GST/VAT, low food prices (at hawker stalls, no minimum wage laws, no independent employee unions, and low productivity to boot. With all these factors, sg has somehow become the 3rd richest country in the world (in terms of GDP per capita). So where is the logic?

Perhaps low productivity is what sg needs to sustain this economic model, which has somehow worked for sg the last few decades. As some bloggers have eluded to, this sudden productivity urge could be a smoke screen, to divert attention from other real challenges ahead.; March 04, 2010 10:25 AM
Anonymous said...: Statistics show that the productivity of our workers in the services sector is lagging far behind Hong Kong's. And our workers in the manufacturing sectors is lagging far behind Japan's. These are hard numbers. Why?

We could just find out the differences(or shortcomings) and learn from them. No need to spend much resources to invent new ways to catch up or overdo them. Until we are on par with them then we think of even better ways to improve.

Finally, we have to be smarter since other would not be standing still.

CCL; March 04, 2010 10:40 AM
Anonymous said...: The so called "productivity" is just pushing all the "dirty work" to the consumers to do, where the helpess consumers just cannot say no.
See what all the big companies (FIs) have been doing.
Even a simple call to them will waste so much of your time, and most of the time is just a waste of time calling them. Bec finally you will still have to do all the "dirty works".; March 04, 2010 10:42 AM
C H Yak said...: (1) Our culture need to change because of we have a natural resistance to change because of "Fear to Change" ... if change is needed, companies just bring in "Change Consultants"....which Mr Tan said may not understand root issues.

Change consultants only make recommnedations for solutions at macro-level. They are seldom directly involved in the actual detailed implementation and will certainly not answer for the resulting complications...

(2) To boost productivity, I think it involves 2 sub-strategies
(a) strategic managment of technology
(b) buiness process re-engineering

2a involves application of new technology to value-add in the production process...the present context is not just simply "mechanisation" ... the mechanisation must involves new technology...often expensive...and so the Govt provide tax incentives...It is no more just "man vs machines".

2b involves changing the whole process of doing buiness...may start with 2a but leads to other processes in the value chain...this is the complex part...implementation is tough and may not be supported by the right organisation culture...the PMETs must be not only efficient but also effective...It is no more just simply adding the number of PCs and softwares in the office or providing Internet. It also involves an "organic" firm operating and reacting to the outside world or buiness environment, etc.

These 2 sub strategies should involve the firms' management (upper and mid level) more than the labour movement to cut the "waste" as suggested by Mr. Tan. I find it weird why the labour movement (NTUC) is calling the shot in Budget debates...just because they are advocating that workers should be re-trained.

But simply training workers will not help much. I feel it is the PMETs that counts most in 2b.

Last, let's look at the cultural aspects. We need to get rid of the "Fear to Change" mindset. Next we need to look at the "hygiene" factors and "motivators" in management.

When PMETs don't even have the current employment laws to protect them against the uncertainties of retrenchment and workers fear of being trapped in low wages without a promised frame work for salary rise; such as a "minimum wage policy", it is hard to get all 3 Million workers all boosted up as what the NTUC Chief envisaged and called out in Parliament.

It is strange that Singapore is small and viewed as a business entity that we are strategically moving this way as a nation to take care of productivity.

Shouldn't it be just our industries that should be evolving and firms reacting organically and taking initiatives to this so called "productivity" strategy.

I don't see it is an innovation by our Govt. When I graduated and stepped out into the labour market more than 20 years ago, and joined a MNC manufacturer then, there was already "productivity through industrial engineering" and "zero defects quality education policy" within my firm...there was no budget debate on productivity then...but what I appreciated every month-end then that there would be a small "productivity bonus" in the my pay-slip although a very small variable, although I was a mangement trainee and not a production worker...the motivation factor.

I also find it hard to be related to the "foreign worker" policy which many MPs and NTUC leaders are citing in support of their arguments for this movement.

But the strange part would be that even Change Consultants would say that nearly 70% of Change Processes for 2b would fail ultimately.

Link : http://condor.depaul.edu/~nsutcli1/LeadershipBPR/BRPLdrshipInI&M1199.pdf; March 04, 2010 12:00 PM
Anonymous said...: There has been widespread skeptism that the recent productivity drive will have the desired effect. Minister Lim Swee Say said this at yesterday's budget debate:

“The story goes that in a kingdom of frogs, the tallest tower in the world is built for an annual competition. And when the event is held, many aim to become the champion by making it to the top, but fail as they are discouraged by the audience, who warn that the climb is too dangerous. All except one frog who did reach the top. And when asked afterwards why he ignored the crowd, the frog said: ‘I’m deaf. I can’t hear them.”

“We never give up. We are like the little frog. We are deaf to all these criticisms."; March 04, 2010 3:21 PM
Anonymous said...: Dear Aurvandil

I certainly agree with the honourable Mr Lim that he is "deaf to all these criticisms."; March 04, 2010 8:38 PM
Anonymous said...: Do you notice PAP is that deaf frog? That's the reason why they don't admit wrong policies but just change as and when they feel like it. Regardless whether how strongly the people felt. Example Foreign workers.

Continue on this route, they will be ruin.....; March 04, 2010 8:51 PM
Anonymous said...: I REALLY hate to say this,and I'n not cursing him, but productivity will only increase when LKY passes on.

Why? Because he's the God in Singapore. Everyone becomes a useful idiot with him around -useful because we are efficient when listening and obeying his instructions, an idiot because we can no longer make any independant decision without him. How productive can 4.99mn useful idiots(cabinet ministers,PM and those on ESC included) be?

Only when God is dead will we wake up and say "Hey,I've got an idea! Why don't I do this for myself?"; March 04, 2010 9:48 PM
Anonymous said...: One example of the status quo is the requirement for NSmen to go to the ns portal and key in dates that you will be going overseas.

This is a waste of manhours as firstly when i scan my passport you can already pass the information from ICA to Mindef.

The requirement is due to the old 'paper' way i guess.

Secondly unless you disallow me from going out of the country if I did not informed mindef if not the very act of informing mindef is totally useless.

And the best thing is when you get back mindef would by then magically 'know' that you've been oversea without informing them and now they can fine you. Does anyone see the stupidity here???; March 04, 2010 10:40 PM
Reflective said...: The philosophy here seems to be " hurry up!!.. they will catch up with us..!!" There is a constant reminder that we cannot stay still.

Innovations and creativity can be nurtured, but many of us here have subscribed to the mantra of " just do first"

China has more than a billion people.. I do not see any innovative ideas comming from them.
So far they have copied everything from the Japanese, Koreans and the US. I do not see "new" ideas.

Our coupon parking system is innovative and new, and it shows we can have great ideas if allowed to grow. We have reached a stage of our lives that there should be more reflection and nurturing to generate new ideas and innovations.

But.. there is always a 'but'.. the Gov thinks otherwise.. beacuse of the fear that the neighbours will overrun us. This is the true source of kiasu-ism.. from the head, and we all know who that is.; March 05, 2010 11:04 AM
Anonymous said...: My take on productivity is that it shd be bottom up and not top down, say if you were to evaluate the productivity of any SME staff, I believe they are very "productive" because they have to survive.

But the real problem now is declining global demand. Previously with the globalisation that induct China, India and emerging countries into the world markets, we have global over-supply of cheap goods/labour, so cost cuttings are essential for us to survive to compete against these low cost countries since our costs are higher.

But with the new normal global economy where US and Europe are deleveraging and saving more, it is no longer relevant for companies just to cut costs, as it is inevitable consolidation of supply side will take place. No matter how much productivity gains we can make, they only work on the supply side equation only, and therefore I think they have limited effects in the middle to long run.

So if you ask me, I would think the best bet is to go to markets/products/services where you can sense that there will be increasing demand in future, and once the new normal global economy stabilises and bottoms, will be the first to reap the returns.; March 05, 2010 8:29 PM

Wednesday, March 03, 2010

Increasing productivity in Singapore

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