Wales' most productive businesses share four common traits: they focus on customers, invest in people, develop strong leadership and use technology to improve efficiency. Economic Intelligence Wales found these factors consistently appear among Welsh Productivity Heroes.
There are plenty of businesses that seem to go from strength to strength. They're not always the biggest companies. They might not be in the fastest-growing sectors. But they still find ways to grow, create jobs and improve performance year after year.
Recent research from Economic Intelligence Wales offers some clues. It identified more than 1,700 Welsh businesses described as Productivity Heroes - firms that are increasing productivity while continuing to grow turnover and employment. Together, they’ve generated more than £6 billion in turnover and created more than 5,200 jobs, demonstrating that productivity growth and job creation can go hand in hand.
The question is: what can other businesses learn from them?
What is driving productivity growth in Welsh businesses?
Productivity is usually misunderstood.
For many, talking about productivity makes them think about automation, cost-cutting or doing more with fewer people. But business productivity is about creating more value, and finding better ways to serve customers, develop people, improve processes and strengthen performance over time.
What's interesting about Wales' Productivity Heroes is that they can be found across a wide range of sectors, from manufacturing and construction to hospitality and professional services.
That tells us productivity growth isn't limited to one type of business. It's often the result of getting a handful of fundamentals right and improving them consistently.
Why customer focus is essential for improving productivity
The most productive businesses don't just focus on what they sell. They focus relentlessly on who they sell it to.
Understanding customers helps businesses direct their time, effort and investment where it will have the greatest impact. It helps them refine products, improve services and make better decisions.
Customer feedback can also be a powerful driver of productivity improvement. Businesses that listen carefully to customers are often better positioned to spot opportunities, solve problems and create value. Businesses that understand what their customers value are often better placed to improve performance and grow sustainably.
How investing in people can increase labour productivity
One of the most encouraging findings from the Productivity Heroes research is that productivity and employment aren’t in competition.
Skilled employees make better decisions. Engaged teams are more likely to identify opportunities for improvement. Businesses that invest in training and development are often building capability that pays dividends for years to come.
Many business owners are happy to invest in equipment, technology or premises. The most productive businesses tend to apply the same mindset to their people.
How strong leadership supports business productivity
Few businesses improve by accident.
Behind most examples of sustained productivity growth is leadership that provides direction, encourages improvement and takes a long-term view.
The strongest leaders create environments where people feel empowered to contribute ideas, challenge existing ways of working and find better solutions. They recognise that meaningful productivity improvement rarely comes from one big change. Usually, it's built through a series of small improvements over time.
The lesson is simple: productivity is often a consequence of good leadership rather than a target in its own right.
How technology and innovation help businesses become more productive
Technology undoubtedly plays an important role in productivity growth.
But the most successful businesses don't adopt technology simply because it's available. They adopt it because it helps them solve problems, improve customer outcomes or work more effectively.
The same applies to innovation. Innovation isn't just about coming up with new products or services - it can involve finding better ways to deliver services, improving internal processes or identifying new opportunities in existing markets.
Technology can speed up progress, but it’s most effective when it supports a wider culture of continuous improvement.
What your business can learn from Wales' Productivity Heroes
One of the most encouraging aspects of the Productivity Heroes research is that these businesses are not confined to a single sector, region or business model.
They're succeeding because they're consistently investing in customers, developing people, strengthening leadership and embracing improvement.
For businesses looking to improve productivity, that's an important lesson.
Productivity growth rarely comes from a single initiative. More often, it's the result of many good decisions made over time.
The businesses identified by Economic Intelligence Wales show that improving productivity doesn't mean choosing between growth and jobs. Done well, it can help deliver both.
And perhaps that's the most valuable insight of all. The most productive businesses aren't necessarily working harder than everyone else.
They're simply finding ways to become better.
Taking the next step
Many productivity improvements require investment in equipment, technology, recruitment or leadership development. Access to finance can help businesses make those improvements sooner.
If you're looking to join Wales’ productivity heroes, invest in growth or take your business to the next level, we're here to help.
Find out how the Development Bank of Wales can support your ambitions. Visit our home page at www.developmentbank.wales for more information.
