The Chartered Management Institute (CMI) is the only chartered professional body in the UK dedicated to promoting the highest standards in management and leadership excellence. A recent report by the organisation argues that employers across the country need to focus on their “Purpose, People and Potential” to improve the UK’s long-term economic prospects and warns against what it calls ‘myopic management’. In our latest interview we discuss the findings of the report with Ann Francke, CEO of the Chartered Management Institute, to highlight the implications for business and government and the valuable new benchmarking tool.
Tell us some more about the report ‘Management 2020: leadership to unlock long-term growth’.
The Management 2020 report is the result of a major inquiry by the Commission on the Future of Management and Leadership, which was set up by the All-Party Parliamentary Group on Management and CMI to investigate how management and leadership in the UK will need to change by 2020 to deliver sustainable economic growth.
We heard evidence from academic experts, vibrant entrepreneurs, up-and-coming young managers and world-renowned business leaders. At its heart, what we found was simple but hugely powerful. Employers need to focus on three key things to improve the UK’s long-term prospects: how they define and manage their social Purpose, how they lead their People, and what they do to develop the Potential of the next generation.
You criticise ‘myopic management’ in the report. What do you mean by that and what danger does it pose to business?
The myopic management we criticise is the sort of short-termist approach that was exposed as so dangerous by the economic crash. One of the most dangerous elements of current management practice we found is the emphasis on hitting short term targets. That can lead to hugely damaging unintended consequences as employees do what they have to in order to hit the numbers, and scandals like mis-selling or rate fixing. It’s a sad fact that those who cut costs and overheads still seem to earn more respect than those who take the riskier, more innovative paths that lead to growth in revenue, profits and jobs.
We need to get away from our obsession with quarterly results. Companies like Unilever, whose CEO Paul Polman spoke with the Commission, have shown that it can be done.
How easily do you think some of the issues raised in the report, such as not sufficiently training new managers, for example, could be rectified?
Worryingly, but not unsurprisingly, there is a strong correlation between a lack of investment in training and poor company performance but this is easily remedied through organisations committing to train all staff before, or within three months of, being promoted into a management role.
Our evidence found that mentoring and coaching programmes are invaluable to supporting newly promoted managers. To start the journey, we’re encouraging managers to try out our Management 2020 Benchmarking Tool. This diagnostic tool will give you results that are benchmarked against a national database including over 2,000 managers, and identify key areas for improvement.
Do you think there is a long history of these types of management issues or do you think these issues have increased in recent years?
These issues are deep-rooted in many organisations’ cultures, but the reason they’re more important now than ever is that the world is changing rapidly. Generation Y and Millenials will make up three quarters of the workforce by 2025 which means different expectations of how they’re managed, new technology is transforming how we work, and we have to embrace diversity much more than before, to pick just a few trends.
What’s clear is that we have an urgent need to address this in the years ahead. One of the most startling facts the Commission found was that the UK labour market will need one million new managers by 2020 – yet 71% of the leaders surveyed by CMI confess they could do better at training first-time managers, or don’t train them at all. This could leave 150,000 employees a year taking on management roles without adequate preparation.
The report makes some recommendations for how government could help address this issue. What are some of the core suggestions here and which would you say is the most crucial?
The report recommends building employability into education, by encouraging schools at primary and secondary level to provide practical team-leading opportunities and experience enterprise programmes, such as Young Enterprise and Enterprise Advisors.
It also recommends employers expand annual reports to include both social purpose and broader people metrics covering employee engagement, diversity measures at all levels, job creation and educational activities. Employers could similarly be encouraged to report on a voluntary basis how they are engaging with education, providing work experience and the targets they are setting for recruiting young people and those returning to work from career break.
Tell us some more about the management 2020 Benchmarking Tool?
We developed the Management 2020 Benchmarking Tool for managers to rate their organisation against what the Commission found was best practice across the three key areas of purpose, people and potential. The tool provides instant results benchmarked against over 2,000 managers across the UK, helping highlight key areas for improvement. It’s available to use, free of charge, at http://www.management2020.co.uk
For more information on the Chartered Management Institute please visit www.managers.org.uk