PHILADELPHIA--()--Despite economic change, technological advances and increased globalization during the past 15 years, the core business practices that distinguish the World’s Most Admired Companies (WMAC) have remained consistent, according to a report released today by Hay Group, the global management consulting firm. In its new report, Hay Group analyzed the findings from its 15 years of research to identify the WMAC and uncovered the four most significant characteristics that have consistently enabled the WMAC to outperform their peers.
According to Hay Group’s research, the four critical factors for the WMAC’s organizational success are:
- Executing and enabling strategy
- Building structures and processes to sustain long-term performance
- Achieving success through people
- Placing a high value on leadership and talent
Companies that were able to implement these practices over time consistently attracted and retained the best talent, and outperformed industry peers and the market as a whole.
“Over the past 15 years, we have seen the composition of the World’s Most Admired Companies list change, but the attributes that enable those companies to excel have remained the same,” said Mel Stark, vice president & regional reward practice leader at Hay Group. “In today’s uncertain business environment, it is more important than ever for organizations to place value on these core practices, engaging and developing the talent that will be critical to long-term success.”
More Information on the Four Key Attributes for the WMAC’s Success:
Successfully Executing Strategy. The WMAC excel at turning strategy into reality. While most companies devote attention to strategic planning, organizations that are not among the WMAC often fall short when it comes to execution. The WMAC, on the other hand, excel by creating clear objectives, aligning their organization and people with their long-term business goals, and deliberately putting strategies into practice. At the same time, the WMAC understand the impact culture has on both their employees and the bottom line and therefore, they create strong, positive cultures that support their strategy.
Building Structures and Processes to Sustain Long-Term Performance. Compared to their peers, the WMAC have built enduring structures to enable long-term business success. The WMAC embed innovation into their cultures with 76 percent of the WMAC successfully spotting and spreading new ideas, compared to just over 59 percent of their peers. Moreover, the WMAC successfully leverage their global reach while simultaneously giving local business units the flexibility to respond to local market needs. At the WMAC, 84 percent respond flexibly to local market needs, compared to only 73 percent of their peers.
Achieving Success through People. The WMAC recognize the value of their “intangible assets” and create the right conditions for their employees to thrive. They are more likely to have a human capital strategy in place that has been reviewed and approved at the board level and focus heavily on creating opportunities for personal advancement and growth through planned career assignments and one-on-one coaching. The WMAC not only emphasize engaging employees, but also enabling them and removing barriers to productivity. These efforts result in revenue growth 4.5 times that of their peers and a 54 percent reduction in employee turnover.
“Attracting and retaining top talent is critical, particularly with the scarcity of specialized talent and the high cost of turnover,” added Mark Royal, senior principal at Hay Group. “Throughout the past fifteen years, the World’s Most Admired Companies have continued to invest in their employees, engaging and enabling their people to drive the organization forward. We see this holding true not only today, but over the next fifteen years as well.”
Placing a High Value on Leadership and Talent. The WMAC consistently work hard to ensure that the right talent is in place. More so than their peers, the WMAC have rigorous selection procedures for evaluating new hires, place a strong emphasis on growth and development opportunities, and closely link pay and performance. Moreover, the WMAC get a larger ROI from their reward programs, promoting a ‘total reward’ approach that makes best use of both tangible and intangible components.
About the FORTUNE magazine/Hay Group World’s Most Admired Companies research
Hay Group has collaborated with FORTUNE magazine annually since 1997 to identify, select and rank the World’s Most Admired Companies and uncover the business practices that make these companies both highly regarded and successful. For more information on how the rankings are determined, please view the full methodology on Hay Group’s website, or find FORTUNE’s full list of the World’s Most Admired Companies here: http://www.fortune.com/mostadmired.
Alongside this study, each year Hay Group carries out additional research to uncover what makes these companies so successful. The firm surveys senior executives in a sample of the organizations that participated in each year’s Most Admired Companies rankings. The questions cover a wide range of business priorities and practices. Hay Group then compares the results for World’s Most Admired Companies with other participating companies. During the past 15 years, Hay Group has looked at topics including leadership development, innovation and talent management, and how companies to sustain performance.
For more information and to see related content, please visit Hay Group’s Most Admired Companies microsite at http://bit.ly/zvPvXq , join the conversation on Twitter at http://bitly.com/zvXH65 or discuss key issues and questions on LinkedIn at http://bitly.com/zQoElv.
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About Hay Group
Hay Group is a global consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective, and motivate them to perform at their best. With 85 offices in 49 countries, we work with over 7,000 clients across the world. Our clients are from the private, public, and not-for-profit sectors, across every major industry and represent diverse business challenges. Our focus is on making change happen and helping people and organizations realize their potential.
About Hay Group Insight
For over 35 years Hay Group Insight – the survey research division of Hay Group – has partnered with the world’s largest and most complex organizations to create value through the strategic use of employee survey research. Our mission is to help senior leaders identify the barriers to individual and organizational effectiveness, and remove them to improve the performance of people, teams and entire organizations. By providing employee feedback and supporting strategy, our surveys help organizations achieve high levels of performance and lasting change.
About FORTUNE
FORTUNE magazine is a global leader in business journalism with a domestic circulation of over 850,000 and a global readership of nearly 5 million, which include major franchises such as the FORTUNE 500 and the FORTUNE 100 Best Companies to Work For. FORTUNE Live Media extends the brand's mission into live events, hosting a wide range of annual conferences, including FORTUNE’s Most Powerful Women and the FORTUNE Global Forum. FORTUNE publishes English-language editions in Europe and Asia, and local-language editions in China, Turkey, South Korea, Indonesia, India and Greece. CNNMoney.com, is the online home of FORTUNE.com, which draws 5.7 million readers a month.