The secret of the productivity in the US is much higher than in Canada

 

    --- In the businesses of the U.S., top managements listen to and go along with the idea employee suggested. 

        Frank  Dec. 19, 2015, in Waterloo, Ontario, Canada

    http://www.kwcg.ca/bbs/home.php?mod=space&uid=61910&do=blog&id=5929

    The accounting service firm Deloitte Canada's research report The future of productivity 2012 - Clear choice for a competitive Canada offered comparison between Canada and the United States in the labor productivity and manufacturing labor cost per unit of output by curve charts as follow.

     

    

    The report indicates that, Canada’s productivity lags behind that of the United States in ‘virtually every instance,’ including those industries that have been the cornerstone of Canada’s economy for decades — mining, oil and gas, financial services and manufacturing. The manufacturing sector was called out as a particularly poor performer, noting that U.S. productivity in the manufacturing has grown at a rate six times faster than that of Canada since 2000. 

     As neighboring countries on the North American continent, with same market economy democracies, why the productivity in Canada is much lower than in the United States?

     Above report also indicated the reasons with the solutions. Indeed, for years, besides Deloitte, many similar studies have been done in Canada, but, their sound suggestions seem no help on real economy, since that the employment and revenue has been in decline with the decline of manufacturing industry.

     People may confidently attribute the decline of Canada’s manufacturing industry to global recession, especially, that low oil price heavy dragged oil production related industries; however, in the same global environment, the fact that German export surplus hits record high again and again proved that low productivity and high labor cost was no business with recession at all.

     Obviously, those economic diagnoses for Canada did not diagnose the true pathogenic source.

      In order to find out why Canada‘s productivity is lower than that of the United States, at first we should find out why the productivity is higher in the United States.

     Dec. 19, 2015, I read two articles that was in praising Hilcorp of an America's private oil and gas company. From the rational practice of this company, I found the reason of the high productivity in the US, though, the experience is just from one company, is a special case, but viewing from the overall high productivity nationally, the experience of Hilcorp should have universal significance in the United States, which was from following reason.

     The productivity of individual business is the basic components of the national productivity; the higher national productivity is also the proof of high productivity of the individual business. Similarly, the productivity of individual employee is the basic components of the business’ productivity; the higher business’ productivity is also the proof of high productivity of the individual employee.

     First article was Mandarin article This oil company made a $ 100,000 Christmas bonus to each employee, I excerpt-translate some as follow:

     Hilcorp was founded in 1989 by CEO Jeffery Hildebrand, now has grown into one of America's largest private oil and Gas Company, with 1,100 employees (as of 2013). Hildebrand builds the company's culture with special idea. For example, encourage absolute transparency and create a sense of ownership in employees.

     Hilcorp shares information with all employees, in monthly open management meeting, publish detailed performance data and target to all employees, which made new employees usually surprised. Hilcorp, in turn, also want employees to contribute to decision-making.

     Besides reward of cars and company allowances, Hilcorp also encourages employees to invest in the projects of company. The project is successful, there is their share. The company is also providing generous dividend to all employees (annual average dividend payout ratio is 35% of the basic salary).

     In the survey, the employees often praise that managers can "quickly get rid of underperforming person." "We can get anything."

     The second article US company Hilcorp gives 1350 employees $137,000 bonus provided more detailed in Hilcorp’s business culture.

     1..  Established core values: "Work Like You Own the Company", "When Hilcorp Wins, We All Win" and "Get Better Every Day".

     2.. The Mission: Entrepreneurs unlocking energy for the betterment of our employees and our communities.

     3.. Employees have the autonomy to make decisions, a place where all its employees can develop and grow a career in a field they are passionate about. 

     4.. The employees surveyed for the Fortune list cited empowerment, freedom, responsibility and communication as characteristics that make Hilcorp a great place to work.

     5.. One employee praised that: “When you suggest an idea to upper management they really listen to you and most of the time they will go along with the idea you suggested,”, “I never had that before with any other company.”

     As a result, Hilcorp created a friendship workforce that composed mainly by the people that motivated enough with strong ability.

     Above information may not be comprehensive for Hilcorp, but it is enough to tell us that the successes of the Companies are depended on fully inspire, mobilize, and use of the intelligence of all members.

     However, Canadian companies have been going in the opposite way.

     Jan 27 2014, in the article The Fatal DNA of RIM & Canadian Enterprises, I indicate that: 

     The successful enterprises are mainly driven by motivating their employees fully exerting intelligence. The failed enterprises are mainly due to that their employees cannot free exerting intelligence. 

     That suppresses employees in freely exerting intelligence is the fatal DNA of causing enterprise decline. 

     For RIM's decline, people can find many sound reasons, however, I think that, the most fundamental one is the stifling intellectual work environment, which is that suppresses the free exertion of intelligence of the employees without a proper channel for employees expressing their views freely to have damaged the driving force for continuously self-revolution to fit the market that increasingly rapid changes.

     Such a corporate culture is common in Canadian enterprises, which is just opposite that of smart doing in IBM and German Companies.

     This is one of important lethal gene fragment in Canadian enterprises.

     May 28, 2012, in the article The DNA of the Success of German Manufacturing, I mentioned that, the driving force for German outstanding manufacturing mainly comes from their legislated management for rationalization proposals, which is with profit-related bonus to motivate all staff to pay their full talent into the business running, since Mr. Friedrich Alfred Krupp initiated it in 1872. Now, in all German businesses, their staff can use computer network systems to easily submit or query their proposals.

     I once read a report in Mandarin, that the Financial Crisis 2008 has caused great panic in worldwide business community, however, a German government official said that: our German companies are not worry about; we can call all employees to dig potential within the enterprises to make self-compensation. In fact, in the European Sovereign Debt Crisis, the industrious Germans play a role as that of the savior for those European losers.

     Dec. 22, 2011, in the article  The DNA of the Success of IBM & America's best-run companies,   I mentioned that, the driving force for 102 years old IBM is still full of vitality and the patent invention has been counting on the top of those world-class corporate giants in the United States for 20 consecutive years in 2013 is the patent-related bonus incentive system. In IBM, for any staff, published an article, approved a patent, all have assessment records with regulated cash awards.

     Above incentive methods are common in China for decades, which all employee have consciously accustomed to do everything possible for the sake of business under the motivation of bonus, which is why that China's economy has rapidly developed within decades and it said that is the process of a century in other countries, and now the daily goods that labeled with made in China are throughout the world.

     Aug. 10, 2013, in the article Industrial Engineering, the magic for improving production efficiency I said that: “As my experiences, that many initial designs of machines or production technologies are not perfect with somewhat shortcomings despite the designer has considered every possibilities carefully. They need to be found and improved in practical use.”

     “In the realistic production, there is much such room for improving but lacks being paid attention because most of business' owners are never thinking of motivating their employee to think about why and how. The production lines' operatives are the main force of this activity.”“Since that the improvement requires repeated personal observation or experience, the operators who are working daily on the production line is easily to find them, rather than that of technicians or management staff who never practically operate in person.”

     "The improvement processes are often very simple but have big potential of the cost saving. The results are often contrary to the common sense of the public. People would be surprised to ask that, why I did not think of about that before.”

     "In China, the Enterprises set up three-pronged team by operators of production line, technicians and managements' staff. The operators are able to find the problems, but may be without the ability to solve the problems, so they need the help of the technicians for doing some design, and the managements' staff may help to organize the whole practice."

     But, in the businesses of Canada, such a significant manner seems to be taken as illegal, in the eyes of some Canadian business owners, in the eyes of some of their management staff, and even in the eyes of some of their common employees, the proposal provider is too bad to allow working in the company by making every efforts to squeeze them out, without essential sense of how to ensure the healthy development of their company, and thus to keep their jobs for making their livelihoods to keep their families survival in the times that the businesses and the jobs disappear continuously. 

     Besides that, there are many other bad factors in effecting the health running of the Canadian Businesses.