The Best Companies Don’t Have More Stars — They Cluster Them Together

Posted on: February 16th, 2017 by bobmorris


Here is an excerpt from an article written by Michael Mankins for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.

Photo Credit: NASA/ESA

* * *

Talent is what separates the best from the rest. The best-performing companies simply have better people. Right?

That’s certainly what we thought before Bain & Company launched its in-depth investigation of workforce productivity. After assessing the practices of global companies and surveying senior executives, we discovered that the best companies have roughly the same percentage of star talent as the rest — no more, no less. It turns out that what separates the best-performing companies from others is the way they deploy talent.

Bain performed detailed organizational audits on 25 global companies. We benchmarked the practices of these organizations relative to companies widely regarded as best-in-class. To complement this research, we collaborated with the Economist Intelligence Unit to survey more than 300 senior executives from large companies worldwide. We asked them to assess their workforce and to describe their people management practices, all with an eye toward understanding the drivers of workforce productivity. What we found surprised us, at least with respect to star talent:

o On average, 15% of a company’s workforce — roughly one in seven employees — are A players, or “stars.”

o The amount of star talent does not differ dramatically between the best-performing companies in our sample (the top quartile) and the rest (the average of the remaining three quartiles). Stars made up 16% for the best, and 14% for the rest.

What does differ between the best and the rest is how each group deploys its star talent. We found two distinct deployment models at work:

The best companies used intentional nonegalitarianism. The best-performing companies deploy their star talent in an intentionally nonegalitarian way. That is, they focus their stars on areas where these individuals can have the biggest impact on company performance. As a result, the vast majority of business-critical roles — upward of 95% — are filled by A-quality talent. In some technology companies, for example, software development is critical to business success. So the best-performing companies in this industry make sure that software development roles are filled with star talent. In other industries brand management matters more, so the A players tend to be clustered there. Stars are concentrated where they can make the biggest difference, which of course means that less A talent is available for other positions.

* * *

Here is a direct link to the complete article.

Michael Mankins is a partner in Bain & Company’s San Francisco office and a leader in the firm’s Organization practice. He is a coauthor of Time, Talent, Energy: Overcome Organizational Drag and Unleash Your Team’s Productive Power (Harvard Business Review Press, 2017).

Tags: , , , , , , , ,

Leave a Reply

bobmorris

Archives