SINGAPORE - Home-grown outfit Charles and Keith has seen its sales grow by 16% per year between 2008 and 2011 while operating profit shot up 21% per year, on the back of investments in staff.
Companies that adopt good management practices are well-placed to outperform competitors as they become more productive and are in a better position to share such gains with their staff.
According to the Business Excellence Impact Study, which looked at some 220 organisations from the private sector that have received Business Excellence Awards and certifications, such firms have an edge over rivals in terms of labour productivity and profit margins.
The study was conducted from July to September this year by the National University of Singapore Business School as part of an ongoing effort by Spring Singapore to chart the performance of companies which have adopted the Business Excellence framework.
By enhancing operational processes, investing in automation as well as training staff and optimising manpower resources, organisations have proven to be more productive than their counterparts.
Higher labour productivity
The results, which took into account available data from 2008 to 2011, showed that labour productivity, as defined by value-added per worker, was 11.5 per cent higher for these organisations versus companies within the same industry, while profit margins were, on average, 13.5 per cent higher.
For the companies studied, every one per cent increase in productivity translated to a 6 per cent increase in operating profits and a 2 per cent increase in revenue growth.
Choe Peng Sum, a member of the Singapore Quality Award (SQA) Governing Council, described the Business Excellence framework as a system that could help companies become more competitive in today's business world.
Going through the process gives firms a real chance to improve, he said.
At the same time, Mr Choe recognises that small and medium enterprises (SMEs) may struggle with limited resources and funding, especially at a point when the economy is slowing down.