Morning Advantage: The People-Profit Connection

by Peter Bijkerk

If it’s good to treat CEOs as if they were owners, would it be even better to treat everyone that way? To begin answering that question, a trio of British researchers reporting in the European Business Review, compared the performance of 48 British employee-owned firms to 178 comparable traditionally structured businesses in good times (2004-2007) and (very) bad (2008-2009).

Traditional firms had the edge in the boom times, racking up average annual revenue increases of 12% compared with employee-owned firms’ 10%. But when the downturn hit, the bottom dropped out at the traditional firms, as revenue increases plummeted to 0.6%. Not so at the employee-owned firms, where average gains actually notched up, to 11%. Why? Even though profit per employee remained the same at both kinds of organizations (despite higher pay at the employee-owned firms), traditional firms shed workers (and apparently revenue with them) in the recession, while the employee owners hired more people, scooping up some of that profitable laid-off talent.


Growing Economies the Old-Fashioned Way (The Independent)

You might not know it to read most headlines, but Africa has been the world’s second fastest-growing region for 10 years now. Most of that growth is coming not from resource exploitation but in the same way it does in the U.S. and Europe — from domestic consumption. More than 90 million Africans now earn enough to spend half their income on something other than shelter and food, and McKinsey expects that figure to reach 128 million by 2020. Leading the way are South Africa, Mali, Lesotho, and perhaps surprisingly, Morocco and Egypt, which are both on track to create more new jobs than new entrants into the workforce.


The Wide World of Employee Benefits (Mercer)

Mercer’s new worldwide benefits report raises a harrowing specter for multinationals looking to keep up with the latest trends in non-cash compensation. In France, for instance, employees who’ve worked just 24 months can take 12 months off to start their own businesses. In Nigeria, companies provide home electricity generators, picking up the tab for maintenance. Workers in England get “Botox leave” — paid time off for cosmetic surgery — and Australians are commonly granted “eternity leave” — 13 weeks off after 15 years’ service, with another month off for every five years more worked thereafter.


Innovation and Its Discontents

Do You Need To Be a Jerk To Be a Successful Entrepreneur? (Tech Crunch)
The Difference Between Apple and Amazon in One Chart (ReadWriteWeb)
Five Ways To Break Through Innovation Bottlenecks (Strategy & Innovation)