PEOPLE quality and people performance are the leading drivers of Australian mid-sized company success, but competition will continue to intensify, according to research from PricewaterhouseCoopers
PEOPLE quality and people performance are the leading drivers of Australian mid-sized company success, but competition will continue to intensify, according to research from PricewaterhouseCoopers.
The survey, which took in 400 companies with turnover of less than $500 million per annum, found that there was a clear link between companies expecting increased profits in 2004 and their intention to make decisions consistent with a long term strategy.
One of the three primary drivers of the more successful companies was to invest in the long-term development of their people, with a particular focus on leadership. Other key drivers were to protect planned investments and focus long-term on improving customer relationships.
“Often the focus on achieving short-term financial results can drag companies away from their stated longer-term strategy,” said PricewaterhouseCoopers partner Allan Watson.
“You can have the perfect business strategy but it won’t be effective without a motivated and skilled workforce to put it into practice. The evidence is growing that continued healthy earnings growth rewards those companies that manage short-term challenges but also stick to their long-term strategy and invest in bringing it to life,” Watson said.
The Business Insights Survey March 2004, which was conducted for PricewaterhouseCoopers by Woolcott Research, found that companies expecting profit increases are 30 per cent more likely to focus on people quality than companies not expecting to increase profits who, in turn, concentrate more on margin compression and increasing costs to underwrite future growth and profitability.
Additionally, companies expecting profit increases are 44 per cent more likely to nominate people performance as the major driver to help improve business performance in the next 12 months.
Debra Eckersley, PricewaterhouseCoopers partner in People, Culture and Performance said that mid-tier companies often lack the HR resources that larger companies have, and often struggle to get the most out of a limited amount of funds for managing people.
“The solution, which is always easier said than done, is empowering everyone to think about HR as their responsibility, rather than the responsibility of someone with a HR title,” she said.
