Aspiring To The Standards Of America\'s Most Productive Companies

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Best Practices Research Report

Aspiring to the Standards of “America’s Most Productive Companies”



Aspiring to the Standards of America’s Most Productive Companies from Profiles International. Copyright 2009 by Profiles International.

Printed and bound in the United States of America. All rights reserved. No part of the report may be reproduced in any form or by any

electronic or mechanical means including information storage and retrieval systems without written permission from the publisher.

Publisher

Profiles Research Institute

Dario Priolo, Managing Director

5205 Lake Shore Drive

Waco, Texas 76710-1732

Profiles International

(800) 960-9612

www.profilesinternational.com

www.americasmostproductive.com

Acknowledgements

CEO, Co-founder, Profiles International: Jim Sirbasku

President, Co-founder, Profiles International: Bud Haney

Editor-in-Chief: Dario Priolo

Managing Editor: Carrie D. Martinez

Assistant Editor: Natalie Hefner

Creative Director: Kelley Taylor

Creative Assistants: Megan Bullard

Aspiring to the Standards of America’s Most Productive Companies | 2


We initiated this study to help us better understand the factors that drive employee productivity within an organization.

In economics, “productivity” is a measure of output per unit of input. For purposes of this study, we defined labor productivity in terms of revenue produced per full-time employee. Calculating this required us to analyze financial data from over 1,600 publicly traded companies that we then organized into over 175 sub-industry groups.

We then identified the companies that ranked highest in each category and took a closer look at the practices that enable them to out-produce their peers. By understanding these practices, we hope to educate ourselves and our clients about the practices that can help them run more efficiently and become more competitive in the marketplace.

This report presents our findings. It is divided into 2 parts:

1. A synthesis and discussion of the top five people factors that drive productivity.

2. A deeper dive into each of these factors to identify some specific management practices and recommendations for maximizing productivity.

Introduction to this report


We identified the companies

that ranked highest in each

category and took a closer

look at the practices that

enable them to out-produce

their peers.

“

”


AMPC Study Microsite

This report builds on our “America’s Most Productive Companies” research for 2009.

To learn more about this project, which is the most comprehensive study of human capital productivity of its kind, please visit www.americasmostproductive.com.

On this web site you will find:

• Comprehensive rankings

• Industry rankings

• Description of Methodology

You will also be able to download the reports that are listed on the next page.



http://www.americasmostproductive.com/



AMPC Study Microsite

• Reports for download

- Automotive

- Business Services

- Chemicals

- Construction and Real Estate

- Consumer Products

- Electronics Manufacturing

- Financial Services

- Healthcare Services

- Industrial Manufacturing

- Insurance

- Media

- Medical & Pharmaceutical

- Natural Resources

- Software

- Telecomm Services

- Transportation

- Utilities

- Summary Report


http://www.americasmostproductive.com/select-an-industry-report.php



















Once we finished gathering and analyzing the data that allowed us to rank America’s Most Productive Companies, we completed some follow-up research on a number of the most productive companies. This consisted of an online literature review and interviews with select executives. Our follow-up research helped us identify a number of best practices that we believe explain outstanding productivity. These ten key attributes can be further categorized into 5 “People Attributes” and 5 “Strategic and Operational Attributes.” We list these below:

People Attributes

1. Performance-driven culture

2. Effective managers

3. High employee utilization

4. High employee effectiveness

5. Encouragement of innovation

Strategic and Operational Attributes

1. Technological sophistication

2. Financial sophistication

3. Operational sophistication

4. Effective distribution channels

5. Marketing and brand sophistication

We then conducted a series of surveys based on the people-related attributes in order to gain further insight into the practices that separate the “Most Productive” companies from their peers. We will present this data and discuss these findings throughout the next several pages of this report.

Overview of Findings:

Attributes of America’s Most Productive Companies



Talking the talk and walking the walk

Organizational culture is defined by the attitudes, beliefs and values of an organization. It is an important driver of employee behavior, particularly when employees are required to act on their own initiative in a way that is consistent with a company’s objectives, culture and values.

Although a strong organizational culture is generally considered a positive attribute, it is not sufficient to enhance productivity on its own.

A large number of America’s Most Productive Companies have built true performance-driven cultures in which the entire workforce focuses its efforts on achieving the results most important to the organization. In such environments, a strong culture helps the firm operate like a well-oiled machine, cruising along with outstanding execution and only occasionally requiring minor adjustments.

Define the model and select people who fit

The leaders of America’s Most Productive Companies tend to have a consistent, shared understanding of both the company’s current culture and its future culture. These leaders tend to promote individual initiative and high levels of teamwork, both of which are essential ingredients for achieving results.

Additionally, these leaders are likely to have defined the types of people who fit the company culture. This helps them identify precisely the people for whom they are looking, and then present their culture and values to potential hires in order to evaluate fit. They have few qualms about saying “no” to a highly qualified candidate who does not fit into the company culture.

Performance-Driven Culture

Aspiring to the Standards of America’s Most Productive Companies: People Attributes



Q: I understand the relationship between my job and my company’s goals.

Building a Performance-Driven Culture

94% 86% 93%

6% 14% 7%

AMPC Non-AMPC Client

Uncertain Certain

Employees in America’s Most Productive Companies are only half as likelyas their peers to be uncertain about how their jobs support their company’s key goals.

The first question we asked our survey participants was “I understand the relationship between my job and my company’s goals,” which resulted in these responses:

• 94% certain for AMPC• 86% certain for Non-AMPC• 93% certain for Profiles International clients

Actions for Rising to the AMPC Standard• Get crystal clear about the activities—and the time you need to spend

engaged in those activities—required for the organization to achieve its overall objectives.

• Translate these activities into job and performance requirements for your managers and their people. Be sure to get everyone’s buy-in along the way.

• Create tools to help your managers communicate these requirements and track progress toward these goals.

• Seek direct input from front-line employees in the form of employee surveys and 360° management assessments to determine if the message is getting through.

• Encourage open communication between employees and their managers in order to clarify job requirements and eliminate work that doesn’t add sufficient value.



Q: I agree that poor performance is usually not tolerated at my company.

Building a Performance-Driven Culture

76%62% 64%

24%38% 36%


Uncertain Certain

America’s Most Productive Companies are over 50% less likely than their peers to tolerate poor performance.

The second question we asked our survey participants was “I agree that poor performance is usually not tolerated at my company,” which resulted in these responses:


Actions for Rising to the AMPC Standard• Leadership must start by sending a clear message that poor performance

is not acceptable in the organization. This often means removing people who consistently underperform.

• Leadership must establish reasonable goals for its managers and people, provide the support necessary for achieving these goals, and build a culture of “managing by the numbers.”

• The organization must identify managers and leaders who have the core behaviors needed to support a performance-driven culture. Then commit to developing them to manage by the numbers and coaching their people to achieve results.



Effective manager = Successful manager

An “effective” manager is more than a supervisor. He or she takes responsibility for ensuring that an individual succeeds and that the team, department or business unit achieves its expected results. This is similar to the way successful coaches develop players in order to win games and championships.

Similar to successful athletes, successful managers require both talent and skill. Managerial skills can be developed through training, mentoring and experience. But if a manager is void of natural talent, then the odds that he will be successful diminish significantly.

The Most Productive Companies are typically more proactive than their peers when it comes to identifying and developing effective managers. Common managerial success traits include:

Communication: Listens to others; processes information; communicates effectivelyLeadership: Instills trust; provides direction; delegates responsibilityAdaptability: Adjusts to circumstances; thinks creativelyRelationships: Builds personal relationships; facilitates team successTask Management: Works efficiently; works competentlyProduction: Takes action; achieves resultsDevelopment of Others: Cultivates individual talents; motivates successfullyPersonal Development: Displays commitment; seeks improvement

Insight to enable coaching and successThe Most Productive Companies also give their managers the information and tools they need to understand the capabilities and styles of their teams. This gives managers a solid foundation for more effective coaching relationships.

Effective Managers

America’s Most Productive Companies: People Attributes



Q: My direct supervisor coaches me to do my very best.

Improving Management Effectiveness

61% 55%68%

39% 45%32%


Uncertain Certain

Coaching is more prevalent in America’s Most Productive Companies, but there is still significant room to improve across the board.

The third question we asked our survey participants was “My direct supervisor coaches me to do my best,” which resulted in these responses:


Actions for Rising to the AMPC Standard• Use assessments to identify employees who demonstrate the

behaviors and interests that will make them successful managers.

• Help managers understand the core behaviors, capabilities and preferences of the people they manage so that they can adapt their communication and management styles to get the most from their people.

• Help managers develop the mindset that they will be more successful if the people they manage succeed. This helps managers become invested in the success of each individual.

• Develop the fundamental coaching skills of your managers, and developing a culture of coaching.



Q: My company has a process to identify and develop effective front-line

managers.

Improving Management Effectiveness

66%

37% 40%

34%

63% 60%


Uncertain Certain

America’s Most Productive Companies are more than twice as likelythan their peers to proactively identify and develop effective front-line managers.

The fourth question we asked our survey participants was “My company has a process to identify and develop effective front-line managers,” which resulted in these responses:


Actions for Rising to the AMPC Standard• Use assessments to identify employees who demonstrate the

behaviors and interests that will make them successful managers.

• Help these prospective managers understand their core behaviors that will either enable or impede their success, and then provide ideas for building on their strengths and minimizing their weaknesses.

• Give these people the opportunity to develop their managerial skills by managing special projects and smaller teams. Gradually give them more responsibility as they gain skill and experience.

• Provide 360° degree feedback from peers and subordinates to identify and address potential managerial blind spots and career derailers.



Establish clarity to run lean

Simply put, America’s Most Productive Companies do more with fewer people.

It starts at the top with a clear strategy that cascades into a properly designed organization with jobs that execute the strategy efficiently. All jobs have clear descriptions and goals so that everyone knows exactly what needs to get done and how. This ensures, for example, that three people are never doing the work of two.

America’s Most Productive Companies closely monitor and benchmark personnel expenses. They review requests to create new jobs with intense scrutiny and a healthy level of skepticism. They expect people to arrive at work a little earlier and leave a little later, and they reassess priorities to determine what work is most important and what activities can be streamlined because they don’t add sufficient value.

In a traditional sense, they are more open to investing in technology and training if it reduces and/or slows the growth of headcount.

Flexibility to adaptSince many of these organizations run so lean, they are usually more flexible than their peers in handling special circumstances such as special projects, peak demand periods and unplanned employee absences. Full-time employees are cross-trained to cover for one another in times of short-term need. The Most Productive Companies cultivate good sources of contract and temporary labor, and cultivate good practices that ensure that they deliver what is expected.

Overall, these companies use superior talent management practices to easily identify potential needs for additional people. And they have efficient selection and on-boarding practices so that new people become productive in a short amount of time.

Employee Utilization




Q: My job makes good use of my abilities.

Optimizing Employee Utilization

70% 66%80%

30% 34%20%


Uncertain Certain

America’s Most Productive Companies are more likely than their peers to make good use of their employees’ abilities.

The fifth question we asked our survey participants was “My job makes good use of my abilities,” which resulted in these responses:


Actions for Rising to the AMPC Standard• Know the core behaviors, capabilities and interests of your employees, and

do your best to place them in jobs that fit them best.

• Survey your employees to identify how the organization might better use their abilities.

• Identify opportunities to leverage these strengths, interests and capabilities on special assignments, projects or teams.

• Ensure that employees know when positions open up, and encourage them to apply if the position will make the best use of their abilities and if the position is a good fit.

• Gather 360° degree feedback on managers to identify those who consistently hold their people back.



Q: My company has the right number of people to do the work in my area.

Optimizing Employee Utilization

45% 47% 52%

55% 53% 48%


Uncertain CertainAmerica’s Most Productive Companies are more likely than their peers to run lean and work their people harder.

The sixth question we asked our survey participants was “My company has the right number of people to do the work in my area,” which resulted in these responses:


Actions for Rising to the AMPC Standard• Take a strategic view of staffing. Think carefully about the results that the

organization needs to achieve and the departmental goals needed to drive the results. Only then can you really assess the actual work needed to achieve the goals and the people necessary to do the work.

• Monitor employee performance and satisfaction to determine whether employees really are overworked. High levels of absenteeism, injury, excessive turnover, and missed performance targets can be key indicators of sub-optimal staffing levels. Pay close attention to exit interviews.

• Consider temporary staffing or contract labor before adding permanent staff. This will help you determine more precisely what permanent staff you will need and give you more flexibility as you make your decision.



Employee Effectiveness


Set clear goals + inspect what you expect

Running lean is not the only thing a company must do in order to run well. Goals must be achieved at the employee level so that results are observed at the organizational level. In the Most Productive Companies, strategic objectives and goals are clearly defined at all levels of the company, and performance measures are closely aligned with strategy.

As a result, employees focus on the aspects of their jobs that matter most to the organization.

Right people in the right jobs…

Additionally, the Most Productive Companies keep always before them a clear picture of the type of employee who has the best chance of succeeding in the role. They consider an employee’s fit with the job, the team and even the manager. And they use the characteristics displayed by high-performing employees in each role as a model for prospective hires.

…with the experience, skills and equipment to deliver

Although critically important, “fit” alone is not sufficient to ensure that an employee will be effective in a job—experience and skills also factor largely into the formula. The Most Productive Companies are more likely than their peers to identify the particular experience and skills needed for success, and then provide specific training to help employees close the ability gap.

The fact is that these companies are more likely than their peers to employ techniques that involve ergonomic design and worker comfort. This often reduces workplace injury and improves employee satisfaction, all of which enhance effectiveness and productivity.



Q: I have a clear understanding of how my job performance is judged.

Maximizing Employee Effectiveness

80%65% 73%

20%35% 27%


Uncertain CertainEmployees in America’s Most Productive Companies are nearly twice as likely as their peers to be certain about how their job performance is judged.

The seventh question we asked our survey participants was “I have a clear understanding of how my job performance is judged,” which resulted in these responses:


Actions for Rising to the AMPC Standard• Develop a mindset that employee performance management is a continual

process between an employee and his or her manager, not an annual event for determining a minuscule base-pay increase.

• Establish clear goals with each employee, as well as a clear understanding of how his or her efforts and achievements contribute to the organization’s objectives and results.

• Ensure that managers use these goals to facilitate regular dialogue with employees to help them improve their performance and hold them accountable for results.

• When employees underperform, diagnose the issue’s root cause and create a plan to get back on track.

• Recognize employees publically when they overperform.



My company provides training so I can perform my job at my best.

Maximizing Employee Effectiveness

68%48%

60%

32%52%

40%


Uncertain CertainAmerica’s Most Productive Companies are over 40% more likely than their peers to provide effective training to employees.

The eighth question we asked our survey participants was “My company provides training so I can perform at my best,” which resulted in these responses:


Actions for Rising to the AMPC Standard• Use objective assessments to identify and prioritize the developmental needs

of individual employees.

• Avoid a “one-size-fits-all” approach to training and development, such as forcing all employees to go through the same program. If the training isn’t relevant, then it won’t be of much value to participants.

• Avoid event-based training, such as a two-day live class, that has little or no back-end reinforcement activity or accountability for real sustained change.

• Consider innovative developmental approaches such as e-learning, virtual classrooms and mentoring. Be mindful that each serves a different purpose and these must be aligned with the individual’s needs.

• Inspect what you expect. If you make a training investment in an individual, make sure it is tied to a specific goal. Monitor progress toward that goal and hold the individual accountable for improvement.



Innovation

A series of singles or a home run?

The word “innovation” often evokes images of secret laboratories, major breakthroughs and home-run products. Most productivity gains, however, are the result of incremental improvements to—and fine tuning of—existing business processes. Although the home runs grab the headlines, the singles, doubles and walks can add up to significant gains over time with much lower investment.

The Most Productive Companies are likely to encourage an exchange of ideas among employees, managers and leaders to make the business more competitive. When employees and managers have open lines of communication, employees become more invested in the organization’s well-being.

Actions speak louder than words

Open communication and a spirit of teamwork are essential to identifying innovation opportunities. Engagement and productivity actually suffer, however, when the organization sets expectations and then fails to deliver on recommendations.

The Most Productive Companies typically do a better job of putting ideas into action than their peers. This is possible because they run with fewer employees and continually innovate. As we mentioned before, they typically add employees only when absolutely necessary.

Management is attuned to improvement opportunities, and leadership makes investment decisions quickly when a compelling case can be made for investing in new opportunities.

In short, innovation is everyone’s business, not just that of the R&D department.




Q: Employees in my company are encouraged to take reasonable risks in attempts to

increase the effectiveness of the organization.

Spurring Innovation

55% 46% 51%

45% 54% 49%


Uncertain CertainOrganizations across the board still struggle with spurring innovation.

The ninth question we asked our survey participants was “Employees in my company are encouraged to take reasonable risks in attempts to increase the effectiveness of the organization,” which resulted in these responses:


Actions for Rising to the AMPC Standard• Using effective internal communication strategies, help managers and

employees understand the key strategic objectives of the organization. Limit these objectives to 5-7 very concisely defined statements. Let employees know that you want them to be part of the solution and that you value their input.

• Leverage the power of social networks to facilitate open dialogue and the exchange of ideas among all employees.

• Use 360° assessments to determine how receptive your current managers are to operating under these “open dialogue” conditions, and identify how familiar they and their employees are with the key objectives.

• Foster a culture of trust, openness and prudent risk-taking. Use managers who thrive under these conditions as models for selecting future managers.



Q: My company is innovative in adapting to change.

Spurring Innovation

64%50%

61%

36%50%

39%


Uncertain CertainAmerica’s Most Productive Companies are significantly more adept at responding to change than their peers, but there is still room to improve.

The final question we asked our survey participants was “My company is innovative in adapting to change,” which resulted in these responses:


Actions for Rising to the AMPC Standard• Obtain timely and trustworthy information that indicates if, when and

what kind of change is necessary.

• Build a culture that is focused on action and results as opposed to command, control and complacency.

• Provide regular updates regarding important change programs, and publicize examples of the small things that employees have done—or can do—to help the company adapt to change.

• Select employees who are comfortable with and thrive on change, and communicate the expectation that employees who don’t continually evolve will be left behind.

• Get ahead of the curve by encouraging employees to learn about new developments in society and how these may impact the organization in the future.



1. I understand the relationship between my job and my company’s goals.AMPC = 94% Certain, Non-AMPC = 86% Certain, PI Clients = 93% Certain

2. I agree that poor performance is usually not tolerated at my company.AMPC = 76% Certain, Non-AMPC = 62% Certain, PI Clients = 64% Certain

3. My direct supervisor coaches me to do my very best.AMPC = 61% Certain, Non-AMPC = 55% Certain, PI Clients = 68% Certain

4. My company has a process to identify and develop effective front-line managers.AMPC = 66% Certain, Non-AMPC = 37% Certain, PI Clients = 40% Certain

5. My job makes good use of my abilities.AMPC = 70% Certain, Non-AMPC = 66% Certain, PI Clients = 80% Certain

6. My company has the right number of people to do the work in my area.AMPC = 45% Certain, Non-AMPC = 47% Certain, PI Clients = 52% Certain

7. I have a clear understanding of how my job performance is judged.AMPC = 80% Certain, Non-AMPC = 65% Certain, PI Clients = 73% Certain

8. My company provides training so I can perform my job at my best.AMPC = 68% Certain, Non-AMPC = 48% Certain, PI Clients = 60% Certain

9. Employees in my company are encouraged to take reasonable risks in attempts to increase the effectiveness of the organization.AMPC = 55% Certain, Non-AMPC = 46% Certain, PI Clients = 51% Certain

10. My company is innovative in adapting to change.AMPC = 64% Certain, Non-AMPC = 50% Certain, PI Clients = 61% Certain

Summary of Diagnostic Questions and Norms:

Aspiring to the standards of America’s Most Productive Companies



PXT – The ProfileXT® is a ‘total person’ assessment that has a myriad of uses. It measures job-related qualities that make a person productive—thinking and reasoning style, behavioral traits and occupational interests. These qualities in an individual directly affect her productivity, and the productivity of her entire team. An added benefit? The ProfileXT provides 10 reports from one fifty-minute assessment: individual report, placement report, succession planning report, candidate matching report, coaching report, job analysis report, sales placement report, sales management report, summary reports, and graph reports.

CheckPoint Management System combines direct feedback from direct reports, peers, supervisors, and customers, and includes a personalized program for developing specific leadership skills based on that feedback. This assessment process highlights a manager’s job performance in 8 skill clusters: leadership, communication, personal development, development of others, production, task management, relationships, and adaptability. The CheckPoint 360° uncovers the following productivity killers: ineffective management practices, poor communication, inadequate leadership skills, distrust of management, inability to delegate, low motivation, lack of commitment, low performance standards, and workplace conflicts.

Products of Interest

About Profiles International


http://www.profilesinternational.com/product_profilext.aspx

http://www.profilesinternational.com/product_checkpoint360.aspx


Another key to driving performance is having a consistent company message. CSP – Customer Service Profile measures key characteristics of exceptional customer service. How much easier is it to drive performance when the people engaging the customer on a daily basis are all on the same page? The CSP looks at our current and future employees’ definitions of good customer service, while at the same time showing us where they align (or not) with our company’s perspective.

Superior talent management practices can help managers easily identify a potential need for additional people or for better use of existing resources. With efficient selection and on-boarding practices, both new people and incumbents become more productive in a short amount of time. SOSII – Step One Survey II® can help give new employees the head start they need from day one. By making sure that prospective applicants ‘fit’ our corporate culture before they ever join the team, we can know in advance how to assimilate a person into a work environment in the optimum amount of time. Insight into an applicant’s work ethic, honesty, integrity, propensity for substance abuse, and attitudes on theft (including property, data and the most expensive commodity, time), can give a much-needed preview into how well this person will mesh with a company’s current culture and climate.

Profiles WorkForce Compatibility is a powerful tool that measures critical workplace compatibility information between a manager (executive, director, supervisor, team leader) and his employees. PWC is used to increase productivity, identify and close compatibility gaps between manager and employee, improve communications between manager and employee, raise the level of employee engagement, and reduce employee turnover.

Products of Interest

About Profiles International


http://www.profilesinternational.com/product_csp.aspx

http://www.profilesinternational.com/product_csp.aspx

http://www.profilesinternational.com/product_sosii.aspx

http://www.profilesinternational.com/product_workforce_compatibility.aspx


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Profiles International helps organizations worldwide create high-performing workforces.

Through our comprehensive employment assessments and innovative talent management solutions, our clients gain a competitive advantage by selecting the right people and managing them to their full potential.

Where We AreProfiles serves 122 countries around the globe and has material in 32 languages.

(800) 960-9612

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Aspiring To The Standards Of America\'s Most Productive Companies

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