How CEOs Can Improve Productivity When Economic Growth Slows

Economic headlines often focus on inflation, interest rates, government policy, and global uncertainty.

But beneath these external pressures sits a challenge that every CEO can directly influence: productivity.

While Australia continues to experience slowing productivity growth, the impact inside organisations is becoming increasingly visible. Margins are tightening, growth is harder to achieve, labour remains constrained, and businesses are being asked to deliver more with the resources they already have.

In a Vistage webinar, strategy and innovation expert Matt Tice, CEO of Insurgence Group, explored how Australia’s productivity slowdown is reshaping business performance. He highlighted that productivity is no longer just an economic measure, but a core driver of leadership decision-making.

In this context, productivity becomes a practical leadership responsibility—one that is shaped by how CEOs allocate attention, talent, capital, and effort across the organisation.

• Why Australia’s productivity growth has slowed compared to other advanced economies
• The difference between productivity and efficiency—and why leaders often confuse the two
• How leadership, culture, and decision-making directly shape organisational performance
• How innovation, technology, and AI can improve productivity when applied to specific constraints
• Why identifying bottlenecks and constraints is often the fastest path to performance improvement
• How effective organisations allocate capital, talent, and attention to higher-value work
• Why productivity is ultimately a leadership challenge rather than an operational one

Australia’s productivity slowdown is not just a macroeconomic trend—it is showing up inside organisations as tighter margins, constrained hiring, and slower execution.

As Matt Tice highlighted, when productivity growth stalls at a national level, businesses feel it through increased pressure to deliver results without equivalent increases in resources.

For CEOs, the central question becomes:
How do you continue to grow when the traditional inputs to growth—people, time, and capital—are constrained?

The answer is not simply effort or efficiency gains, but better deployment of existing resources.

Productivity vs efficiency: a critical distinction

A central theme from the webinar is the confusion between productivity and efficiency.

Many organisations focus heavily on efficiency: reducing cost, improving utilisation, and streamlining processes.

But efficiency alone can be misleading.

• Efficiency = how work is performed
• Productivity = whether the right work is being done

A highly efficient organisation can still underperform if effort is directed toward low-value activities. Productivity shifts the focus from activity to impact.

This reframes leadership priorities around value creation rather than operational busyness.

Most organisations don’t suffer from a lack of effort—they suffer from a small number of constraints limiting flow, speed, or decision-making.

Improving productivity rarely comes from broad, incremental improvements everywhere. It comes from identifying and removing the few bottlenecks that disproportionately limit performance.

The challenge for leaders is focus: not doing more, but isolating what matters most.

External perspectives—such as structured peer advisory groups—can help leaders surface blind spots and clarify where constraints actually sit.

While there is significant optimism surrounding the productivity benefits of artificial intelligence, Matt encouraged leaders to think carefully about where technology is applied.

Technology alone does not create productivity. AI can improve productivity—but only when it is used in the right way. Leaders must ensure that investments in AI and digital capability are focused on the areas that create the greatest organisational impact.

AI is often positioned as a general productivity solution, but its impact depends entirely on application.

As discussed in the webinar, AI creates real value when it is applied directly to organisational constraints such as:

• slow decision-making
• manual administration
• workflow delays
• process bottlenecks

Used well, AI increases throughput, reduces friction, and supports better decision-making. Used without focus, it risks adding complexity rather than removing it.

Leadership and culture drive productivity outcomes

When discussion turned to implementation, culture emerged as one of the most important factors While tools and processes matter, culture determines whether productivity gains are sustained.

Organisations that consistently improve productivity tend to share common traits:

• openness to change
• accountability for outcomes
• curiosity about better ways of working
• willingness to challenge existing processes

Leaders play a central role in setting this tone—particularly in encouraging teams to rethink how work is done, not just automate what already exists.

As Matt noted during the discussion, organisations must move beyond simply automating existing processes and begin reimagining how work should be done.

Productivity is a resource allocation problem

At its core, productivity is a leadership discipline rooted in allocation.

Every organisation must decide how to deploy finite resources—time, capital, talent, and attention.

High-performing organisations regularly reassess:

• what is creating value
• what is consuming resources without return
• what should be stopped, reduced, or redesigned

The most significant productivity gains often come not from doing more, but from choosing differently.

The value of external perspective in complex decisions

Because productivity challenges are complex and context-dependent, leaders benefit from structured external perspective.

Peer environments help CEOs:

• test assumptions
• challenge blind spots
• improve decision quality
• maintain accountability under pressure

The strongest leaders are not those with all the answers, but those who consistently refine their thinking through better questions and broader input.

Looking beyond the headlines

Australia’s productivity challenge is widely discussed at a national level, but its real impact is felt inside organisations.

For CEOs, the opportunity lies in improving how effectively resources are allocated, constraints are removed, and focus is maintained on high-value work.

Those who can sharpen prioritisation, strengthen decision-making, and align resources to impact are best positioned to perform in a more constrained environment.

To hear Matt Tice expand on these ideas in full, access the on-demand webinar.