How do you Compare 2016

Some great insights - from Vern.

Thanks Vern Harnish and www.gazelles.com for all your posts and updates. Needed to share thse interesting stats. www.dhirubhai.net/in/verneharnish

How Do You Compare -- the 2016 Fortune 500 list is out and I find it useful each year to pick a few firms in my related industry and see how Gazelles stacks up in terms of revenue and profit per employee. As a whole, the 500 generated $12 trillion in revenues representing two-thirds of the U.S. economy, $840 billion in profits, and employ 27.9 million people. Revenues were actually down 4.2% and profits down 11% from a year ago -- mainly dragged down by oil prices.

$430k Revenue/Employee -- given these numbers, the Fortune 500 averaged $430,000 revenue/employee. For all their perceived bloated-ness and bureaucracy, the big firms generate over 4x the revenue/employee than most mid-market firms. The challenge: mid-market firms tend to throw people at problems rather than focus on improving productivity through process re-design.

$30k Profit/Employee -- in turn, the Fortune 500 averaged $30,107 profit/employee last year. Apple, which moved up from #5 to #3 on the list, generated $53 billion in profit on $234 billion in revenue with 110,000 employees - giving it a whopping $485,000 profit/employee - greater than the average revenue/employee of the Fortune 500!! Insane.

7% Profit -- overall the Fortune 500 generated an average 7% profitability (the Global 500 was lower at 5.4%). If you're hyper-specialized on a profitable niche, mid-market firms should be generating 15% to 30% net profit, giving them something close to the same $30k profit/employee of the Fortune 500 even though their revenue/employee is much lower. Revenue is vanity; profit is sanity. How do you compare?

CEO Advice -- Fortune also surveyed the CEOs of the 500 list, asking them for the best management advice (they had ever received. Hiring the best people; listening and asking questions; relentless focus; and pacing were the main categories of insights. The pacing comments spoke most loudly to me - here's a couple of my favorite: