Better management means better results shock

Research(1) shows that structured management (formalising roles, agreeing targets, measuring results and basing decisions on numbers) results in better business performance.

The impact is about the same as R&D spending and far outweighs that of technology spending.  Hardly surprising when one considers the predictable outcome of combining new technology investment with poor management.

Better management means better results (2) - and yet how much attention do UK business owners devote to improving their management skills?  In my experience, this comes pretty low in the priorities of most business owners and yet holds the key to all the other issues that they spend time on (and probably lie awake worrying about).

Usually, major improvements in performance can be achieved with simple, quick and low-cost interventions.  Clarifying what the business is trying to achieve.  Setting out reporting lines.  Implementing useful (outcome-based) job descriptions.  Standardising processes.  Implementing measurement.  Implementing monthly business reviews.

Creating each of these management artefacts is an opportunity for two-way communication; an opportunty to explain, understand, challenge, improve and involve.   The investment of time required is trivial in comparison to the benefit.  In any case, what else should a leader be spending their time doing?

Seems obvious really.

If you'd like to learn how to improve your management skills take a look at these events.

1) What Drives Differences in Management Practices? Nicholas A. BloomErik BrynjolfssonLucia FosterRon JarminMegha PatnaikItay Saporta-EkstenJohn Van Reenen, American Economic Review May2019 Vol. 109 Issue 5 Pages 1648-1683

2) Management, Skills and Productivity, Emile Cammeraat, Lea Samek and Mariagrazia Squicciarini, OECD SCIENCE, TECHNOLOGY AND INDUSTRY POLICY PAPERS February 2021 No. 101

Rottweilers as managers

A while ago I was talking to my client in his new office on the second floor of his new factory and HQ.

His business is growing fast and was concerned that he hadn’t had time to “do all the HR things I should do” for the past couple of years.

For a while, business growth was hampered by quality and delivery problems. His staff were avoiding answering the phone because they knew it would be an angry customer. Sales, Design and Operations were at loggerheads. The company did have, however, lots of HR stuff going on. Appraisals, reviews, training and so forth ran like clockwork and my client devoted a lot of his time to HR initiatives.  He felt that this was caring for his people and that it would result in better performance.

We spent a lot of time when I started working with him talking about structure and how to solve the customer service issues. He had an effective project manager (he called him “a Rottweiler”) but was nervouse about putting him in charge of operations “because he won’t look after people”. We agreed that the critical thing was to sort out operations and that the business could tolerate a few ruffled feathers for a year or two to achieve this. This approach was adopted more generally, with managers being asked to focus on their “one number” and far less attention being paid to side activities. Management meetings started to focus on performance and coaching, values and beliefs, strategy and vision.

Now the company (mostly) delivers what the customer wants when they want it. My client is spending his time (mostly) on strategy and growth. Staff attrition has not risen, productivity has. The reduction (elimination, really) of the HR machinery seems to have had no negative impact.

What do I take from this story?

• Winning teams focus on a single simple goal.
• Individuals too need to be given a single simple goal – don’t distract them with non-essentials.
• People are motivated by being part of a winning team, feeling that they contribute something important to that success, that they are good at what they do and that their contribution is recognised.
• A very caring boss with a failing team will have unhappy employees whilst a boss who balances concern for people with concern for results will have happier employees.
• Appraisals and formal reviews build on good management, they are not a substitute for it.

If you'd like to find out more about getting more from your people then register for one of these events.

Adapted and updated from a previous post on this website.