Gallup recently found that one of the most important decisions any company can make is simply whom they name as manager. Yet further analysis suggests companies fail to choose the candidate with the right talent and attributes for the job 82% of the time.
Bad managers cost businesses millions of pounds each year, and having too many of them can bring down a company. The only defence against this massive problem is a good offense, because when companies get these decisions wrong, nothing fixes it. Businesses that get it right, however, and hire managers based on talent will thrive and gain a significant competitive advantage.
Further research has shown that managers account for at least 70% of variance in UK employee engagement scores across business units. Gallup also reported in two large-scale studies in 2015 that only 30% of employees are engaged in the working environment. Worse still, over the last 12 years the numbers have barely moved, implying that the vast majority of employees in UK businesses are failing to develop and contribute at work.
If great managers seem scarce, it’s because the talent required to be one is rare. It is widely acknowledged that great managers have the following talents:
- They motivate every single employee to take action and engage them with a compelling mission and vision
- They have the assertiveness to drive outcomes and the ability to overcome adversity and resistance
- They create a culture of clear accountability
- They build relationships that create trust, open dialogue, and full transparency
- They make decisions that are based on productivity, not politics
Gallup's research reveals that about one in ten people possess all these necessary traits. While many people are endowed with some of them, few have the unique combination of talent needed to help a team achieve excellence in a way that significantly improves a company’s performance. These 10%, when put in manager roles, naturally engage team members and customers, retain top performers, and sustain a culture of high productivity. Combined, they contribute about 48% higher profit to their companies than average managers.
It’s important to note that another two in 10 exhibit some characteristics of basic managerial talent. They can function at a high level if their company invests in coaching and developmental plans for them.
Conventional selection processes are a big contributor to inefficiency in management practices; little science or research is applied to find the right person for the managerial role. In research conducted by the CIPD, managers were asked why they believed they were hired for their current role, most of them cited their success in a previous non-managerial role. This reason doesn’t take into account whether the candidate has the right talent to thrive in the role. Being a very successful programmer, salesperson, or engineer, for example, is no guarantee that someone will be competent at managing others.
Most companies promote workers into managerial positions because they seemingly deserve it, rather than because they have the talent for it. Very few people are able to pull off all five of the requirements of good management. Most managers end up with team members who are at best indifferent toward their work, or are at worst hell-bent on spreading their negativity to colleagues and customers.
It's important to note, especially in the current economic climate that finding great managers doesn’t entirely depend on market conditions or the current labour force. On average, large organisations will have approximately one manager for every 10 employees, and Gallup finds that one in 10 people possess the inherent talent to manage, therefore, it is likely that someone on each team has the talent to lead. But given the research findings, the chances are that it’s not the manager. More likely, it's an employee with high managerial potential waiting to be discovered.
The good news is that sufficient management talent exists in every company, and it’s often hiding in plain sight. Leaders should maximise this potential by choosing the right person for the next management role using predictive analytics, i.e. predicting performance through individual assessments or using goal orientation to assess performance, to guide their identification of talent.
For too long, companies have wasted time, energy, and resources hiring the wrong managers and then attempting to train them to be who they’re not. Finally, an interesting yet relevant point to note here is that according to the CIPD, 75% of staff leave their manager, and not the business.