Why UK management must learn its way out of a crisis
A crippling lack of operational skills in the UK economy can be resolved by targeting management and leadership development, reveals major research
Only strategic spending on management development can alleviate the severe problem of nearly half of UK line managers being deemed ineffective, it has emerged.
More than two in five managers believe their own line managers are not up to the job, according to a major survey of nearly 4,500 executives conducted by CMI and Penna.
And, although there is a strong correlation between organisations with good management and business success, there is a worrying mismatch between businesses’ choices of management and leadership development (MLD) and that which is actually deemed worthwhile by those who have undertaken it. Indeed, the research suggests that line managers are worryingly unfamiliar with SMART Objectives: Specific, Measurable, Assignable, Realistic and Time-related goals.
Those surveyed included 300 chief executives and 550 HR managers. The survey found that only 39% in low-performing businesses deemed their own line managers effective, compared to 80% in high-performing organisations.
Yet businesses’ responses to the competency crisis have been haphazard. Many firms continue to invest in forms of MLD that are deemed relatively ineffective by those who have undertaken them. More than half of respondents rated MBAs and CMI’s Chartered Manager accreditation as among the most effective types of MLD. Yet, foolishly perhaps, less than a quarter of businesses invested in them. By contrast, 40% of businesses invested in skills audits, conferences and workshops – even though less than a third of respondents rated these methods of MLD as particularly effective.
This misguided approach to MLD has serious ramifications. MLD is crucial. Even in isolation, leaders’ commitment to MLD alone accounted for a 21% difference in sta. performance. When aligned with business areas that complement it – such as performance management and leadership succession planning – MLD accounts for as much as 32% of the variation in people performance. Some of this variance is due to MLD’s impact on employee engagement: in organisations where MLD is at its highest, employee engagement levels are 5% higher.
“The research makes sobering reading for organisations who lack a strategic and clinical approach to MLD,” warned report co-author Patrick Woodman, CMI policy manager. “Despite the fact that nothing could be more crucial to a business’s health than well-targeted MLD, many organisations continue to use bad methods – or ignore it altogether. “Those that do invest in MLD – such as Chartered Manager accreditation or MBAs – have a big advantage.”
The public sector made the biggest investment in MLD, at £1,515 per manager per year.
The facts are in the figures
These statistics show evidence that spending money on management development can be beneficial for business
Chemical experiment Drug firm records massive variance in performance after MLD test The MLD experience at AstraZeneca was a great control test. Against an across-the-board improvement of 1-2%, areas where the MLD programme had been delivered recorded an improvement of 3-12%. In sales, where it had not been delivered, there was no improvement. This suggests a link between MLD and management effectiveness.
Strong advice MLD programme helps advisory service do more with less Faced with the need to handle a 45% increase in care cases with no increase in staff, the Children and Family Court Advisory and Support Service (Cafcass) launched its MLD programme. Result: a 15% increase in productivity, a successful absorption of the extra workload and an increase in employee engagement.
Stay on the line Telecoms major sees staff retention boost following MLD drive Cable & Wireless recorded a 100% retention rate among its “high potential” group of managers after it launched its MLD programme in 2010. As of September 2011, none of the 55-strong group had quit. A two-day programme was arranged for areas of the business with the lowest management scores. Manager ratings rose by 7-12%.
Public sector leads way
Annual MLD investment per manager by economy sector
Public sector £1,500 Private sector £1,400 Voluntary sector £1,200
Good management pays
Proportion of line mangers rated as effective by performance of organisation
Low 39% High 80% Overall 57%
Train to gain – a view from Christopher Kinsella
Few managers are defined by the most important thing they do: bringing the best from their staff. Rather, managers are more often defined by what they sometimes do, or once did and do no longer.
Head teachers are defined as teachers, yet they rarely teach. Partners in accountancy practices are primarily seen as accountants, not managers of accountants. Management is a profession in its own right, but it is underrated and seen as secondary to the line of business or the technical discipline the manager is in. This is a mistake. While experience of a sector is crucial to developing people within it, there are overarching skills to management and leadership that should be applied to all sectors. Sadly, UK plc. is lacking in them. This should not be surprising. If you ask someone whose skill it is to build to then manage builders – with little, no or ill-targeted management training – you should not be surprised if things collapse.
Meanwhile, the report raised many areas for further research. The correlation between good MLD and organisational performance is just one answer to the key question of how to bring the best out of people. Through further research, such as this summer’s probe into the impact of qualifications, we will strive to discover more.