Recently, Knightsbridge Human Capital Solutions decided to research Canada’s 50 Best Managed companies to see if there were any significant differences in their human capital philosophies and practices compared to the average Canadian company.
The study clearly showed that the majority of “50 Best Managed” companies are implementing human capital best practices often seen only in much larger organizations. 78% of the “50 Best Managed” companies surveyed feel that investing in their people, is one of their top 3 business priorities, as compared to 26% for the average Canadian company, based on Knightsbridge research norms. “50 Best Managed” companies also dedicate significant effort and resources to developing unique, high performance cultures, by creating a strong sense of “family” and “transparency” to drive business results. Knightsbridge recognizes that these two attributes helps drive strong employee empowerment and passion, which fuels these companies strong customer focus, entrepreneurial spirit and results orientation.
“Given these private companies are some of the most successful in Canada, these results aren’t that surprising, we certainly expected to see a strong focus on people,” said David Shaw, Founder and CEO of Knightsbridge. “However, what was surprising to us was the magnitude of their commitment to investing in their business culture and people, and the extent of best practices used,” Shaw continued.
The study also revealed some areas where private businesses can still improve their performance. For example only 53% of the “50 Best Managed” companies surveyed had a formally constituted board of directors and among those that do, most rely on the CEO and existing directors to recommend new directors, which can limit a board’s objectivity and diversity of opinion. Succession planning was another area that needed attention, particularly for the CEO. Less than 50% of the companies surveyed had succession plans in place for management and critical positions, and only 16% of companies had succession plans in place for their CEO.
“Knightsbridge recognizes that effective corporate governance and succession planning are perhaps two of the most critical endeavours that all companies must deal with, to help ensure continued business success”, said Shaw. “It will be interesting to see if “Canada’s 50 Best Managed” companies also decide to adopt the best practices that we see larger organizations using to help them successfully tackle these key areas”, added Shaw.