Boosting productivity is more than cost cutting: survey

According to Telstra's managing director of enterprise and government, Paul Geason, improving productivity can be a way of optimising "possibilities and opportunities".

At the other end of the scale, it could be just a matter of "survival".

The Telstra Productivity Indicator released today shows productivity is the priority for 80 per cent of private sector and 66 per cent of government organisations, the highest proportion since the annual survey was first conducted in 2009.

"Productivity is a word that sometime generates a negative connotation...seen purely as cost cutting. Actually, that is not the primary goal," Geason said.

"In most instances it's getting it right first time...as opposed to having (staff) dedicated to fixing problems."

He said if wasteful, unproductive work is avoided, it gives organisations the flexibility to deploy resources.

The survey found that those organisations that have achieved productivity gains in the past 12 months, or "productivity leaders", are significantly more optimistic about the future than those stuck in old working practices, so-called "followers".

Over half of the leaders (52 per cent) were more optimistic about achieving further productivity improvements in the future, regardless of the global or domestic economic uncertainty.

Leaders in the private sector believe they will achieve increased revenue (47 per cent), and increased market share (32 per cent), compared with 15 and 10 per cent respectively among followers.

Government sector leaders believe they will be better able to manage risk (43 per cent) and achieve key organisational objectives (39 per cent), compared with followers at 17 and 16 per cent respectively.

However, despite the positives of undertaking measures, the survey of 700 directors, senior executives and managers in medium to large public and private organisations found there was a 25 per cent drop in those achieving significant productivity improvements compared to a year earlier.

Geason said the driving forces for undertaking productivity reforms are different across industry sectors, operating on a: "spectrum from survival through to optimising possibilities and opportunities".

He said mining and resources companies are the most optimistic over a long-term perspective, driven by the need to be flexible in a global marketplace, and simply: "how do I get more stuff out of the earth with same or less amount of resources".

For banks it is more a short-term focus on their bottomline - the cost of accessing funds and increasingly being able to compete in a globalised market for money.

Manufacturers and retailers face the toughest challenges from increasing global imports, and a strong Australian dollar making it hard to compete in export markets.

Geason said these businesses have got to look at their business models so they can remain "lean and mean and competitive" both in their domestic and export markets.

"I think theirs is something very much about survival," he said.