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Aug 05

Hire better managers

Vipula Gandhi, a Managing Partner at Gallup, has joined in the productivity debate with a new No Recovery report seeking reasons for the growth of USA GDP per capita (a measure of prosperity) having slowed from highs of 3% in the 1960s to only 0.5% now

He argues that:

  • A lack of major technological or scientific breakthroughs is thought by some to be partly to blame

  • Sectors such as education, housing and healthcare have been consuming economic growth while not providing better outcomes (a new one on me)

  • Digitisation and globalisation are having an impact – as is optimisation of the use of natural resources and capital

  • But all are complex and typically require large private and public capital investments

Gandhi thus asks whether there’s another way to boost productivity that costs significantly less

His answer?

Yes – Management

Managers no longer control and supervise processes and people – nowadays, when it comes to business problems, managers often don’t even know the answers – nobody does

Managers must hire people who are smarter than themselves and unleash them to do things nobody has ever done before – customers and employees no longer sit still and accept what they are given which means managers must be more flexible and creative when it comes to problem-solving – carrot-and-stick methods of motivation just don’t work anymore

Gallup then list factors that motivate employees:

THE PAST                                                  THE FUTURE

Paycheck                                                     Purpose

Satisfaction                                                 Development

Boss                                                              Coach

Annual review                                             Ongoing conversations

Weaknesses                                                Strengths

Job                                                                 Life

They conclude that workers are now motivated by much more than just a paycheck and job security – they look for meaningful work, genuine relationships and personal growth

And most of these things can’t be bundled into a perks and benefits package – they must be communicated and regularly reinforced by an engaging manager

Hence Gallup analytics find that 70% of the variance in team-level engagement is based on the manager – and three factors in particular:

  • Employee perceptions of the manager

  • The manager’s level of engagement

  • The manager’s talents

You can have the best performance management system in the world but it’s the person in the manager’s seat that matters most

And you can have the best employee experience strategy, but those who have the best bosses have the best experiences

So, if organisations want to improve productivity big-time, start with the transformation of management:

  1. Hire individuals with a natural talent for managing people – when companies do this, they can achieve 27% higher revenue per employee than average

  2. Train your managers into coaches – many are not ready for regular conversations, listening and feedback yet they are essential skills for talking with employees about performance and growth

  3. Drive manager engagement in order to drive employee engagement – employees who work for highly engaged managers are 59% more likely to be engaged

At present, however, 85% of employees are not engaged or actively disengaged at work

In the USA, the economic consequences of this are approximately $7 trillion in lost productivity

And if 70% of that number can be attributed to managers, then one solution becomes clear

It’s time to transform management for good

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