Imagine how much more competitive your company would be if its employees got as much done by 10 am Thursday as others get done all week? It’s this potential to outperform rivals with productive power that’s inspiring pioneering companies to manage their human capital as carefully as their financial capital.
Bain & Company Organization experts Michael Mankins and Eric Garton show us why and how productive companies win in TIME | TALENT | ENERGY: Overcome Organizational Drag and Unleash Your Team’s Productive Power (Harvard Business Review Press; March 7, 2017). CEO praise below and video here. Mankins has been interviewed recently in Quartz, Fast Company and The Wall Street Journal.
Netflix, LinkedIn, Ford, Dell, Nordstrom, Starbucks, Pixar, SpaceX, Spotify, IKEA, Airbnb, and Google are among the companies that have effectively managed the three components of human capital:
Time: The average company loses more than 25% of its productive power to organizational drag”—ways of working that waste time and prevent people from getting things done. To start reducing it, go through your team’s calendar, ask yourself how many meetings really need to occur and how many attendees are truly essential—and then give back the time.
Talent: Contrary to popular belief, top-performing companies don’t have better talent than their competitors; they’re better at deploying, teaming, and leading the talent they have. They take an “intentionally nonegalitarian” approach to distributing their all-stars, ensuring that 95% of the talent in mission-critical roles is A-level quality.
Energy: An engaged employee is 44% more productive than a satisfied worker, and an employee who feels inspired at work is nearly 125% more productive than a satisfied one. The companies that inspire more employees perform better than the rest.
To study the impact of human capital management on an organization’s productive power, Bain partnered with the Economist Intelligence Unit and surveyed over 300 executives from large companies across 12 industry sectors worldwide. They found that the best managers of time, talent, and energy—the top quartile of their research sample—are 40% more productive than the rest and consequently have profit margins that are 30%-50% higher than industry averages. And this difference compounds every year; over a decade, they can produce 30 times more than the rest, with the same number of employees.
The bottom line: organizations that don’t waste people’s time, use their talent wisely and inspire them every day can create a virtuous circle of productivity and innovation—and a sizable advantage over competitors that will widen year after year.
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