Managers Drive Engagement and Profitability
Gallup has studied the engagement and productivity of 27 million employees in more than 2.5 million work units over the past two decades. The quality of the manager accounts for a spectacular 70% of variance in engagement scores of work groups – the single biggest factor driving staff engagement. And in terms of performance impact, good managers account for 48% higher profitability to their organisations compared to average managers.
Yet Gallup finds that worldwide only 13% of staff are “engaged” and the most damaging reason is that quite often the wrong person is appointed to the role of manager.
This is a problem worth fixing.
The Wrong Fix
There are worrying signs of an emerging fad. Some people are suggesting the fix is in getting rid of managers. The influential Gary Hamel wrote an article in the Harvard Business Review (Dec 2011) titled, “First, Let’s Fire all the Managers”. And some organisations are being reported as doing so.
Take care, I suggest, of not being an early adopter of this idea. There are a number of flaws to the argument that organisations would be better off without managers:
- To put the case free of hypocrisy, these organisations will need to remove all leaders. Surely they still have an executive team? Surely they still have a senior leader and team in charge of manufacturing and sales and delivery. If they really believe in getting rid of all managers – that teams work best without a single leader – well they would do without the CEO as well. That’s obviously nonsense. So it must be that they don’t have a problem with leaders per se, it must be just at a certain level.
- One organisation was recently written up for their approach of no managers, yet the approach has only been rolled out to the HR team and to pilot groups. Hardly a resounding endorsement.
- What frustrations was the organisation facing leading up to this decision of going without managers? Maybe they are solving the wrong problem. How were they structured? Maybe they had a haphazard structure (very large or very small teams). With poor structures even the best managers can’t manage well.
- They are solving the problem simplistically without being prepared to do the hard stuff. The hard stuff is to appoint the right person and invest in their growth and to have systems to hold managers accountable for high engagement and productivity.
- If this fad gains traction and you start to seriously consider the option, you need to know what is it really like working in these organisations. And I don’t mean by talking to the CEO or HRD. Senior people are the designers of the system so are biased, even innocently, and they are not necessarily in touch with the reality of day-to-day work. You need to talk to people in the system – the staff – to find out what it’s really like working without managers. Their story might be quite different to the official story.
- If there are organisations that seem to pull this no-manager approach off, then they are the exception. There must be something extraordinary about their culture, probably associated with the style of the founder, that allows their approach to work. Do not fall for the “confidence before realism” trap of believing that it can be copied.
- As a social species it’s natural for humans to operate in dominance hierarchies. In systems without a formal hierarchy they will emerge informally which, like a school yard, can be dysfunctional and political and dangerously free of accountability.
The Right Fix
Given that we seem to get it wrong quite often, there is certainly improvements to be made in the way we appoint managers. The problem isn’t having managers or not, the problem is in who appoints the manager. The method that we have developed in the post-industrial Western world is that managers are appointed by senior people. We need to flip that and have managers selected by their followers.
The followers will rarely make the wrong call. They will select the person to lead them who will serve the team best – the right amount of energy, drive and care for people. The team won’t go for the overly passive leader who will lack drive and they won’t go for the tyrant who throws their power around.
Here’s how the process works. First, have a preference for appointing managers from within your organisation. People from within have absorbed the cultural standards and their strengths and weaknesses are known. The challenge with hiring managers externally is that they can appear to be a near perfect person at the time of hiring – you don’t really know them – and it turns out afterwards that they have the same ratio of strengths and imperfections as the rest of us.
Second, the senior manager with the vacancy should ask the team for their opinion of candidates that have expressed an interest in the role. Simply ask the team members who they prefer as their manager.
Third, let the candidates know that this is the process. The executive says to candidates that, “We will appoint the manager that the team wants to be their leader”.
Fourth, irrespective of whether the candidates are internal or external, the human instinct of gossip will serve you well. The team members will know more about the candidates than the top leader will likely know and the information the team has access to will be unfiltered.
Fifth, the message to the successful candidate is significant. The power relationship between the manager and the team has shifted right from the beginning. In the conventional approach the power is in the hands of the executive appointing the manager and the manager needs to mainly serve their patron (“managing up”). With the decision in the hands of the team, the power is now in the hands of the followers. The manager knows that “around here the focus of managers is serving their team” (“managing down”).
Sixth, there needs to be one further change. To keep the focus on the manager serving their team, add a question to your staff engagement survey: “If your manager faced a re-election to their role as manager, would you re-elect them?” Any manager who receives strong support should be acknowledged. Any manager just short of majority support continues in their role but needs help to improve their leadership effectiveness. Any manager with disastrous “polling” results should be moved out of the manager role at an early opportunity. The culture is quickly established that managers will not continue in their roles if they are not serving their team and ensuring a positive working environment.
By using human instincts and increasing the power in the hands of the followers we will establish a better focus on managers serving their teams and reduce the problems associated with making the wrong pick of who to appoint as manager.