New Study Shows Tech Leaders Run Their Businesses Differently — and It Works

blue digital binary data on computer screenIn a world that is becoming increasingly reliant on technology, it stands to reason that tech companies would thrive. However, a new study suggests that tech companies are actually changing the way businesses operate, and these digital leaders can really teach other CEOs a thing or two about how to run a business in the 21st century.

According to a study by management and consulting firm Bain and Company, the employees who work at digital companies are more productive and boast higher profit margins than normal companies. In particular, they found that Netflix, Dell, and Apple have employees that are 40% more productive than typical workers, and these employees bring in anywhere between 30%-50% higher profit margins than industry averages.

So what’s the secret? The Global Human Capital Trends 2016 report shows that 89% of companies believe leadership is an important or very important factor in success, and these tech leaders are clearly doing something right.

Bain and Company found three leadership themes in their survey. First, these leaders concentrated their most talented employees in management positions rather than having them being spread out all throughout the company in different jobs. Instead of putting star talent all across the business, the CEOs tailored specific jobs with concrete missions and put all their top workers in positions of management. Per the study, the CEOs believed that concentrating the top players into one sector would encourage risk-taking and experimentation.

Secondly, the tech leaders completely got rid of what is known as organizational drag. In typical companies, this is a natural process that occurs as companies grow in which bureaucracy, procedure, and other forms of waste creep up. To prevent this, successful leaders in the tech world are putting a major focus on a culture of high performance. To maintain this, CEOs would hire someone from the start who fits into their culture, rather than having the culture fit around them. With this extreme focus on culture in mind, the business is able to gain a greater degree of efficiency when making everyday decisions.

Lastly, the CEOs decided to focus their time on growing inspiring leaders in their own industry. They focused on creating an engaged worker, one who felt at home at their job. And once the employee felt this way about their work, they naturally became more productive at their job as they saw the bigger picture at hand.

So while consumers are addicted to their tech, not all tech companies will succeed. However, we may be closer to understanding why some companies thrive and others die.

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