How to boost British productivity and save the NHS all at once

Unipart boss John Neill reckons he has the answer to the UK’s industrial doldrums. So he’s off to Davos to tell everyone, George Osborne included

BY Katie Allen Monday 18 January 2016 15.00 GMT

As George Osborne heads down to breakfast in Davos this week, he should brace himself for a lecture along with his muesli.

John Neill, the businessman who spread the Japanese concept of “lean manufacturing” around Britain, wants a word with the chancellor about the UK’s woeful productivity record. He is on a mission to change the way Britain works, from restaurants to the NHS, and plans to corner Osborne when they are both at the World Economic Forum.

“I hope I bump into him at breakfast at Davos,” says Neill, chairman and chief executive of the car parts company Unipart.

“The opportunity for the nation to massively improve productivity, particularly in the state-run sectors, is huge. We are trying to get people to understand there is so much you can do to improve productivity. You don’t need capital. It’s creativity before capital, or grey matter before the green matter,” he says.

Neill is speaking from long experience, or what he would probably call a “journey”. In 1976, aged 29, he was put in charge of the parts and service division at state-owned automotive empire British Leyland. In the 1980s he led a management buyout of the division, and when he found himself saddled with some of the worst factories in Britain, Neill scoured the globe for ways to turn them around.

Unipart now has a turnover of £700m, with more than 6,000 employees around the UK and overseas. What the company has learnt along the way about eliminating waste, improving customer service, and training employees has been turned into the Unipart Way, a method its consultancy arm exports to other organisations such as HMRC and National Grid.

Neill is evangelical about the Unipart Way, which is used in every part of the company, from the factory floor to the finance department.

The chief executive even put the scheme into place at the company canteen after a long wait to be served one day prompted him to fire the outside catering company, hire in the staff and retrain them. Walking around Unipart’s head offices on the outskirts of Oxford, Neill proudly declares: “You will meet people who I would argue are the best in the world at what they do, whether it’s picking parts or baking cakes.”

Unipart’s proprietary version of leanness comes with its own corporate university, where huge billboards urge visitors to “join us in the productivity revolution”. It is there that Neill expounds the Unipart Way to newcomers with the help of videos, wall charts and catchphrases such as “learn at 10 and do at 11” or “gate to great” – in what Unipart also calls the “learning journey”.

As he walks the university’s long corridors, the industry veteran is always ready with a neat turn of phrase, statistic or anecdote. He recalls asking virtuoso Chinese pianist Lang Lang about practice, he quotes studies about creative thinking and, when challenged that the Unipart Way could be seen as a little cultish, he shoots back: “It’s a philosophy rather than a cult. But it is a culture.”

One recent guest was Bank of England deputy governor Jon Cunliffe, who has spoken about the “puzzle” over sluggish UK productivity growth since the crisis.

Neill invited Cunliffe to the Unipart university to argue that the “productivity puzzle” was no such thing. It is the same message as Unipart’s national productivity campaign, which was launched last year to tackle the country’s record productivity gap. The idea is to “take away the excuse that it’s a puzzle”, and therefore the attitude of “well, what can we do?”.

“If the whole nation thinks that then we will never change it,” says Neill.

The UK has plenty of catching up to do based on the latest figures, which suggest that output per hour from UK workers was 20 percentage points below the average of other leading industrialised nations.

Neill’s pitch to Cunliffe, and anyone else who will listen, is that productivity in the best British manufacturing has come on in leaps and bounds, and that others need to learn from those examples. The Bank’s deputy governor himself has remarked that if productivity growth in the UK economy as a whole had matched that of the car industry between 2007 and 2014, the economy would be 30% bigger.

So what can be done?

Neill’s answer, of course, is to implement the Unipart Way anywhere and everywhere.

In practice, his productivity plan means spotting problems and tackling them head on, monitoring and continuously enhancing every process, encouraging employees to suggest improvements, and giving people training and space to think. For him personally that means finding time to read, being mentored by Unipart’s chief digital officer, and going to Davos.

Around the Unipart offices and warehouse, the most obvious feature of this lean philosophy is the constant monitoring. Whiteboards everywhere are updated hourly and marked with colour-coded dots to show tasks that are on and off target. This relentless benchmarking is not for everyone, Neill admits, nor is the practice of watching workers to find ways to cut waste.

“In many companies, if you had somebody standing with a clipboard, a stopwatch or a camera watching others, that would be regarded as intimidation or bullying, and you’d get a lot of resentment,” he says.

But at Unipart, he argues, people understand the culture is not one of blame, but about making work better.

“There isn’t a conflict between higher productivity and increased satisfaction out of your work. In fact, improving productivity using the Unipart Way increases employee engagement, and we have endless research on this.”

Not that everyone buys into the research. Neill recounts infuriating one senior surgeon over what a car parts company could possibly teach healthcare.

But he insists the Unipart Way could save millions for the NHS, or “our Greece”, as Neill dubs the health service.

Neill’s view is that the NHS needs a complete overhaul rather than the current “patchwork quilt” approach. “You could get the quality up, you could get the cost down, you could improve the culture of engagement, and you could create time for innovation. But you need the whole of the Unipart Way to go in.”

Neill does not see that happening, and remarks that it is not his place to deploy Unipart resources to rescue something he cares about. But it weighs on his mind.

“Unless we fix the productivity in the health service, I don’t think I want to be old in Britain,” he says.

This raises the obvious question of Neill’s own future at Unipart. The company says it does not give out the boss’s age but he is approaching 70. Despite that, he is clearly in no mood to slow down.

“I love what I do. So why wouldn’t you keep doing it? I asked [Sir] Martin Sorrell’s chairman when is Martin going to retire, and he said: ‘Probably a week after he dies.’ That was a good answer.”