Productivity is being hampered by armies of powerless executives
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What are the barriers standing between organizations and the successful execution of their strategies in 2016?
The Chartered Management Institute’s (CMI) latest annual Future Forecast asked 1,000 UK managers about their priorities and the challenges for the year ahead. The UK is suffering from sluggish economic productivity compared to its international peers, so we asked managers what was holding them back. Top of the list was bureaucracy, cited by 30%, followed by business culture (27%) and outdated technology (22%). The top five was completed by stress (21%) and bad management (18%).
That’s a potent mix of challenges, strong enough to sink the best business strategy. The list raises important questions. With many UK businesses sitting on significant cash reserves, has there been sufficient investment in infrastructure and technology? Clearly, many managers think not. Has enough been done to invest in skills? Again, managers would say “no”. Their top five New Year’s requests of their organizations were to improve management and leadership skills (31%) and to change the culture (25%), followed by calls to invest in technology, people and skills more broadly and to reduce bureaucracy.
Besides investment, what else ties together these concerns? One answer is management and leadership competence. At a macroeconomic level, the latest analysis of total-factor productivity from the OECD re-emphasized the importance of management and leadership. In effect, our research shows that macroeconomic analysis in microcosm.
Intimately linked is the question of how management shapes culture. A major dimension emerging from across CMI’s research is the question of empowerment.
Only around 40% of managers feel empowered to make decisions – which raises a big question about what the other 60% are ‘managing’. The most common New Year’s resolution among managers was to “make more use of my talents”.
The overwhelming impression from these results is that too many organizations are wasting the talents and enthusiasm of their people, choking employee engagement through heavy handed bureaucracy and outdated command-and-control management cultures.
The antidote has to lie in empowering employees and giving them the autonomy to do their jobs effectively. That means reviewing job design, accountability and performance management.
When Deloitte announced a move away from annual performance appraisals, it calculated managers had spent two million hours a year creating performance ratings. Providing more frequent and timely performance feedback reduces bureaucracy and promises to make performance feedback more effective.
Other smaller changes are no less important to the employees involved. For example, giving a retail or contact-centre operative permission to address customers’ concerns without reference to a manager, or granting a middle-manager more decision-making and budgetary responsibility.
Of course, such autonomy has to go hand-in-hand with a genuine commitment to investing in skills, giving people the capacity to deliver on what’s asked of them. Without that, an employer’s newfound commitment to autonomy and accountability will ring hollow and flounder. Get the formula right, however, and employees will respond with more discretionary effort and pride in their work.
Patrick Woodman is head of external affairs at the Chartered Management Institute