Major
new research describes management and business leadership development in the UK
as ‘a dysfunctional system’. Simon Kent reports
The
findings of a two-year study across the public, private and voluntary sectors
paint a bleak picture of the management development industry’s ability to
deliver managers and leaders to meet existing needs, let alone UK industry’s
future needs.
Carried
out by the Council for Excellence in Management and Leadership (CEML) the
survey describes management and business leadership development in the UK as
"a dysfunctional system" and believes the failure to nurture or value
top management skills is holding back overall economic performance.
When
it comes to ‘dealing with work problems’, 24 per cent of managers are poor; 30
per cent are poor at ‘keeping every one up-to-date about proposed changes’; and
there is still prejudice within the management talent pool, with managers
accounting for 18 per cent of male employment but only 9 per cent of female
employment. And only 2 per cent of FTSE 100 company directorships are held by
ethnic minorities.
The
report also found that although the number of non-vocational and vocational
qualifications is rising among managers, dissatisfaction with the skills held
by company leaders persists.
CEML
chairman Sir Anthony Cleaver says there is no single area that could be
addressed in order to improve the situation, and the final report, Managers and
Leaders: Raising Our Game, addresses the entire supply and demand chain for
development.
The
report recommends not only seeking to improve the standard of training offered,
but generating improved demand among firms and individuals. Without this twin
approach there will be no incentive for training providers to address the
resources currently offered. And while the principal of Henley Management
College and a member of CEML’s Council, Professor Stephen Watson, admits an
aversion to quangos, CEML concludes that it is imperative that a new strategic
body be created to direct and co-ordinate activities to improve management
talent.
"There
is no single body concerned with this issue that has an uncluttered
agenda," says Watson. "We need to look at the chain of causality in
this area and none of the existing bodies are constituted to do that without
being in conflict with their primary purpose."
The
majority of CEML’s recommendations signal work ahead for government bodies,
professional associations and business schools. But independent HR functions
must address their own role in the current dysfunctional system if the UK is to
generate top management and leadership talent for the future.
Four
barriers to better management
1. "…many organisations think that evaluating their investment in
management and leadership is desirable, few either do it or know how to go
about it"
CEML
notes that while business failure, low productivity and customer
dissatisfaction is blamed on bad management, investment in management
development is not understood or analysed as professionally as other business
indicators.
The
CEML Toolkit, developed with the help of the Centre for Business Performance at
Cranfield, proposes a number of measures which can be recorded and analysed to
indicate management and leadership capability. These indicators come under
broad headings such as morale, motivation, and long-term management development
and are based on data including absenteeism, turnover of managers, employee
satisfaction and training spend per employee.
Professor
Andy Neely of Cranfield believes this data is important for internal and
external use.
"Measuring
this capability is about performance review and performance planning," he
says. "If you have the right measures in place you will stimulate the
right kind of discussions and see how better to manage the business."
On
the external side, Neely argues there is increasing demand from investors and
industry analysts for clear information on all aspects of company operations:
"There is a growing recognition that it is the non-financial elements of
an organisation that determine financial performance."
Unfortunately,
organisations not only forgo the potential performance enhancement this
information can bring, it appears some are simply unable to collect the
necessary information.
"It
is surprising how many companies do not have good absenteeism data or employee
satisfaction information," says Neely. "One company was recording
absenteeism, but only 40 per cent of those who were absent ever returned the
necessary form."
In
some cases it may be that HR management needs to improve substantially before
management can be competently measured and developed.
2.
"Evidence shows that a structured approach to management and leadership
development, linked to the organisation’s strategy, produces better results.
Yet many organisations neither have a written policy statement, nor a budget to
match it"
With
the battle for HR recognition at board level still ongoing, the absence of a
policy linking people management to the direction of the company would seem a
fatal flaw.
There
are infinite resources and case studies explaining how this link can be
achieved, not least CEML’s own Leadership Best Practice Guide launched in
September last year.
Raising
Our Game highlights the role of organisations including the DTI, the Chartered Management
Institute and Investors in People, in promoting awareness of this strategic
link. However, the report also finds that "a significant number of
individuals exercising management responsibilities at all levels in
organisations are not receiving management training and development
opportunities", suggesting that HR is even failing to ensure the right
person is in the right position with the right skills.
"Large
companies should carefully study examples of best practice and take on board
the appropriate lessons," says Watson. "HR must look at what it does
and why it does it."
This
task should become easier if CEML’s recommendation for the identification and
promotion of Centres of Excellence in Management and Leadership development is
realised, but Watson is aware that if organisations and individuals are to
value management education in this context, there needs to be greater structure
to the training qualifications.
"There
is a clear need for a more coherent structure which allows someone who knows little
about management education to understand what is available and what is
appropriate," he says. "At the moment it can be difficult to know
whether to take an MBA, a certificate of management competency or a CIM
qualification."
3.
"The confusing plethora of government-funded initiatives for small firms,
estimated by the Treasury to cost more than £600m, appear to be driven by
government agenda and funding rather than by direct demand from
entrepreneurs… there is a crucial absence of demand-led solutions that reflect the needs of the entrepreneur"
CEML’s
view on small firms is that managers and leaders in this sector are usually far
too busy running their companies to take up training and development
opportunities. However, since businesses employing fewer than 50 employees make
up 99 per cent of all businesses and contribute 37 per cent of UK turnover, it
is clear that steps must be taken to raise the skills of managers in this area
as well.
"There’s
no point addressing workforce development in SMEs unless you engage
owner-managers in their own learning," says Sarah Anderson, chief
executive of the Mayday Group and CEML Council member. "And you do that
not by flogging qualification-based learning but through informal means –
networking, skill swapping and non-executive directorships."
CEML
has created BITE (the Business Improvement Tool for Entrepreneurs) a
non-technical questionnaire providing needs analysis for SME managers.
Crucially for Anderson, BITE does not lead the manager into the path of formal
education – for which they have little time and which may not even be relevant
– but stimulates demand from a variety of resources.
While
SMEs are certainly a special case – frequently without a dedicated HR function
and no resources for performance appraisals – this model of just-in-time skills
development and knowledge transfer from diverse sources could also prove useful
in larger companies. In addition, large companies have a role in supporting
their smaller contemporaries by acting as one of the available training
resources.
"Large
companies such as Ford have done fantastic work," says Anderson,
"They have invited local SMEs to learn alongside their own people. That
has been part of a regeneration agenda, but it is also a very important part of
knowledge transfer."
4.
"…despite the scale of the management development industry, it is not
adequately meeting the current need for more and better managers and leaders,
let alone future needs"
It
is all too easy for companies to hide behind the argument that business
schools, universities and training resources are failing UK industry. Employers
not only have a duty to provide these establishments with a clearer view of the
skills they require, but they must also be actively involved in developing education
resources and knowledge transfer throughout the wider management community.
The
report notes that large employers tend to have the resources to solve their own
training issues regardless of the marketplace: "If you are big enough you
can build something to suit your needs," says Cleaver. "The problem
is for medium-sized organisations, where there is a mismatch between what
companies want and what the suppliers deliver."
The
report outlines a number of ways in which this gap can be filled, not least
through the creation of a National Forum, where employers and providers would
discuss ways to improve supply. "The HR function needs to be aware of that
discussion and I would think they are the people to represent the employer at
the Forum," says Sir Cleaver.
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The
existence of the report in itself provides an opportunity for stakeholders in
UK management to address the problem of skill shortages in a practical and
effective way. However, Cleaver notes that at least one of the report’s
recommendations is only now a possibility thanks to business internet use.
"We
want to see an online sign-posting system developed," he explains.
"The system would be used by individuals and HR to locate appropriate
training and by suppliers who would post details of courses available."
Ambitious, expensive and dependent on accurate information, the system would
mean company e-learning systems could key into external as well as internal
resources. "The opportunity is certainly there," says Sir Cleaver,
"And it is an opportunity that did not exist a few years ago."
