Is Management Quality really important?

All enterprises or other organizations with competition and/or pressure to reduce costs must find means to improvement, that continuously give customers, clients and other stake holders more value for money. The most common way is to simply cut costs, which directly hits the employees and indirectly the customers.

In the area of management there is a great, unexploited area for improvement. Such improvement has a direct and positive impact on results. Those organizations that are pioneers in using this opportunity will create greater value for customers and clients, a better working environment and competitive advantage.
There are no real arguments for not taking advantage of this opportunity.

Management Quality - is there need for improvement?
Consider the following illustrations as "evidence":

Evidence 1. I have conducted benchmarking studies in more than 10 major Nordic and multinational organizations representing industry, commerce and government. On a 1000-point scale for management quality these enterprises end up in the 350-550 interval. The study includes companies with an excellent reputation in the areas of general management and human resource management. The conclusion is that even those that are considered leading edge today have substantial room for improvement -and there are thousands who are lagging far behind.

Evidence 2. Ask any group of employees if, during the last year, they have observed examples of lacking management quality, which have directly and negatively impacted the performance of the organization. Almost all hands come up.
Then ask how many who, during the last three months, personally have had such negative experiences, resulting in decreased motivation or possibility to do a first rate job. About half the group will confirm this.
Evidence 3. Consulting companies have conducted studies, reported in the press, indicating that variations in management quality result in productivity differences as high as 25 %.

Evidence 4. Other calculations show that the value of good management quality, as compared to poor quality, is 1,8 MUSD per year in a marketing group of 10 people. Corresponding numbers for a manufacturing group is 0,3 MUSD annually, and for an administrative group 0,2 MUSD.

Evidence 5. In hundreds of interviews with employees and managers I hear statements like:
"Personnel policy is non-existent in this division. I am not making an effort anymore"
"Decisions are taken and orders are given, but everyone does whatever he likes to do. There is no follow-up, no questions asked."
"You cannot trust top management. Decisions are often reversed, without explanation. I am not motivated to act strongly and promptly", said one manager.
Each of these and many other statements are real-life examples of the negative impact on business of poor management quality.

How good is your Management Quality?

"How good is the management quality of your organization?"
When I ask this question, most often I get an answer. But the answer varies from one person to another, and is based on subjective impressions and feelings. In some cases, reference is given to Personnel surveys. Such surveys, at best, give an indication of how the immediate manager is perceived, and only from the employee perspective.

The Management Quality benchmarking mentioned above is a continuous project, all the time open to new participants. The result is a comprehensive review of the management quality of the organization, a detailed list of identified potential improvements, and sharing of best practices with interesting organizations.

You can make a first estimate by making the simple Self-assessment, below.
(It is designed for senior and Personnel management. Interpret the questions "from their position" - or give them a copy. Use a scale from 1 (I do not agree at all) to 5 (I fully agree)).

SELF-ASSESSMENT

A. WE KNOW THAT OUR MANAGEMENT QUALITY IS EXCELLENT

1.Every employee can identify their own and the company's customers are and their expectations. Everyone can describe his/her own responsibility and mission.

2.Everyone takes ownership of the company's vision and objectives and of his/her own objectives.

3.Everyone is cost conscious and cost efficient (as if they were "owners" of their area of the business).

4.Everyone has the right competence for today's mission and task and develops their competence for tomorrow's needs.

5.Everyone possesses all relevant information for attaining their own objectives and contributing to those of the company.

6.Everyone demonstrates excellent cooperation within their organization and with other groups and departments.

7.Everyone demonstrates a high change competence.

8.Everyone strives for excellent quality in all respects.

B. WE HAVE AN EFFECTIVE AND EFFICIENT MANAGEMENT SYSTEM

1.Our company has clear, updated and documented mission statement, vision and strategies.

2.We have consistent goals at all levels and in all parts of the company.
The goals include: Business results, costs, customer satisfaction, employee satisfaction, competence and quality.
We track them and support the goals through our reward system.

3.We have rapid and efficient means of distributing and collecting information to and from all employees.

4.Participation, cooperation and a high degree of independence are corner stones of our management system.

5.We have a clear picture of our management quality, based on several sources.

C. WE HAVE EXCELLENT LEADERS AT ALL LEVELS OF THE ORGANIZATION

1.We have defined the general requirements of all our managers.

2.We appoint leaders of high quality and development potential, to all levels of the organization.

3.We give new leaders a good introduction and start in their new management role.

4.We give all managers continuous development in leadership.

5.We create good opportunities for our managers to be highly motivated in their task.

6.We phase out leaders who are inadequate in their management jobs.

D. WE HAVE A MANAGEMENT POLICY THAT GUIDES US IN ALL ACTIVITIES CONCERNING LEADERSHIP AND MANAGEMENT

1. The company's basic values are clearly expressed.

2. The policy gives our view of our employees.

3. The policy describes our principles for leading and managing the company.

4. The policy describes how we work in order to always have excellent leaders in all positions.

5. The policy demonstrates that we focus on management quality.

6. The policy is well accepted by everybody and the practical application is clear.

In evaluating your results it may be useful to know that very successful organizations tend to rate themselves at the 4 level. Most other companies in the 2,5-3,5 span. The external estimate from a benchmark study usually averages 1 point lower than the internal self-assessment.

How to improve your Management Quality

The prerequisites to obtain substantial and lasting improvements of management quality are top management determination, time and perseverance.

1. Benchmarking of management quality is a structured comparison with other leading organizations. This process identifies strengths and weaknesses and allows you to learn from the best practices of others. It is an excellent starting point for decisions about ambition and priorities in the continued improvement project(s). This is an ambitious approach, recommended if you believe that you are about to start a long-term development project.

2. A more traditional approach is to start such projects already identified or in plan (e.g. management policy, management review, and management development), but in such a manner that each project becomes a building block, that fits with the other blocks.
Some kind of architecture is necessary. The model for management quality, used for benchmarking, can be very useful as a master drawing.

3. If you don't wish to use an "architecture", but still desire quality assurance of ongoing or planned projects (in the management area), the relevant sections of the management quality model may be used. A "consultant" (internal or external) who is independent in relation to the project should carry out the quality assurance.

Management Quality - what are the first steps?

Communication is the key word in all stages of a project aimed at improving Management Quality. The key issue at the start is the involvement of top management. The self-assessment, made by top management is often an excellent way to show what is meant by management quality and the potential for improvement. The result of the self-assessment can be made the starting point of a management meeting or seminar, with the objective to reach an agreement if and how to proceed with benchmarking or other ways to improve management quality. There are other ways to make the decision, but the management committee (or corresponding group) must support the decision - this is the group which, as a next step, has to commit to future plans and actions. The strong conviction of the CEO or head of Human Resource Management may not be sufficient to ensure a successful project.

Middle Management

The middle manager - the manager of managers - is the main implementer of Management Quality. She/he is responsible for identification of new management potential, development of those candidates, appointment of new managers, introduction and continuous development of managers, and, if necessary, the phase-out of inadequate managers. The middle manager rarely receives any education or other support to fulfill these responsibilities. It may be your first priority to set up such education for middle managers.