Companies spend roughly one-third of their revenue on this to drive performance

In case you missed it, McKinsey’s #1 report of 1Q 2023, Performance through people: Transforming human capital into competitive advantage, analyzed data from 1,800 large companies across 15 countries to find what gives some organizations a long-term performance edge.

Bottom line up front (BLUF): Regardless of industry, firms who prioritize employee development and simultaneously deliver strong financial performance are more likely to become “superstars”- and they average more than $1 billion in economic profit.

The deets: Comparing their four categories of “People + Performance Winners,” “Performance-Driven Companies,” “People-Focused Companies,” and “Typical Performance,” the data showed that companies with a dual focus on developing people and linking their skills to organizational performance:

• Achieve more consistent financial results and demonstrate greater earning resilience (by 50%)
• Are talent magnets, with attrition rates almost 5% points lower than Performance-Driven Companies
• Report higher employee satisfaction and are 1.3 times more likely to promote employees into higher lifetime earnings positions than peers at Performance-Driven Companies

How to turn human capital into a real competitive advantage

“While investing in people is important, our research shows that another ingredient is needed to bring out their best and channel their efforts into results: organizational capital—that is, the management practices, systems, and culture within each company. This concept encompasses everything from training programs to workflows, department and team structures, employee communications, norms, culture, and leadership. When these elements are effective, they can turn a collection of talented individuals into a cohesive team.”

In other words, winning companies optimize the Exemplary Performance System for sustainable results.

The Tale of the Tape

How you, too, can achieve higher revenue growth for every dollar you invest in human capital.

A VP of Sales recently engaged us, exasperated with his current training partner, or Agency of Record (AOR). “This is a classic tale of the tape.” My brow furrowed, not understanding his analogy of distress.

“Boxing?” he went on.

I swallowed a bite of my sandwich. “I loved Netflix’s Kingdom, but I’m still not sure what you mean.”

“The stats.” He did his best ring announcer voice, echoing the first few words for effect, “And in this corner, our AOR. Weighing in at nearly $1,500,000 dollars I’ve invested. Their boxers include fresh, Ivy-league graduates, many with MBAs, who have never held any of the sales jobs they’re consulting us on. They have zero business experience, recycle their models across all their clients, and turn what I say into slides, for which they take all the credit and charge me handsomely. Worse, I have not seen any impact to my sales performance after their training.”

I got it now. I chuckled. I was in Training roles before. I loved my vendors and agreed old habits die hard.

“I’m just frustrated and embarrassed that I entrusted them, with no knowledge of the job, to train all my people - it's insulting. I have great people.”

I nodded in agreement – he did.

He continued, “And in this corner, Exemplary Performance! You take our best people – our Circle of Excellence winners. The ones we’ve interviewed, hired, mentored, coached, and you help us elevate them and their peers. You’ve empowered, enabled, and elevated my team based upon what our very best do. Your customer is the exemplar, not me. You’ve looked beyond ‘training’ solutions and you’ve helped me focus comprehensively on performance. It’s a game-changer.”

Many of you are still betting on Boxer A, your traditional training vendors and agencies. And so is your competition. If we're all using the same ideas and agencies, what is your real, differentiated advantage?

At Exemplary Performance, we'll never push solutions. We believe your solution - your advantage - is your best people, hiding in plain sight. We’re happy to help you pioneer a different, more cost-effective, and innovative approach to increasing performance.?Avoid another knockout - call or email us today to see how our approach could work for you.