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Making Management Matter


Most business professionals would likely agree that good management is critical for the success of their organisation. There are many angles from which you could consider it, but you are likely to arrive at the same apparently self-evident conclusion. You might think about this from the perspective of an employee who can readily distinguish between their effectiveness in an organisation where they had a great manager, and one where they most certainly did not. This might contrast, for example, the real drive and direction that a good manager provided, with the disengagement and poisonous atmosphere generated by a much poorer example.


Alternatively, you could think about it through drawing on your own experiences of being a manager, seeing the varying impact of times where you effectively managed your team and times when you, perhaps, failed to be as good as you could. The alternate results – in team effectiveness, ultimate productivity, team culture, etc. – are all likely to provide ready (if only anecdotal) evidence that good management practices can really make the difference.


Culture or recruits?


A further interesting angle to consider is how far an individual firm’s management culture is behind a higher quality of management, and how far this quality is supported principally by the people they recruit and retain in management positions. Harvard Business Review recently flagged up a new piece of research which concluded that the quality of an individual organisation’s management rests, to a large extent, on the quality of the people they actually recruit as managers.


The new paper by Blender, Bloom, Card, Reenen and Wolter, found that variations in organisational productivity rests, to a great degree, on the application of advanced management practices – such as goal setting and the use of incentives. Such practices were found to often be generated and mediated through the individual effort and decisions of employees. Where this effort relied on the employee’s skills and competencies, a correlation was then seen between firms that specifically hire higher-skilled employees, and their higher level of management practice.


Overall, the researchers found that workforce selection (targeting higher skilled managers) and pay practices aimed at incentivising these employees to stay, accounted for nearly 30 per cent of the measured impact of good management practices on the productivity of German manufacturing.


This appears to provide solid evidence for the importance organisations should place on the recruitment and retention of real management talent. It helpfully underpins something that many professionals would likely already believe to be true, and demonstrates how a focus on corporate strategy, culture and organisational design must be supplemented by a real focus on the organisation’s recruitment practices.
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