At Investors in People, we call these organisations the Outperformers. When we redesigned our framework for 2016, we decided to focus on them. What makes them tick? And how can others become Outperformers themselves?
In essence, we wanted to find out what lies behind their success and if it’s a magic formula, how can we bottle it? We decided to test the hypothesis that success isn’t a secret shared by an elite few – it’s a science. And now we’ve found the formula.
What’s behind success: Secrets vs Science
We tested a set of management principles common to high performing firms to find out whether a focus on these principles could really make a difference to performance. The analysis found that six factors were statistically significant in explaining improvements in performance and efficiency:
- Strong and inspiring leaders
- Having a set of strong values
- Recognising and rewarding performance
- Structuring work
- Delivering continuous improvement
- Adoption of sustainable practices
Breaking this down for the real world, we sought to examine how these factors could make a difference to real-life organisations. Looking at the relationship between efficiency (E) and people management (PM), we discovered The Power of Three.
E = PM3
As easy as 1,2,3?
Only if you get it right. In our full-length report, “The impact of investing in people”, we outline areas which offer the greatest returns for your business – broken down by size and sector – telling you exactly where to focus.
Key findings highlight employers that adopt more sustainable practices, responding flexibly to change, whilst planning for the future, will drive the most improvement in their performance.
The study, based on research amongst 8,750 businesses and ONS data, reveals that the health and social care industry has the most potential to improve its performance by changing how it manages its staff. Performance would be increased by 8.9 per cent, contributing £2.4 billion to the industry.
The sector that would benefit the most financially is the professional and financial services industry, with an 8.2 per cent performance boost generating an additional £29.9bn output.
The study also reveals which people management approaches offer the greatest financial return by industry.
For example, developing strong and inspiring leaders generates the greatest efficiency gap in Construction. Whereas Recognising and rewarding performance has the greatest impact on efficiency in manufacturing (115%), Accommodation, Food and Leisure (109%) and Wholesale and Retail (109%).
Paul Devoy, Head of Investors in People, explains:
“It’s obvious that a skilled, confident workforce is essential to a productive enterprise. However, it has previously been difficult to determine the true impact on the bottom line. This study provides the evidence that focusing on excellence in people management can lead to significant performance gains across sectors and for the economy as a whole.”
“The effect of an efficiency gap is hitting the UK economy hard and better people management within firms should be recognised as a key mechanism by which the UK economy can address low performance. To make it easier to identify and compare approaches of the best performing firms, Investors in People has launched the first ever real-time ‘People Management Dashboard’.
Anyone can now access a unique set of common metrics, showing the management performance of workplaces across the UK. It’s a simple way to see how well employers are leading and supporting their people.”
“This knowledge comes from working with thousands of top businesses across the country, from Allianz Insurance, McDonald’s restaurants, to Brompton Bikes. Hundreds of academics, business leaders, and industry experts were involved in the creation of the sixth generation Investors in People standard, which will launch on 15 September.”
