Corporate Vices author shoots down latest Porter report on productivity
Charles Cohen, author of Corporate Vices and founder of Internet currency Beenz, has hit out at the latest Porter report into UK productivity which blames everyone but the businesses themselves for falling profits and slack growth.
Cohen believes that Mr. Porter’s generation of management gurus themselves are largely to blame for encouraging businesses to neglect the basics - like productivity. Instead, the buzzword bingo promoted by the management gurus encouraged managers to pursue more sexy flavour of the minute managerial theories at the expense of efficiency and often common sense.
The answer to increased productivity, Cohen believes, is for businesses to stop wasting time and money on elements like corporate branding, trendy management training courses and buzzwords and get back to running businesses along sound principles of efficient organisation, genuine innovation and capital investment in growth.
Cohen claims that:
UK businesses don’t even know the meaning of the word ‘productivity’ (25% think it measures consumer satisfaction)
No FTSE 100 company publishes productivity statistics in their annual reports
Charles Cohen says; “The majority of UK businesses pursue everything but productivity. As the Enron example has shown, profits without productivity is like lying to the doctor; you will be found out in the end - and sometimes it’s too late.”
“How sad is it that the government needs to hire a US management guru to advise Britain on how to run a business. Enron, Global Crossing, Worldcom - these are the products of that corporate culture. Perhaps they should take a lesson from us. Like Phillip Green, who turned around the fortunes of Bhs by putting productivity first and letting the profits follow,” Cohen concluded.
Cohen also criticises remuneration of directors on a share price scale, believing that they should be paid on a productivity scale instead. This may lead to businesses beginning to value the importance of productivity and delivering real shareholder value as a result.
About Charles Cohen
After graduating from Oxford University in 1992, Charles Cohen worked first as a political speechwriter in the House of Commons and then in public relations before setting up his first company to provide website content management solutions for large corporations.
In 1998 he developed an idea to create and manage a new digital currency, initially for use on the internet, which he called beenz (as in “been there, done that”). By 2001, beenz.com had offices in 12 countries and there were over five million beenz accounts. Beenz.com was sold to Carlson INC mid-2001.
Mr Cohen is now a non-executive Director of several companies as well as having direct involvement in a number of start-up businesses. He regularly speak at business and economics conferences on many of the issues raised in his book Corporate Vices. In 2002 he was elected a Fellow of the Royal Society of Arts in London and is also an Associate of the New Economics Foundation.
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