Question: I work at a very young start-up company. We have had turn-over rates (mass resignation of staff, thrice) in the past but changes in the system have led to a more a stable employee retention and better technical-skilled employees. We do games, and I don't know with other software fields, but the "[death march](http://arstechnica.com/gaming/2011/05/the-death-march-the-problem-of-crunch-time-in-game-development/)" is quite popular in our field.

My boss believes that the only way for us to catch-up to top companies is to exert more effort, which generally translates to more time working. Hence, we've had a culture of working a lot of hours (we work an average of 65 hours a week, peaking up to 90hours a week).

Our deadlines are either very difficult and sometimes impossible (since the team is pretty young) but our management sets deadlines at the "if people at company X can do this in X days, we can do it too"

I personally believe that raising team efficiency is one of the factors that can help eliminate too much overtime.

I've seen my subordinates/junior staff often not focused enough during the day, but I don't know how to objectively measure this (I've seen questions here relating to KPI's, or key performance indicators).

I'm in a position where I have good relations with my boss (our CEO), the management and the entire team and I believe they're more than willing enough to hear out what I have to say.

How can I approach this in a way that is beneficial for both the staff and the company?

Answer: 
To change from a culture of overtime to efficiency you will have to stop the death marches. Each person has a limit, after that they can actually produce negative work. The density and severity of their errors will mean that that last few hours they worked, the project went backwards. Their mistakes may be obvious , they broke the build. Or it may be subtle, they picked the wrong choice of the size of a field in the database so that next week the tables will have to be rebuilt. 

If you try to tell them that they are inefficient but you still expect 60-90 hours a week they will not have a reason to change. If they can produce more quality code in less hours, but you don't reduce the expected number of hours, they can't help but be demotivated and inefficient.

One way to address the issue runs counter to the arguments in the mythical man month. You need more developers. Yes increasing the number of the people on a project does greatly increase communication issues. But expecting too many hours also is inefficient. Unless you are paying them for every hour of overtime, your costs will rise by adding members to the team. But you have already had 3 incidents of massive numbers of employees quitting.

I know nothing of your company, but a great way to demotivate people is to have management be able to flaunt their free time, hobbies and wealth. Management that leaves every day at 5, and has time for fun filled weekends, without a way to compensate the developers, designers, and artists is doomed to be facing mass exodus #4.
Other replies list why it's a bad idea to work extreme hours. Let me focus on a different aspect instead.

What you're attempting to do is basically a culture transformation.

This is impossible to do without a heavy management sponsorship. You don't just need to *convince* the management. You need to transform them into advocates of this change.

And that won't be easy to do given that they probably believe they are profiting from the current situation.

If you have management sponsorship, the way to go is:

* informing about the new expectations: the management should be involved
* training for the expected behaviors
* controlling the adoption

A culture transformation is difficult enough to do with management sponsorship. Without the sponsorship it's impossible.