As our Simply Irresistible model shows below, there are five essential elements of employee success: meaningful work, supportive management, a humane work environment, growth opportunities, and trust in leadership. In this article (the second of five, you can read the first here), I’ll discuss the issue of management.
Fig 1: Bersin by Deloitte Simply Irresistible Model 
Let’s start by stating that every company needs managers. At the moment, there’s a debate about flattening organizations and the need to organize people into teams, but even in team-based organizations there are managers.
Managers typically have two roles: they manage people and they manage projects. In the 21st century organization, these roles are likely to be separate; project managers may or may not manage people. So you may have a “manager” who directs the team and makes sure things get done on time, but your pay, promotion, development, and coaching might come from someone else. At Deloitte we call this a “career advisor” and other companies call them “sponsors” or “people managers.”
In almost every research study we’ve done, executives tell us they want to build stronger leaders. This problem continues because every company is continuously promoting experts and high performers into management, and it’s a very hard transition.
As I like to explain it: moving into management is not a new job, it’s a new career. Suddenly your entire job is focused on getting things done through the work of others. Since most high performers are promoted because of their personal skills and abilities, the promotion to manager can be difficult. Thus there should be a continuous focus on the coaching, development, and careful selection of managers.
As Peter Drucker put it:
“In forty-five years of work as a consultant with a large number of executives in a wide variety of organizations – large and small; businesses, government agencies, labor unions, hospitals, universities, community services; American, European, Latin American, and Japanese— I have not come across a single “natural”: an executive who was born effective .”
From an employee’s standpoint, studies show that a weak manager can be one of the most difficult and problematic parts of work. Your manager directs your work, evaluates your performance, and has a large impact on your pay and daily sense of satisfaction. So you want a good one.
In our research we’ve developed a simple model which identifies four key elements of effective management. Let me walk you through them.
Clear Goal Setting
First is what we call clear goal-setting. Managers have to prioritize what gets done. In the industrial age, when employees were really “workers,” managers literally told people what to do. Today we live in an information economy and most of the decisions about what to do (and how to do it) are being delegated to employees. But even in a highly empowered company (which we discussed in the topic on autonomy in the first article), priorities have to be set. And every day, week, month, and quarter there are distractions – someone has to make the call on what to continue, what to stop, and what to invest in more heavily.
From your perspective as an employee, you want your goals to be clear. They should be small in number, clearly understandable, and easy to measure. This enables a sense of satisfaction that you know you’re focused on the right things and you and your manager are aligned on what good performance looks like.
In today’s always-on workplace strong managers are very good at telling you what NOT to do. In other words, a good manager should have the judgement and experience to say “don’t bother working on that” or “that project is not nearly as important as this,” giving you the sense of purpose we talked about in the first chapter.
How do you set and align goals? In today’s modern performance management process you should have regular (even daily) conversations. Many call this the weekly “one on one” or “check-in.” In the Agile movement this is the daily “standup meeting.” And with other companies it’s a manager who continuously walks around and talks to people.
The second element of supportive management is coaching. Good managers are good coaches. They listen to your needs, they support your efforts, and they give you just enough feedback to improve and feel good about your work.
They know that positive feedback is vital. Interestingly, studies have shown that high performing teams give each other five times more positive feedback than constructive feedback. (The “praise to criticism ratio.”) Why? It’s simple human psychology: positive feedback (“that was a very persuasive presentation” or “I love the way you carefully analyzed that data to give us a good analysis”) actually gives people positive feelings (research shows that when you “trust people” oxytocin is released in their body, making people more productive, energetic, reliable, and creative.) So if you’re a manager, make sure your “coaching” is as positive as possible.
We did a study in 2012 among more than 300 companies and found that companies with a “high recognition culture” (people are frequently thanked and appreciated for their work) have a 31% lower voluntary turnover ratio – which is a very big difference. Remember as a manager to say thanks, it is perhaps the most important motivational tool you have.
Right now there is an enormous amount of talk in HR about “feedback” and improving the “feedback system” in companies. Let me simply say that effective managers are lavish in their praise and stingy in their criticism. As anyone with children knows, the best coaching in the world is as positive as possible, and saves the criticism for a time when you know people are ready to hear it.
Investment in the Development of Managers
This gets us to our third area of management: a process of robust and continuous development of managers. Let me remind you that even for experienced leaders, management is not easy. It takes years of experience to become a seasoned manager, and every situation and people problem is a bit different. Companies that have great managers and great leaders spend time, money, and energy on continuously developing them.
Effective development of managers is about far more than a single management training program. There’s no “silver bullet” here. It really takes coaching, assessment, developmental assignments, and a whole culture of stewardship set from the top. It takes an investment in people mindset. In our model, for example (shown below), you can see that 75% of companies are doing the basics or standard things, and only one in four have a customized, scalable model.
Fig 2: Bersin by Deloitte High-Impact Leadership Model
These Level 3 and 4 companies, by the way, also spend money – they spend 200-300% more per leader on development and tend to see a significant return. Companies at Levels 3 and 4 in this study, for example, have 37% greater revenue per employee, 500% higher levels of innovation and ability to change, and are 10-fold better at selecting great leaders.
One of the world’s leading technology companies, for example, has four different leadership programs for its managers:
- Leadership for new managers
- Leadership for second and third line managers
- Leadership for managers new to the company who have been a leader before
- Leadership for VPs and above.
You as an organization should make sure you have a leadership model, a commitment from the CEO and all top leaders to help coach and invest in leadership, and a systemic program using some of the cultural and programmatic elements shown above.
Agile Performance Management
The fourth element of supportive management is the development of an agile, continuous performance management process. Over the last several years the HR profession has been on a journey to reinvent this process. The burdensome, manager-centric, end of year review is on its way out, being replaced with a process of coaching, check-ins, and data-driven reviews.
I won’t try to detail all our research in this area, but to make it simple: managers should be required to check in and discuss goals on a regular basis; they should have an opportunity to gain feedback and input from peers; individuals should have an open voice in their goals and aspirations; and the company should take on a “growth mindset” to make sure development, new projects, and growth is available throughout the year.
Fig 3: Continuous Performance Management Process
When managers are required to participate in a bureaucratic, top-down, forced ranking process once each year, they are not well positioned to coach people effectively. Forced distribution, a process developed years ago to help companies root out low performers, is also a problem. As I discuss in the article “The End of the Bell Curve,” managers should have the freedom to rate people as needed, and use multiple forms of input to fairly and transparently evaluate people.
Many companies have now reinvented this process and there are many new tools to make this easy. If your organization has not yet developed a continuous performance process, I urge you to read more on this topic and start now.
Supportive Management Takes Time
There is an old truism that “people leave managers, not organizations.” While we’re not sure that this is always true, it’s clear that great managers are one of the most valued parts of an organization. Companies need to think about management as the “muscle” of the company: strong managers help the company grow, they help the company adapt, and of course they create the culture that ultimately impacts product and service quality, competitive advantage, customer service, and profitability. This is an investment your company can count on to bring significant returns.
Stay tuned for part 3, where I will discuss the attributes of a “positive work environment.”