Skills gaps are rife, but more than just an issue of recruitment and staff retention, too many employees are under-performing as organisations fail to provide them with adequate support to grow the business.
Given the huge national and corporate investment in building management and leadership capabilities, questions about the effectiveness of development activities are valid, necessary and urgent.
There has always been an implicit belief that management development works, and the government has also clearly recognised the importance of the management agenda; a point made clear in various reports published by both the DTI and DfES.
But despite the rising profile of solid management practice, accessible evidence of the direct links between management development and organisational results has remained elusive. While many organisations recognise the benefits of investing in management and leadership development (MLD) at all levels, this recognition is still insufficiently widespread.
But the results of an eight-year study, conducted by the DfES and the Warwick Institute for Employment Research, could provide business with a compelling reason to make management development a priority.
Published last month by the Chartered Management Institute, the study provides new, substantive evidence of the links between organisational performance and investment in management development.
The report, Management Development Works: the evidence, is based on detailed interviews with 500 HR and 500 line managers and offers a unique insight into changing patterns of MLD across organisations of all sizes.
But it also succeeds in quashing some of the myths and misconceptions that have held back many businesses from investing in management and leadership development.
Myth 1: leaders are born, not made
For a long time the belief has persisted that inherent ability and personality were the all-important ingredients for great leaders. But, in 2004, for the first time this ‘leaders are born, not made’ approach has been eclipsed by job experience. According to the Chartered Management Institute’s research, good managers are developed primarily through the experiences they gain on the job and in the workplace.
The message is clear. Don’t simply rely on employing individuals because they show signs of leadership qualities. That’s not to say people who exude confidence and who ‘have a presence’ should be overlooked, but it is important that organisations recognise that managers can be groomed for leadership in the future.
Take the ‘NHS Leaders’ programme as an example. It puts career development and succession planning across the NHS on a more systematic and professional footing.
It came into being from recognition that the service needs more leaders – clinicians and managers – who can take advantage of the greater local freedoms opening up after the Commission for Health Improvement underscored the connection between effective strategic leadership and high quality patient care.
Myth 2: employees are responsible for their own development
In the recent climate of budgets cutbacks, there is an increasing belief that employees who want to improve their future employability prospects should turn to outside providers for out-of-hours development.
These courses often lead to professional qualifications that, ironically, benefit employers. But the research shows that employer responsibility for MLD is now being rated more highly. On a 10-point scale, HR managers scored seven when asked about the priority they attached to staff development, and this has climbed significantly since 1996. It is interesting that many organisations are now taking higher proactive responsibility for the development of their managers.
The result is that organisational performance has improved over time where MLD is driven by strategic business needs and the skills requirements of individuals.
Where it is a knee-jerk response to a crisis, or piecemeal in its delivery, the effect is, however, significantly reduced performance.
Myth 3: It’s impossible to measure the impact of learning
Many organisations conduct training based on the implicit belief that it is beneficial, rather than quantifiable evidence. But as anyone with the responsibility for signing off a balance sheet will tell you, supposition is not enough. After all, why invest if you are not sure about the return?
It’s also a misconception to say that the impact of management training impact cannot be assessed. HR managers rate most highly the connection between MLD and the achievement of business objectives and profitability. They do accept that these links are difficult to measure, so focus on customer satisfaction and productivity.
It’s interesting to see that since 2000 these two methods have gained in usage. The implication, then, is that rather than invest blindly, you should find a quantifiable indicator that MLD can be linked to in your organisation’s goals and use it consistently. And only once you have sufficient long-term data can you truly track results.
Myth 4: MLD is a low priority outside of HR
It is often assumed that MLD within an organisation is the province of HR teams alone and that they are the only ones responsible for initiation, implementation and follow-up activity. As if to emphasise the point, during the past four years there has been a decline in the number of line managers involved in implementation – from 30% to 15%. This all too often leads to the perception among employees that the MLD is not regarded as a high priority – how can it be if their immediate manager wants little involvement?
The reality, however, is vastly different. Indeed, almost half of UK organisations now have a written policy on management and leadership development, together with a dedicated budget. And many employers are now taking more responsibility at a senior level for employee development. In 2004, 51% of CEOs or boards were directly responsible for initiating MLD policy, compared to 43% in 1996. Senior involvement in implementation stands at 24%, an increase from 15% in 1996.
So it remains a concern that these messages from the top team do not always reach line managers. Future leaders need to see that their bosses recognise the importance of MLD and the evidence suggests that organisations are moving in the right direction.
It’s fair to say that there is some way to go, but the activity to date shows that MLD does have a clear priority.
Myth 5: it’s better to recruit than to train
Chelsea FC’s manager, Jose Mourinho, is in the fortunate position of being able to add almost any footballer he chooses to his squad of players. There is an argument, therefore, that Chelsea can buy its opposition rather than beat it. But this ignores the fact that talent still needs to be nurtured, and it is with this in mind that HR managers are increasingly likely to adopt policies of internal growth to develop their management capability.
In fact, many HR managers have realised the benefits of a combined policy. In 2004, 61% employed a dual-focus of internal growth and external recruitment, compared to half that number in 2000. The message is clear – if you want to build a robust team, recognise that you can’t just buy it. You need to take into account the fact that team spirit affects performance and takes time to be established.
So don’t go for one extreme or the other, but rather a combination of the two.
Myth 6: formal training is better than informal
There is a discrepancy between HR managers and line managers as to what constitutes effective development, with the argument focusing on the benefit of training courses against on-the-job learning.
In essence, the most effective organisational learning often takes place where there is a culture of managers learning from their colleagues. The aim should be to balance theory with practice. You can see the value of this approach if we use auditing as an example.
It’s possible to learn the workings of double-entry in a classroom, but having the chance to balance accounts in practice serves to reinforce what people are taught.
The key, for individuals, is to strike a balance. Much depends on how your organisation defines ‘formal’ development, but whatever the answer, the important thing is to make it relevant and to allow yourself the opportunity to benchmark against like-minded organisations.
Make sure your management and leadership development programme is linked to the new national occupational standards for management and leadership (www.management-standards.org) and identify ways in which your managers can be formally recognised for the management activities they undertake.
Myth 7: training and development is always beneficial
Average spend on development per head stands at £1,120, according to the HR managers surveyed, and generally they feel that it is money well spent. But just because an individual has a particular skill weakness, it doesn’t necessarily follow that formal or informal development will always be of benefit – to them or their organisation.
To identify the right development programme, it is important to understand the extent to which it can be linked to the strategic direction of your organisation. In other words, MLD should not be arranged on the basis of knee-jerk reactions.
To get true value from MLD you need to create a performance index for your organisation. What do you want to improve? How can you judge, further down the line, whether improvements have been made? If you can answer these questions you will be able to demonstrate that management development is a valuable investment.
The most successful businesses take management development seriously, creating a culture of continuous learning and development. The greatest benefits are reaped by implementing MLD in a coherent and strategic way, rather than the piecemeal approach of ‘training for training’s sake’.
But for MLD to work effectively HR managers need to work closely with those ‘on the ground’. It’s only when there is closer co-operation that business needs can be identified and myths exploded.
And when that happens, there will be the clearest indication yet that management development works.
Mary Chapman is chief executive of the Chartered Management Institute.
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