In the Delivering a step change in organisational productivity: Findings from the Australian Oil & Gas Productivity and Innovation Survey report, Ernst & Young said organisations which put effort into innovation were a whopping 40 times more likely to deliver productivity increases than their non-innovating counterparts.

Collaboration with peer firms and competitive positioning were the next most important factors linked to improved organisational productivity, the study found.

Ernst & Young Oceania oil and gas advisory leader Bradley Farrell said one of the most surprising findings from the study was that organisational productivity in the sector was not even being measured effectively, with 55% of respondents not measuring organisational productivity.

“This is surprising. There is much debate as to the root causes of Australia’s productivity problem but everyone agrees that productivity matters, yet not everyone is measuring it,” he said.

“Those organisations without explicit productivity measurement will struggle to identify and deliver productivity improvements.”

The study is based on a survey of more than 80 Australian oil and gas companies and 14 executive level interviews.

The findings were drawn from an analysis of more than 300 variables impacting productivity.

Key findings from the study include:

• Productivity is core to growth – high growth companies tend to have a clearly defined productivity agenda and a set of targets to deliver profitable growth, relative to their low growth peers
• Organisation productivity is not being measured effectively – 55% of respondents are not measuring organisational productivity
• Innovation is the number one driver of organisational productivity – organisations that innovate are 40 times more likely to have increased productivity increases
• Organisations that improve their competitive positioning increase the odds of a productivity increase by nearly 15 times
• Collaboration with another firm in the same line of business is the third most important driver of organisational productivity, with each additional collaboration increasing by up to four times the odds of seeing productivity gains.

Interestingly, the study found obstacles were driving innovation within the sector but governments should not try to provide barriers to stimulate innovation and productivity.

“The obstacles cited are significant barriers to the overall development and competitiveness of the industry,” Farrell said.

“Governments and regulators need to play their part and address these barriers.”