Post-recession, management is currently an uncertain and volatile position to be in. Ruth Spellman OBE, CEO of the Chartered Management Institute has just launched her first book ‘Managers and leaders who can’, a guide to how managers can survive and succeed in the new economy.
The financial crisis, ensuing recession and last autumn’s spending review have left organisations in disarray, with their managers struggling to make sense of what has happened and what will happen next. While things have undeniably changed irrevocably, the post-recession situation we are now in doesn’t allow much time to sit and ponder where it all went wrong. Many people are working with smaller teams after restructures and slashed budgets following cost-cutting exercises, meaning they need to work more smartly just to keep their organisation going on a day-to-day basis. Despite these pressures, however, managers must ensure that they, and their businesses, learn lessons from what has happened over the past few years and that this learning informs our actions and decision-making from now onward.
Where are all the good managers? New Chartered Institute of Personnel and Development (CIPD) research recently revealed that three quarters of employers are struggling to fill vacancies due to a lack of skills. It’s a finding that chimes well with the CMI/XpertHR National Management Salary Survey. The report highlighted the urgent need for more candidates with good management skills and experience in particular. This shortage of good, qualified managers and leaders in the UK is something CMI has been warning employers, politicians and individuals about for quite some time. My fear is that this management skills shortage is tantamount to a hard kick when the country is already down, and will hold it back from recovery, making it increasingly hard for the UK to compete globally. Clearly action to redress this needs to be taken urgently and it will fall to HR to kick start this.
When I was writing my new book on this topic last year, I interviewed more than 30 leading UK businesspeople – including CIPD CEO, Jackie Orme, and HR directors – to get their views on the current state of management and how managers will need to behave and perform to succeed in the post-recession economy. The good news is what came out of this was actually very positive. Yes, things have been incredibly challenging and there may well still be tough times ahead, but my interviewees were in agreement that, if managers and leaders learn from what the financial crisis and resulting downturn can teach them, organisations stand to gain. So, what are the key lessons and what do they mean for managers? The issues identified fall into the following themes: taking a values-driven approach to management; flexible management styles; and, developing a diverse management team.
The recession has exacerbated the public’s mistrust of big business and politics. MPs have betrayed them by fiddling their expenses and their hard-earned taxes have been used to bail out the risk-happy banks that caused the financial crisis in the first place. To succeed in the new economy, therefore, companies will need to demonstrate that they are taking a different approach. Transparency, accountability and ethical practice must all move much higher up the management agenda than they have ever been in the past. This applies to all sectors; accountability is no longer just something for civil servants handling publicly funded budgets to worry about. A values-driven approach should be at the heart of everything managers and leaders do and this will only happen if it’s led from the top and masterminded by HR. But, they also need to walk the talk. Take the example of BP, which proudly states on the brand values page of its website that it is ‘progressive, responsible, innovative and performance driven’. I’m not sure those who observed the Deepwater Horizon crisis would agree with the second of those. Practising what you preach has never been more important.
For many businesses, starting to work in a more values-driven way may involve some reflection and analysis of their current organisational values and how these currently play out, or not, in its operations. Values must be communicated clearly to staff members – it’s a cliché but they need to live and breathe the brand. Suppliers should be next. One particular challenge is putting frameworks in place to help organisations monitor their ethical performance and to communicate openly about the way they work. If there are no skeletons in the closet, they can’t come back to haunt anyone.
Evidence shows organisational values are key to engaging both employees and customers. In fact, the most productive, loyal employees and customers are those who feel their personal values resonate with the values of their employer or supplier. Think about how things like your pay and rewards strategies fit with your company values as well as considering them when recruiting. Is the person sitting across from you a good fit for the company in terms of values? If not, both they and the organisation aren’t getting a good deal. There is a direct correlation between how engaged employees are with their employer and organisational performance, yet employee engagement levels are lower than ever. So low, in fact, that the Government formed a taskforce, on which I sit, to tackle the issue. Managers should look on a values-led approach as a useful weapon in the battle to re-engage the workforce.
In turbulent times, a strong and well-practiced set of values and ethics can be a guiding light for managers. A manager faced with decisions about cost cutting, for example, should look to the organisation’s values before making any decisions. If you are well known for the way you treat your staff, cutting people may not be a good option. Likewise, an enterprise which prides itself in doing right by its customers should talk to them before pulling certain products to save money.
Every manager is stronger in some areas than others and each has a leadership style that comes most naturally to them. However, rather than there being one management style most suited to succeeding in the new economy, it’s becoming increasingly important that leaders are flexible, learning to adapt their management style to suit the myriad of circumstances they find themselves in. The managers that perform best are the ones that know which management style is right for a particular situation and can adopt that style. Managers need to devote sufficient time and attention to developing self awareness and enhancing their personal toolkit of skills and competencies. The developments and shifts in the way businesses must be run that have taken place over the last few years may have left a gap between a manager’s competencies and what they now need to be able to do. If so, it’s wise to seek out some training or coaching. Similarly, in companies that have undergone restructures people may have been promoted to management positions, following the departure of their own manager, but not have been trained for the role. These training gaps need to be addressed.
Much of what happened during the financial crisis reflects the target-driven culture that emerged during the boom years. To ensure businesses continued to grow and keep ahead of the competition, ever-higher targets were set in a bid to motivate employees into achieving corporate goals. During the downturn, targets were set for survival, rather than for growth. Of course, we all need appropriate targets of some sort to work to, but I would argue that in the new economy managers need to be much more proactive in setting standards as well. The important difference between these two measures is in the language. A standard requires work of a certain quality, whereas targets often involve doing the minimum necessary to hit the right number. Rather than assigning arbitrary targets which are often meaningless to the people putting the work in or on the receiving end of your product or service, managers need to translate what the senior team wants to achieve into outcomes that employees can actually deliver and that mean something to customers and stakeholders.
Faced with an acute shortage of good managers, employers need to acknowledge that it is finally time the management community became more diverse. Only by opening themselves to so-called ‘non-traditional’ managers, female managers, younger or older managers and managers from different socio-economic and ethnic backgrounds – can employers exploit and embrace the diverse talents in their workforce. Effective management of diversity is one of the most difficult and uncomfortable issues for managers to deal with. The reality is that society has evolved but workplaces are lagging behind, clinging to rigid ways of working and promotion and recruitment structures that mean talented people are being overlooked. Unfortunately, diversity has become wrapped up in human rights, the political agenda and prescriptive legislation which is misleading and has made the area confusing for employees. It’s here that responsibility again falls to the HR function to set the record straight. Yes, people must be treated fairly, but the point is that businesses must be efficient and successful and this involves getting talented employees on board and developing them, regardless of their age, gender or background.
Managing in the new economy presents a host of new challenges for the modern manager, but, if managers can take what they have learnt from the tumultuous past few years and adjust their practice accordingly, I’m convinced that they can succeed. Revisiting and re-integrating values into management behaviour and decisions, broadening our management teams to include talented individuals from a range of backgrounds and developing flexible, circumstance-specific styles of managing are just some of the lessons that must be taken on board. The management job just got a whole lot more complicated, however, the rewards for organisations who help their people surmount the challenges will be immense.