The research team – from the Harvard Business School, Cambridge University, the London School of Economics, McKinsey & Company, and Stanford University – identified management practices associated with corporate success. The most important are:
Rigorous monitoring. Best practice firms are ruthless in monitoring their entire production and performance processes. The basic message here is that information is king, and firms that collect, process, and exploit information are beating firms that do not.
Challenging targets. Best practice firms also set tough short-run and long-run targets for every stage of their process. For example, in manufacturing many great firms had daily, weekly, monthly, quarterly, yearly, and five-yearly targets. These provide employees with staircase for higher performance.
Rewards and incentives. The best firms acknowledge and reward their top performers with range of bonuses and promotion. Underperformers are rapidly identified and provided with training. If efforts to improve their performance are not successful, they are moved out of the firm. This motivates employees to outperform, driving firms with strong rewards to overtake their weaker competitors.
The very best firms are adopting these practices across the board. Effective incentives require comprehensive monitoring and broad targets to enable firms to identify star performers.
To read more about the broader research project, the World Management Survey, and benchmark your own company visit http://blogs.hbr.org/
