i4cp Study: The Best Companies are Getting Better

High-performance organizations are up to 7x as effective as low performers at managing some human capital issues.

What separates the top companies in the world from those struggling to stay afloat? Findings from The Best Get Better: The Critical Human Capital Issues of 2012 study from the Institute for Corporate Productivity (i4cp) show that high-performing organizations - those that are up to seven times as effective as low performers at managing some human capital issues - have been consistently increasing capabilities in the areas they consider critical and have been doing so throughout the course of the global recession. Conversely, low-performing organizations are stalled when it comes to increasing management effectiveness, and are continually shifting focus to what's biting them at the time.

Considering the ongoing instability of the global market, kudos to those doing well. And woe to those straggling behind.

The "best are getting better" trend was a dominant theme in the 2012 iteration of i4cp's annual Critical Issues Survey, which identifies issues considered to be of critical importance to organizations. Respondents representing some of the top companies worldwide were queried about what they consider to be of chief importance to their organizations and, second, how effective their organizations are at managing those issues. The gaps between the two measures were used to calculate the critical issues, or those issues that resources can be focused on that will lead to the greatest bottom-line advantages.

"We consistently see that high-performance organizations are getting better and that one of the reasons for this is that they never stop striving to improve," said Eric Davis, i4cp's senior editor and author of the report.

"These organizations have already made themselves wildly more effective at managing the most important topics in human capital. But instead of high-fives all around when they add to their competencies, they are more likely to set their sights on the next level of development. They never let up on the core issues and they gauge peripheral issues - not just by what's hot at the time, but by what solid research has told them will be a concern in the future. That kind of agility and forethought has allowed the gap between high- and low-performing organizations to widen during the global recession and recovery."

One example of this can be seen in issues related to workforce measurement. High performers are adding rigor, accountability and stronger linkages between what happens in their organization and what they are measuring to determine success. These metrics are then used to guide decision making and align human capital to overall strategies throughout the organization. Lower performers, however, are drifting away from more effective workforce analytics, yet are reportedly struggling to master strategic planning, alignment and execution.

So in practice, high performers are bolstering organizational performance in the areas that low performers are striving to improve on by focusing on developing skills now that in the future will synergistically raises management ability in the more internally focuses, core areas.

Some other findings from this year's survey:

• High-performance organizations claim effectiveness in some areas of leadership that are up to five times that of low performers. High performers are also continuing to make further strides in the struggle for effective leadership, while low performers continue spinning their wheels.
• High performers are getting a handle on social media, human capital measurement and the changing nature of the role of HR ... issues that get completely overshadowed among low performers.
• Top companies are looking to find greater competitive advantage in flexible work arrangements. Though they show only slightly greater effectiveness in managing flex work, high performers ascribe it nearly twice the importance of low performers.
• High performers see a need to focus on external factors while low performers focus internally. This means issues like innovation, sustainability and global markets are on tap for high performers, while building (or rebuilding) the corporate brand is critical for low performers.
• Knowledge retention is an area where basic skills are critical in a dynamic job market. Yet high and low performers both report decreased focus and ability in managing this issue, raising the fear that information vital for business continuity will be lost in a wave of post-recession job churn or retirement.

A deeper examination of the top critical issues, including those deemed most critical by high-performance organizations, are analyzed in the new i4cp report, now available for free.