Copy of How Standout Firms Leverage Total Performance Leadership Principles (TPL Insights #277)

By Rob Andrews

What if I told you that national productivity growth isn’t being driven by the slow and steady progress of thousands of companies, but instead by a handful of elite firms making bold, strategic moves? That’s not just a gut feeling or a consultant’s hunch, that’s what McKinsey Global Institute just proved in their 2025 report The Power of One. And if you’ve been following our work on Total Performance Leadership (TPL), you’ll feel a jolt of déjà vu reading it. Because McKinsey just confirmed what we’ve been shouting from the rooftops for years.

According to McKinsey, a tiny fraction of firms (2% in their sample) generated over 60% of all positive productivity growth. These are the “Standouts.” They don’t just tweak and optimize; they transform. They make bold bets. They reinvent themselves. And more often than not, they blow past their competitors like they’re standing still. Sound familiar? It should. It’s basically the textbook definition of a TPL organization.

Where TPL and McKinsey Collide (In a Good Way)

McKinsey’s research hammers home six key ideas that align perfectly with TPL’s nine principles. Let’s connect the dots:

1. Bold Strategy vs. Marginal Tweaks

McKinsey calls out the myth that productivity grows gradually through best practices trickling down the organizational chart. Nope. They found it grows in bursts, triggered by bold, decisive moves—like Apple moving into services or Amazon betting big on AWS. In TPL, we call this a High-Performance Mindset: the belief that your people can outperform, even if they don’t yet know how. It’s about leaders setting goals that stretch belief systems—and then aligning talent, capital, and culture to get there (Andrews, 2025).

It’s also about courage. The standout firms in McKinsey’s study didn’t wait for certainty. They took risks, reimagined what was possible, and often created entirely new value propositions. That’s what TPL organizations do. They stop playing not to lose and start playing to win.

2. Purpose Isn’t Fluff. It’s Fuel.

Standouts didn’t just cut costs—they created new value. McKinsey profiles firms like Delta Air Lines and Zalando, who reshaped their value propositions, not by being cheaper or faster, but by making themselves indispensable to their customers. This is what TPL calls a Purpose-Driven Approach—aligning everything you do around a deeply felt “why.”

Purpose drives innovation, fuels culture, and acts as a magnet for talent. TPL companies like H-E-B, QuikTrip, and Southwest Airlines don’t just talk about purpose. They bake it into hiring, onboarding, leadership development, and performance metrics. McKinsey’s Standouts did the same, often without calling it that. But the DNA is the same.

3. Unified Leadership Is the Engine Room

Bold moves don’t come from fragmented leadership teams. They come from alignment. McKinsey points out that standout firms often made massive strategic shifts, new business models, regional pivots, and M&A activity. That kind of transformation isn’t possible without a team that’s on the same page.

TPL calls this Unified Leadership, a senior team that trusts each other, debates vigorously, commits fully and speaks with one voice. In most companies, leadership teams are just a collection of well-compensated soloists. In TPL organizations, they’re a symphony. Unified leadership isn’t just good for culture, it’s good for business. And McKinsey’s Standouts prove it.

4. Disciplined Human Capital Beats Hiring Frenzies

One of the most underappreciated insights from McKinsey’s report is how many Standouts scaled productive business models and gained market share through employment reallocation. Translation: they hired better and smarter.

In TPL, that’s called Disciplined Human Capital Practices—the idea that every role is mission-critical and deserves the top 10% of available talent. From employment branding to onboarding to career pathing, TPL organizations treat hiring as a strategic lever, not a transactional function. McKinsey’s Standouts didn’t just grow; they built teams capable of sustaining and accelerating that growth. Big difference.

5. Measuring What Matters Isn’t Optional

McKinsey’s productivity metric—real gross value added (GVA) per worker—cut through the noise of traditional metrics like profit margins and efficiency ratios. GVA per worker is calculated as a firm’s total value creation (revenue minus external costs, or EBITDA plus total labor compensation) divided by the number of employees, adjusted for inflation and sector-specific price shifts. In plain terms, it reflects how much actual economic value each employee is generating, not just how efficiently they work or how lean the company runs. This metric exposes which companies are truly producing sustainable, scalable value through people and innovation, not just squeezing more juice out of the same orange.

This echoes TPL’s Measure What Matters principle. TPL organizations look beyond spreadsheets. They measure cultural health, leadership effectiveness, employee engagement, customer loyalty, and even trust. Why? Because what gets measured gets managed. And what gets managed gets better.

McKinsey found that firms with the highest productivity growth also saw the strongest growth in wages and profits. That’s the win-win-win TPL promises when employees, customers, and shareholders all benefit when you lead with purpose, clarity, and discipline.

6. Stakeholder Engagement Isn’t Soft—It’s Strategic

The Standouts in McKinsey’s report didn’t succeed by steamrolling vendors or squeezing employees. They created stakeholder ecosystems that worked together. Whether it was Amazon opening up its logistics backbone or The Home Depot enhancing both in-store and online experiences, the message was clear: collaboration beats extraction.

That’s TPL’s Balanced Stakeholder Engagement principle in action. When you treat employees, vendors, investors, and customers like partners, you get better outcomes. Loyalty goes up. Innovation goes up. Resilience goes up. And so does your bottom line.

The Bigger Picture: Culture as Strategy

McKinsey’s research reframes the entire productivity conversation. It’s not about working harder. It’s about creating the conditions in which your people can contribute more value. That’s a cultural game, not just a strategic one.

And this is where the TPL model shines. It’s not a silver bullet or a flavor-of-the-month framework. It’s a full-system transformation methodology designed to move organizations from status quo to standout. TPL is how you turn purpose into strategy, strategy into culture, and culture into performance.

In fact, McKinsey’s playbook could be recast in TPL’s language:

• Standouts = TPL organizations

• Bold strategy = High-performance mindset

• Portfolio shifts = Unified leadership

• Employment reallocation = Disciplined human capital

• Value creation moves = Purpose, clarity, and customer obsession

If you’re a CEO, CHRO, or board member, you’ve got a choice to make. You can:

• Tinker with your org chart again.

• Host another offsite and call it a culture change.

• Keep optimizing for next quarter’s earnings call.

Or…

You can do what the Standouts did.

• Reignite your purpose.

• Build a leadership team that’s actually a team.

• Install systems that attract and retain the best people.

• Rethink how you measure success.

• Obsess over stakeholder experience, not just shareholder returns.

If you’re serious about creating a firm that can lead your sector, grow through turbulence, and deliver exponential impact, there’s already a roadmap. It’s called Total Performance Leadership.

Warmest regards,

Rob Andrews

Chairman & Chief Executive Officer

Celebrating 28 years of Executive Search, Leadership Advisory, and Interim Executive Excellence

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References

Andrews, R. (2025). The Principles of Total Performance Leadership: A Resource Guide. Allen Austin.

Mischke, J., Bradley, C., White, O., Dagorret, G., Smit, S., Kuijpers, D., Atkins, C., & Sandhu, I. (2025). The power of one: How standout firms drive national productivity. McKinsey Global Institute. https://www.mckinsey.com/mgi