Humans missing from management, finds Commission

22 July 2014 -

Good people managers with long-term outlooks are in greater demand than ever, even as the business world automates. Yet the system is failing to develop them – and is hooked on short-termism

Ben Walker

Leaders with crucial social skills are missing in action as the world moves into the digital age.

CMI’s Commission on Management and Leadership, run by CMI with the All-Party Parliamentary Group on Management, has unearthed a dearth of managers and leaders who can use so-called soft skills to tackle tricky situations or handle difficult conversations.

“Managers who are most likely to succeed in future will be good communicators who have a sense of purpose and are collaborative, ethical, flexible and innovative,” says the report.

Yet these are exactly the types of skills that are missing. The Commission examined a vast array of data and took evidence from leading professionals including John Lewis chairman Sir Charlie Mayfield, Unilever chief executive Paul Polman and Harriet Green, chief executive of Thomas Cook. While those three companies, and many other majors studied, were found to be world leaders in great management, the Commission found that much of the rump of UK managers exhibited weaknesses in the very qualities needed to drive productivity – the human skills needed to motivate and engage people.

“Taken together, these shortcomings paint an unflattering picture of many aspects of UK management in 2014,” the report reveals. “It is crucial that we address them – because underlying weaknesses in management and leadership are holding back our economic performance.”

An epidemic of short-term thinking is to blame for much of the malaise. Training for new managers is too little, too late. Only 23% of managers said their organisation was good at giving new managers training in management and leadership before – or even within three months of – taking on their new roles. Data from the UK Commission on Education and Skills reveals a worrying mismatch between the skills employers want and what they invest in developing.

"Businesses or managers that rely on cost-cutting or lack of investment as their main strategy are unlikely to build a business for the future"

Rather than focusing on the long-term development of the three key constants of management – purpose, people and potential (see below) – quick wins have become king. “Those who do progress within the same company have learnt that ‘results’ are everything, which is a dangerous view,” one management source told the Commission. “In the long term, businesses or managers that rely on cost-cutting or lack of investment as their main strategy are unlikely to build a business for the future.”

And short-termism is contagious. “Those who use their short-term success to move to a different organisation take the same management style with them,” added the source, “thus spreading the culture even further.”

Moreover, with much of the responsibility for management training being left to existing managers, there are concerns that bad habits will cascade down the generations. Meanwhile, the inflexible hierarchies that dominate UK business – but which have changed little in nature since the 1950s – are stifling innovation.

“Too long spent in silos limits the brain’s broader development and ability to relate to people with different backgrounds and experiences,” another senior manager told the Commission.

It is the companies that are breaking hierarchies that are succeeding. “I don’t consider my role at the top of anything, hierarchically,” a chief executive admitted to the Commission. “Great chief executives have to consider themselves in the centre of the vortex. They have to be able to gather quality information from all communities, both inside and outside the business.” Another warned that autocratic bosses were doomed to fail. “You need partnerships,” the senior figure said. “The problems are so big you can’t solve them by yourself.”

Businesses are sowing the seeds of disaster by failing to plan for the future and adopting approaches that will contribute to their own demise, the Commission concluded.

THE DARK FUTURE OF MANAGEMENT

Short-term gain for long-term pain Short-termism is being rewarded and such attitudes are proliferating

Hierarchies killing innovation Old-fashioned pyramid structures are preventing ideas coming from all parts of the business

Training famine putting key skills at a premium Businesses’ reluctance to invest in development is reducing skills

BACK TO BASICS

British business has lost sight of the three tenets of great management – purpose, people and potential – instead becoming bogged down in quick, shabby wins and suffocating hierarchies. Commission chiefs recommend that UK firms refocus on the three Ps and reap the rewards.

Purpose Management needs to exemplify company values, and build sustainably for the long term, rather than obsessing over short-term financial targets.

People Address the skills gap. The UK needs 200,000 new managers every year to 2020. Invest in training or face a talent crisis.

Potential Leaders should champion their great staff, make sure seniors in the company know what their teams can do, and challenge the status quo and suffocating hierarchies.

THE WESTMINSTER WAY

The Commission has special advice for government – the three Es:

Employability Teach leadership skills in schools and at universities.

Exchanges Facilitate exchanges of key personnel to fill skills gaps.

Encourage reporting Urge companies to showcase their work on the three Ps.

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