Why You Must Build Management Capability

By Edie Goldberg

Nov. 13, 2007

In the past, organizations have clung to the belief that as long as they had competitive products and services, they could enhance their performance by hiring strong leadership and top talent. While this focus has worked in some cases, in today’s highly competitive labor market—and yes, it is going to get much worse—organizations competing for top talent may be missing the essential managerial skills and processes needed to succeed over the long term.

Today’s Generation X employees have much higher expectations of what managers should do to support them compared with the prior generation. Furthermore, the new entrants into the workforce, known variously as Generation Y, Millennials or Generation Next, have still greater needs for immediate feedback and development. These young workers are accustomed to praise, reinforcement and time to develop their interests and skills. How can organizations capture and retain this new talent, as well as slightly older up-and-coming leaders?

Research suggests that most organizations neglect the role of managers, undervalue it and therefore suffer from a lack of strong management capability. A 2006 survey from BlessingWhite indicates that employees who plan to stay with their current companies are twice as likely as employees who say they might or might not stay to report that their managers recognize their talents and encourage them to use those talents to the fullest extent.

I would say that the trend that is emerging is not pretty. Today’s managers are also individual contributors and they spend more of their time doing their “real” jobs—technical aspects of their positions—than they actually spend managing their employees. This behavior poses a problem because today’s employees want more from their managers and workplaces, not less. And they are willing to walk out of your workplace if they don’t get it.

While employees are hungry for praise and eager to get help expanding their capabilities, there is, unfortunately, a corresponding capability gap among managers to give them what they need. This deficit exists for many reasons, including:

Years of downsizing means companies expect more from fewer employees. There simply is not enough time for managers to devote to mentorship and employee development.

  • Insufficient skills. Managers don’t know how to provide feedback and develop people.

  • A dearth of rewards. Managers are rewarded based upon individual contributions and achievements, not their management skills.

  • The mistaken belief that “one size fits all.” The same rewards approach won’t motivate everyone.

  • Organizations do not place a high enough value on the role of the manager.

Employees don’t leave companies; they leave their managers
   Employees want managers who will provide goals and direction, feedback and coaching—and who recognize and reward them for good performance. Yet research indicates that managers are not delivering on these expectations. One possible reason is that managers’ roles are not designed to focus on managing people. Most managers spend 90 percent of their time on technical and administrative tasks and only 10 percent of their time on activities related to managing and developing the people who report to them.

There is a wealth of research indicating that management behavior is a key factor in retention. This is nothing new. In 1968, Frederick Hertzberg published his seminal work on what motivates employees. This research showed that satisfaction with one’s direct manager is not a satisfier, but it can be a major source of dissatisfaction—and thus, turnover. Recent research has consistently shown that dissatisfaction with one’s manager is a top reason for leaving the organization.

More recently, three different research studies—from the Hay Group in 1999, McKinsey & Co. in 2000 and Towers Perrin in 2003—examined the factors that predicted whether employees would stay with or leave their current organizations. Some of the most commonly found items predicting intention to leave were:

  • Insufficient feedback and coaching.

  • Insufficient learning and development opportunities.

  • Insufficient reward and recognition for their work.

  • Insufficient sense that their organization values them.

Management is responsible for delivering on each of these job factors. No one else can affect how an employee feels as dramatically and tangibly as an employee’s immediate manager. The most effective managers are those who know their employees’ strengths and development needs so well that they know which assignments to give based on balancing both organizational needs and those of the employees.

Coaching and feedback make up one area that is receiving the most attention in organizations today. Employee survey results in company after company are showing that employees want and expect feedback. Research conducted with Gen Xers tells us that this age group not only expects feedback from their managers, but demands it. The Millennial Generation is even more voracious in its need for coaching and input.

Finally, people want to know that they are appreciated when they do a good job or put in extra effort. Good managers praise employees in ways that raise self-esteem and commitment to the organization. Poor managers just expect it all, and, as a consequence, praise nothing. What they really get is turnover, and lots of it. And then they get less productivity out of the people who do stay.

Actions to take
   Doing the bare minimum of training and development—just enough to keep your organization within the law, and to keep from being sued—can easily lead to behaviors that damage companies’ reputations. Once damaged, a reputation takes significant time and money to restore. Some companies never really recover. Before find yourself in a position of losing top talent or dealing with a weakened organizational reputation, you can invest in processes to improve the management capability in your organization.

Human resource leaders are in an ideal position to influence all the elements needed to change the role of managers and to help their organizations build management capability. Many elements are needed, of course, but the first is the sponsorship of the most senior leaders to ensure buy-in and demonstrable support for the process. The rest of the elements involve your organization’s beliefs, values and culture. All of these are levers for change and are necessary to reinforce norms and expectations.

Click here to view a model that demonstrates what can be done to achieve maximum value and performance from your managers:

Building management capability goes beyond training. It includes transforming the organization’s culture so that it values the role that management plays in attracting and retaining top talent and setting forth clear expectations for the manager’s role. As this model indicates, all organizations have an underlying set of beliefs about the importance of the manager. Organizations that have strong management capabilities believe that managers are critical for their ability to attract, retain and motivate employees. Strong beliefs influence the values of an organization, and consequently, culture.

Each of the levers of change in the model represents an area that organizations must consider if they want to build strong management capability. Just focusing on one lever of change will not bring about lasting change in management capability; the current culture will overwhelm small changes. By focusing on numerous change levers, organizations can modify the culture and create long-term change. Briefly, the levers represent the following considerations:

  • Leadership: An organization’s leadership must both believe in the value of the role that managers play and must lead by example.

  • Communication: The leadership team must consistently communicate the importance of the role of the manager to the organization and its ability to achieve high performance, attract talent and retain it.

  • Competencies: Management competencies must be assessed and developed. Entry into a management role must be predicated on an appropriate, although not necessarily perfect, set of skills.

  • Measurement and rewards: Any effective strategy must be integrated into the scorecard. It must be measured and rewarded.

  • Structure and symbols: The role of a manager must be structured so that the manager can spend sufficient time with direct reports. The term “manager” must mean something in terms of role expectations.

By focusing on these levers of change, the organization will develop new norms and expectations for behavior. The organizational beliefs regarding the management role will actually conform to what the levers of change are encouraging: a belief that managers’ roles do make a difference.

Leadership first: showing the way
   Levers for change begin with leadership. Leadership sets the tone and shows the way. How your leaders think will cast the mold for the rest of the organization.

It must be clear to others that your organization’s leaders believe that management capability is an asset worth time and resources. Where leaders demonstrate this through their own behaviors, the organizations will have corresponding success. Having leaders publicly recognize individuals for outstanding team management (as opposed to personally exceeding business goals) will set the tone for the importance the organization places on the role of the manager in delivering results.

When leaders spend time with their direct reports, setting clear goals and expectations, providing feedback and actively working to build bench strength in the organization, they are setting expectations for how others will act. Take Jack Welch during his GE days. He spent a great deal of his personal time both developing his own successor and developing leadership capability throughout the organization by participating the GE’s management development programs. As a consequence, GE is constantly cited as having one of the best leadership development programs in the world. This happened because the senior leadership believed in the value of its leaders and made investments to insure they could deliver their maximum capability.

Also, leaders are the ones who primarily create an organization’s fundamental beliefs, values and culture. Where leaders go astray, organizations often follow. Creating a powerful culture takes time. But leaders can play a powerful role in establishing the outward signs of culture and behaviors that they both embody and endorse.

Communication: keeping everyone on the same page
   Organizations tend to undervalue communication. But communication plays a powerful role as the vehicle through which leaders demonstrate and publicly recognize the desired behaviors in the organization. How leaders talk about managers sets a clear message for what is expected in the organization. Strong communication systems can help organizations build strong cultures and enhance performance.

Competencies: The essential building blocks
   Identifying the critical competencies that make managers successful in your organization is the first step in creating the new manager role. New managers who are hired and current employees who are promoted into management roles must be selected because they have the capability to deliver on key functions of this role. These competencies include such skills as setting goals that fit the business strategy, providing coaching and feedback to others and helping employees understand how they fit into the big picture.

Often promotions are given because someone is a good individual contributor. Good technical skills are a far cry from good management skills. We need alternative career structures if the only way to move up in the organization is to become a manager. Not all great individual contributors make great managers. By having management competencies defined within an organization we can also coach and develop individuals on how to improve in these specific areas.

Measuring, rewarding and reinforcing
   It’s a cliché, but it’s true: That which gets measured and rewarded gets done. If you don’t include management competencies and results for such areas as reduction in turnover or developing staff to improve organizational bench strength in performance appraisal systems, managers will not focus on these issues. Organizations that reward their managers for being good managers will stand the greatest chance of building strong management capability over time. Rewards do not need to take the form of money. In fact, simple public recognition of strong management skills sends a message to the rest of the organization: Managers are important to us.

Organization structure: the key symbol
   When organizations design jobs so that managers must spend 90 percent of their time doing non-management work, we send a very clear message about how we view the management aspects of a manager’s role: They are not important. We need to redesign organizational structures to support managers so they can truly manage the talent within the organization.

By involving your leaders, crafting key messages, developing managers and examining the current messages managers receive about their role in managing others, HR leaders can change how managers are viewed, and how they view themselves.

The process of building better managers is not fast or cheap. But the rewards can be substantial and well worth the effort.

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