Aspiring to the Standards of America’s Most Productive Companies

Best Practices Research Report

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

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Aspiring to the Standards of America’s Most Productive Companies from Profiles International. Copyright 2009 by Profiles International.
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Publisher
Profiles Research Institute
Dario Priolo, Managing Director
5205 Lake Shore Drive
Waco, Texas 76710-1732
Profiles International

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

“
Introduction to this report
We initiated this study to help us better understand the factors that drive employee
We identified the companies productivity within an organization.

that ranked highest in each In economics, “productivity” is a measure of output per unit of input. For purposes of this
category and took a closer 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
look at the practices that traded companies that we then organized into over 175 sub-industry groups.

enable them to out-produce
We then identified the companies that ranked highest in each category and took a closer
their peers. 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.


www.americasmostproductive.com

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.


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


Overview of Findings:
Attributes of America’s Most Productive Companies
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.

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

Performance-Driven Culture
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.


Building a Performance-Driven Culture

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

Employees in America’s Most Productive Companies are only half as likely
as 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
Uncertain Certain relationship between my job and my company’s goals,” which resulted in these
responses:
6% 14% 7% • 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
94% 86% 93% 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.
AMPC Non-AMPC Client • Encourage open communication between employees and their managers in
order to clarify job requirements and eliminate work that doesn’t add
sufficient value.


Building a Performance-Driven Culture

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

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
Uncertain Certain poor performance is usually not tolerated at my company,” which resulted in
these responses:
• 76% certain for AMPC
24% • 64% certain for Profiles International clients
38% 36%
• 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,
76% provide the support necessary for achieving these goals, and build a
62% 64% 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.

AMPC Non-AMPC Client


America’s Most Productive Companies: People Attributes

Effective Managers
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 effectively
Leadership: Instills trust; provides direction; delegates responsibility
Adaptability: Adjusts to circumstances; thinks creatively
Relationships: Builds personal relationships; facilitates team success
Task Management: Works efficiently; works competently
Production: Takes action; achieves results
Development of Others: Cultivates individual talents; motivates successfully
Personal Development: Displays commitment; seeks improvement

Insight to enable coaching and success
The 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.


Improving Management Effectiveness

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

Coaching is more prevalent in America’s Most Productive Companies,
but there is still significant room to improve across the board.
Uncertain Certain The third question we asked our survey participants was “My direct
supervisor coaches me to do my best,” which resulted in these responses:
39% 32% • 68% certain for Profiles International clients
45%
• 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

61% 68% communication and management styles to get the most from their
people.
55% • 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.


Improving Management Effectiveness

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

America’s Most Productive Companies are more than twice as likely
than their peers to proactively identify and develop effective front-line
managers.
Uncertain Certain
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:
34% • 66% certain for AMPC

• 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
66% that will either enable or impede their success, and then provide
ideas for building on their strengths and minimizing their weaknesses.
37% 40% • 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
AMPC Non-AMPC Client derailers.



Employee Utilization
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 adapt
Since 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.


Optimizing Employee Utilization

Q: My job makes good use of my abilities.

America’s Most Productive Companies are more likely than their peers to
make good use of their employees’ abilities.
Uncertain Certain The fifth question we asked our survey participants was “My job makes good
use of my abilities,” which resulted in these responses:
30% 20% • 66% certain for Non-AMPC

• 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

70% 80% their abilities.
66% • 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.


Optimizing Employee Utilization

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

America’s Most Productive Companies are more likely than their peers
Uncertain Certain 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:
55% 53% 48% • 47% certain for Non-AMPC

• 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.

45% 47% 52% • 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
AMPC Non-AMPC Client 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.


Maximizing Employee Effectiveness

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

Employees in America’s Most Productive Companies are nearly twice as likely
as their peers to be certain about how their job performance is judged.
Uncertain Certain
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:
20% 27% • 80% certain for AMPC
35% • 65% certain for Non-AMPC

• 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.
80% 73% • Establish clear goals with each employee, as well as a clear understanding of
65% 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.


Maximizing Employee Effectiveness

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

America’s Most Productive Companies are over 40% more likely than their
peers to provide effective training to employees.
Uncertain Certain
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:
32% 40% • 48% certain for Non-AMPC

• 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
68% 60% relevant, then it won’t be of much value to participants.
48% • 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.

AMPC Non-AMPC Client • 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.


Spurring Innovation

Q: Employees in my company are encouraged to take reasonable risks in attempts to
increase the effectiveness of the organization.

Organizations across the board still struggle with spurring innovation.
Uncertain Certain
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:
45% 54% 49%
• 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.

55% 46% 51% • 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
AMPC Non-AMPC Client who thrive under these conditions as models for selecting future managers.


Spurring Innovation

Q: My company is innovative in adapting to change.

America’s Most Productive Companies are significantly more adept at
Uncertain Certain 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:
50%
• 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.
64% 61% • Provide regular updates regarding important change programs, and
50% 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
AMPC Non-AMPC Client developments in society and how these may impact the organization in
the future.


Summary of Diagnostic Questions and Norms:
Aspiring to the standards of America’s Most Productive Companies

1. I understand the relationship between my job and 6. My company has the right number of people to do the
my company’s goals. work in my area.
AMPC = 94% Certain, Non-AMPC = 86% Certain, AMPC = 45% Certain, Non-AMPC = 47% Certain,
PI Clients = 93% Certain PI Clients = 52% Certain

2. I agree that poor performance is usually not tolerated 7. I have a clear understanding of how my job performance
at my company. is judged.

3. My direct supervisor coaches me to do my 8. My company provides training so I can perform my job at
very best. my best.

4. My company has a process to identify and develop 9. Employees in my company are encouraged to take
effective front-line managers. reasonable risks in attempts to increase the effectiveness
AMPC = 66% Certain, Non-AMPC = 37% Certain, of the organization.
PI Clients = 40% Certain AMPC = 55% Certain, Non-AMPC = 46% Certain,
PI Clients = 51% Certain
5. My job makes good use of my abilities.
AMPC = 70% Certain, Non-AMPC = 66% Certain, 10. My company is innovative in adapting to change.
PI Clients = 80% Certain AMPC = 64% Certain, Non-AMPC = 50% Certain,
PI Clients = 61% Certain

About Profiles International and Assessment Edge

Products of Interest

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.


About Profiles International and Assessment Edge

Products of Interest

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.

Profiles International and Assessment Edge – Who We Are
We help 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 Are
We serve 122 countries
around the globe with
material in 32 languages.

Contact Us
Assessment Edge
(937) 550-9580
www.assessmentedge.com


Aspiring to the Standards of America’s Most Productive Companies

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