Friday, December 8, 2023

Too many managers still failing the competency test

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There’s also been a lot of advice doled out on how bosses can best cope when managing remote workers, but this overlooks the more fundamental question of whether they were doing a particularly good job of this in the first place when they were face-to-face. Fresh research out yesterday from the Chartered Management Institute (CMI) suggests many are struggling regardless of circumstances.

According to the CMI, bad management has prompted one in three UK employees to quit their job at some point in their careers. Among those who reported they were currently working for an ineffective manager, one-third said they were less motivated to do a good job and half were considering quitting within the next 12 months.

Results from another survey earlier this year on LinkedIn adds further to evidence that rather than providing confidence and motivation, most managers are having the opposite effect. When asked if they were less stressed when their manager was off sick or on annual leave, a whopping 88% of participants said “yes”.

It has been argued that the UK has a historic legacy of poor management that has been perpetuated by a lack of investment in management and leadership skills. Too many ascend on their technical expertise or functional capability, rather than their ability to lead a team, and are left to muddle their way through as they figure out the latter.

READ MORE: AI and hybrid working may not solve UK productivity problem

John van Reenen, a professor at the London School of Economics, has tracked the impact of managers since 2004. He says the first 18 years of his world management survey confirm a “significant link” between management practices and productivity, suggesting that up to a third of the productivity gap between different countries and different companies could be attributed to management.

Mr van Reenen’s work also shows that the UK’s reasonable standing in the management league tables relies on the skills of executives in British subsidiaries of foreign companies. In other words, domestic corporations are struggling to nurture home-grown leadership talent.

This is important because economists have long been concerned about the UK’s lagging productivity, which is a major factor in fostering better living standards across the board. The more efficient an economy is, the more that can be produced in a sustainable fashion. And the more productive an employee is, the more he or she is likely to be paid.

According to the Office for National Statistics (ONS), output per hour worked in the first quarter of this year was only 0.6% higher than the pre-pandemic average of 2019, continuing the trend of stagnant productivity growth since the 2008 financial crisis.

READ MORE: Reeves seeks greater use of technology to boost UK productivity

Between 1949 and 2007, the UK’s gross domestic product (GDP) increased on average by 2.7% each year. But from 2008 up to 2021 that plunged to an average of 0.9%, with expectations that growth will nearly halve again to 0.46% per annum between 2022 and 2025.

Much of this is down to a short-sighted failure to invest in infrastructure required for long-term growth such as better transport links, a strong healthcare system, and improvements in education and training. Poor business leadership is only one part of the puzzle, but it is one of the few that organisations can and should take ownership of, rather than passing the buck to politicians.

Would anyone hire a solicitor who has never been to law school, or take their car to a mechanic who had no automotive training? Would they visit a doctor who hasn’t been to medical school?

Of course not, and yet more than 10 years ago the CMI found that four out of five managers in the UK had no leadership training at the time when they took on their management responsibilities. And though these “accidental managers” are costing employers tens of billions every year, the situation hasn’t improved with the research released yesterday showing this is still the case among 82% of new managers.

“This stuff is dragging down businesses, dragging down the economy, and also stymying the ability of public services to do what we need them to do,” said Anthony Painter, director of policy at the CMI.

“Economists have looked at this and they think something in the order of a third of the difference between us and the most productive countries is down to the quality of management and leadership – right there is the reality.”

READ MORE: UK should look to its peers if it wants to bridge productivity gap

He added: “In any skilled area of modern work, you would expect people in positions of competence to receive at least minimal training. You want your plumbers to be trained, you want your cybersecurity people to be trained – well the same is true of managers.

“The fact that 82% haven’t received training when they’re become managers, that tells us really how seriously we’re taking management and its importance collectively.”

For most organisations the solution isn’t more layers of management abetted by swelling ranks of consultants, but rather having people in leadership positions with the skills to motivate staff and let them get on with their jobs. This applies all the way to the top.

If the chief executives of the UK’s biggest companies are as exceptional as their salaries imply, why are they not focused on this – one of the few things which is completely within their power that will boost productivity across their organisation and the wider economy?

About one out of every four people in the workforce is in some sort of managerial position, with most left to rely on their internal compass as to how best to get on with it. Some gifted amateurs will succeed but when you look at the stakes involved it seems an unnecessarily excessive amount is being left to chance.

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