Productivity, cash Flow and the case for smarter leadership (on and off the field)
Australia’s economic scoreboard doesn’t make for pretty reading right now. Productivity, the ultimate marker of efficiency, resilience, and long-term prosperity, continues to fall. Unless something shifts, we’re staring down the barrel of another tough season.
According to the latest figures from the Australian Bureau of Statistics, labour productivity (measured as GDP per hour worked) declined for the fifth straight quarter . We’re now operating at the same productivity level we were back in 2016. That's almost a decade of going backwards.
Add to that our rising cost base, tight labour market, supply chain congestion, and eye watering energy prices, and it’s no wonder many Australian businesses feel like they’re playing uphill into a stiff headwind.
Why this matters for business
Two of the clearest indicators of resilience in any business are:
Strong productivity, and
Consistent cash flow.
Together, they’re proof that your systems hum, your culture’s healthy, and your team’s got the clarity and confidence to deliver value, even when the economy isn’t.
Good productivity means you're getting better output with less waste. Good cash flow means you’ve got fuel in the tank. Both are critical if you're going to navigate the sort of choppy market we’re in now.
What’s Getting in the Way?
A few things:
Energy: Commercial energy costs are among the highest in the OECD, which is bad news for our industrial markets.
Labour: Wage pressure and skills shortages continue to squeeze margins.
Policy paralysis: Regulatory inconsistency, knee-jerk spending, and risk-aversion in Canberra have created an environment where innovation is either smothered or punished.
While Prime Minister Albanese talks about productivity, his government’s policies are doing anything but helping it. Throwing cash at problems and expanding bureaucracy isn’t a strategy, it’s a holding pattern. You can’t cost-cut your way to growth, and you certainly can’t spend your way to it either (looking at you, Albo).
So What Can You Do?
Here are three things leaders can do right now to drive productivity and cash flow, regardless of what’s happening in Canberra:
1. Empower your people to think like lean operators.
Get creative, cut waste, and improve output. The Japanese didn’t build global business icons by inflating org charts or dodging risk. They empowered frontline workers to identify inefficiencies and improve them. Lean thinking isn’t a buzzword. It’s a mindset that says: We can do better.
2. Get clear on your value and prosecute it properly.
Make sure you’re not trying to be all things to all people. Focus on your core competencies. Find your point of difference. Serve the right customers better than your competitors. Deliver value consistently and at a premium price point. Our current policy makers might think government spending is the silver bullet, but in business, clarity and consistency beat scattergun strategies every time.
3. Back innovation and managed risk-taking.
This is not a country that currently rewards innovators. Right now, Australia is exporting talent, ideas and tech faster than we can create them, because other markets back risk takers. Here? They're met with red tape and revenue departments. If we don’t start giving our people the space to think outside the box, we’ll lose them to competitors, or to countries that do. Save space in your organisation that allows your brightest sparks to bring some of those big ideas to the table.
Just like origin, you need more than defence to win
Tonight, Queensland takes on New South Wales in State of Origin Game 1. Defence will be crucial, but you can’t win games by just holding the line. Eventually, you need scoreboard pressure. You need those game-breaking moments from a Cam Munster, a JT, or a King Wally. You need creativity, belief, and momentum.
Same goes in business. Cutting costs is like making tackles. Important, but it won’t win you the game.
Cash flow is scoreboard pressure. Productivity is metres gained. And innovation? That’s the magic play that turns the crowd.
So, whether you’re a Killer Cane Toad or a Crappy Cockroach, tonight you’ll see the productivity, cash flow, and innovation masterclass we all need.
You can bring the same spirit to your team. Empower your people, play to your strengths, reward creativity, and ignore the noise from the sideline (yes, even if it’s coming from Canberra). The future of the Australian economy isn’t going to be saved by another tax or taskforce. It’s going to be built by leaders, like you, getting the fundamentals right.
Need a fresh set of eyes on your business?
If you’re looking to drive productivity, boost cash flow, and back your team to play a smarter game, I offer a practical, lower-cost alternative to the typical shiny-shoed Big 4 consultant.
Shoot me a message if you want to cut through the noise and get moving on what really matters.
Let’s get your scoreboard ticking again.