Why Em­ploy­ees at Ap­ple and Google are More Pro­duc­tive

The Star (St. Lucia) - - BUSINESS - By Stephanie Vozza -- loop.com

Com­pa­nies like Ap­ple, Net­flix, Google, and Dell are 40 per­cent more pro­duc­tive than the av­er­age com­pany, ac­cord­ing to re­search from the lead­er­ship con­sult­ing firm Bain & Com­pany. You might think that it’s be­cause th­ese com­pa­nies at­tract top-tier em­ploy­ees - high per­form­ers who are nat­u­rally gifted at pro­duc­tiv­ity - but that’s not the case, says Bain & Com­pany part­ner Michael Mank­ins.

“Our re­search found that th­ese com­pa­nies have 16 per­cent star play­ers, while other com­pa­nies have 15 per­cent,” he says. “They start with about the same mix of star play­ers, but they are able to pro­duce dra­mat­i­cally more out­put.”

It’s what they do with th­ese high per­form­ers. Ex­ec­u­tives from large com­pa­nies across 12 in­dus­try sec­tors world­wide said three com­po­nents of hu­man cap­i­tal im­pact pro­duc­tiv­ity more than any­thing else: time, tal­ent, and en­ergy. And the top quar­tile or­ga­nized its busi­ness pro­cesses in a way that they’re 40 per­cent more pro­duc­tive than the rest and con­se­quently have profit mar­gins that are 30-50 per­cent higher than in­dus­try av­er­ages.

“They get more done by 10 a.m. Thurs­day morn­ing than the oth­ers do in a week, but they don’t stop work­ing,” says Mank­ins. “This dif­fer­ence com­pounds ev­ery year; over a decade, they can pro­duce 30 times more than the rest, with the same num­ber of em­ploy­ees.”

Mank­ins ex­plores their meth­ods and mind­sets in his new book TIME | TAL­ENT | EN­ERGY: Over­come Or­ga­ni­za­tional Drag and Un­leash Your Team’s Pro­duc­tive Power. Here’s what he found:

Group­ing A Play­ers

The av­er­age com­pany fol­lows a method of un­in­ten­tional egal­i­tar­i­an­ism, spread­ing star tal­ent across all of the roles, says Mank­ins. Com­pa­nies like Google and Ap­ple, how­ever, fol­low an in­ten­tion­ally none­gal­i­tar­ian method. “They select a hand­ful of roles that are busi­ness crit­i­cal, af­fect­ing the suc­cess of the com­pany’s strat­egy and ex­e­cu­tion, and they fill 95% of th­ese roles with A-level qual­ity,” says Mank­ins. “The rest of the roles have fewer star play­ers.”

An ex­am­ple of how this can play out is Ap­ple and Mi­crosoft in early 2000s, says Mank­ins. “It took 600 Ap­ple engi­neers fewer than two years to de­velop, de­bug, and de­ploy iOS 10,” he says. “Con­trast that with 10,000 engi­neers at Mi­crosoft that took more than five years to de­velop, de­but, and ul­ti­mately re­tract Vista. The dif­fer­ence is in the way th­ese com­pa­nies chose to con­struct their teams.”

Ap­ple used all-star teams be­cause iOS 10 was a mis­sion crit­i­cal ini­tia­tive. In ad­di­tion, re­wards were ap­plied to team per­for­mance; no one per­son on the team could re­ceive an ex­cep­tional per­for­mance ap­praisal un­less the en­tire team did. On the other hand, Mi­crosoft used a stacked rank­ing where 20% of ev­ery team got an ex­cep­tional re­view, and com­pen­sa­tion was en­tirely based on in­di­vid­ual per­for­mance. Mi­crosoft even­tu­ally abol­ished stacked rank­ing, says Mank­ins.

“For ev­ery mem­ber of the team that is not a star player, pro­duc­tiv­ity de­clines,” he says. “If 100% of the team is star play­ers, pro­duc­tiv­ity is ex­tremely high.”

Elim­i­nat­ing Or­ga­ni­za­tional Drag

The av­er­age com­pany loses more than 25% of its pro­duc­tive power to or­ga­ni­za­tional drag, pro­cesses that waste time and pre­vent peo­ple from get­ting things done, says Mank­ins. This often hap­pens as a com­pany grows, as the ten­dency is to put pro­cesses in place to re­place judg­ment. Re­search pub­lished in Har­vard Busi­ness Re­view found that or­ga­ni­za­tional drag costs the econ­omy more than $3 tril­lion each year in lost out­put.

The most com­mon pro­cesses re­late to ex­pense man­age­ment, says Mank­ins. “At most com­pa­nies, there are spend­ing lim­its and au­dits, and em­ploy­ees are tracked,” he says. “At Net­flix, how­ever, there is no ex­pense pol­icy. The only pol­icy is, ‘Act in the best in­ter­est of Net­flix.’ The com­pany is telling em­ploy­ees, ‘We as­sume you are not here to rip off the com­pany, and we’re not go­ing to put in place pro­cesses that con­sume hu­man cap­i­tal, waste time, and zap en­ergy.’ They tell em­ploy­ees to as­sume their best judg­ment, and they can be more pro­duc­tive when not held back.”

In­spir­ing Lead­ers

An en­gaged em­ployee is 44 per­cent more pro­duc­tive than a sat­is­fied worker, but an em­ployee who feels in­spired at work is nearly 125 per­cent more pro­duc­tive than a sat­is­fied one, says Mank­ins. The com­pa­nies that in­spire more em­ploy­ees per­form bet­ter than the rest.

“We’ve been taught that you’re ei­ther a Gen­eral Pat­ton and can in­spire oth­ers or you’re not, but this is not true,” he says. “In­spi­ra­tional lead­er­ship can be taught. Com­pa­nies that rec­og­nize that and in­vest in mak­ing it hap­pen cre­ate mean­ing­ful im­pact on the pro­duc­tiv­ity of their com­pany.”

Dell Tech­nolo­gies rec­og­nized the pro­duc­tiv­ity dif­fer­ence be­tween in­spired and av­er­age teams, says Mank­ins. “Sales teams led by an in­spir­ing leader are 6 per­cent more pro­duc­tive than those that have an av­er­age leader. If you ex­trap­o­late that 6 per­cent it ac­counts for an ex­tra $1 bil­lion in an­nual rev­enue. Con­sider what [poor lead­er­ship] is cost­ing your com­pany.”

In­di­vid­ual tal­ent is great, but it can’t turn com­pa­nies into stars, Mank­ins says. “We could try ev­ery­thing we want to em­u­late the habits of highly ef­fec­tive in­di­vid­u­als, but it doesn’t mat­ter what we do in­di­vid­u­ally if it runs counter to how an or­ga­ni­za­tion gets work done,” says Mank­ins. “Top-per­form­ing com­pa­nies fo­cus on col­lec­tive in­stead of in­di­vid­ual.”

Newspapers in English

Newspapers from Saint Lucia

© PressReader. All rights reserved.