Only 10% of managers effective? What a shock!

The managerial archetype can be spotted in any organization - trapped in cubicles, chained to company-issue Blackberry and laptop, swamped with emails, stuck at meetings, frenetically busy, slaving long hours and always out of time.

But is all that busy activity useful at all?

A 10-year study by academics Heike Bruch and the late Sumantra Ghoshal, across several industries and multinational companies, has yielded the shocking insight that only 10% of managers are effective in any organization! (Findings published in ‘A Bias for Action’ - Harvard Business Press, 2004).

90% spin the wheels to look the part. They confuse themselves, their subordinates, peers and bosses through activity as a substitute for useful outcomes. They are clueless about where or how they fit the purpose of the enterprise. Their absence from work may even be a blessing!

We are not talking about the Civil Service or Malaysian Airlines! The study is of multinational corporations with all the high-flying HR practices and performance evaluation voodoo from witchdoctors at McKinsey, PwC, Accenture, Bain and others. The companies studied are up-to-date on all current management buzzwords and fads.

So why the dismal 90% failure rate?

The researchers identify purpose, willpower, focus and energy as the distinguishing traits that drive effective managers in what they have termed ‘purposeful action’. These are the 10% that make the difference in any organization.

Effective 10% know what they want, drive to get there

Purpose guides their actions. Willpower makes them push their agendas, lead their teams, lobby for resources, get approvals and work around bureaucratic obstacles with unstoppable momentum. They will not give up. They chart their course with clarity. They are frighteningly focused and will not be distracted from reaching their set goals.

They avoid unproductive busy-ness. Their time is not sapped with mindless routine and habit. Their energies are conserved, disciplined and directed to clear outcomes. They do not get side-tracked. Their teams are aligned to shared objectives with milestones and timelines. They are abundantly clear about how to achieve business growth, competitive advantage and profitability.

They reserve space for the things that matter and cut away the things that don’t. They are laser-focused on end goals while alert to the dynamics of changing competitive and consumer behaviour.

Frenetic 40% not sure what to do

About 40% of managers were energetic but unfocused - willing to work and eager to contribute but lacking direction. These individuals mean well but are in a limbo about what to achieve, how and why. In the absence of mission clarity and leadership, they strive to be very busy not to be accused of slacking off. They are in a company culture which lacks purpose, roadmap and process.

Elusive 30% duck problems, avoid decisions

The next 30% were found to be compulsive procrastinators with little focus and low energy levels. They are masters of avoidance behaviour - they evade responsibility, defer decisions, escape commitment and find excuses for inaction. They are why important things never get done or are done poorly, too late. These are managers in the same function too long, growing roots where they stand.

They survive on paper-shuffling, memo writing and pulling every bureaucratic stunt to slow down initiatives, if they cannot prevent them. They have logical reasons why things should not be changed. They are supreme status-quo defenders. They wallow in comfort zones and will not venture out of it.

Switched-off 20% have no spark to even try

The remaining 20% were found to understand what to do but for a variety of reasons, lack the energy and the will to make the effort. They have been stymied by toxic bosses at some critical point in their career or have been demotivated to the point they give up. They coast along being neither problem nor solution. They exist to make up the numbers within the managerial ranks.

Companies need to fix failed management resource

So businesses typically carry a 90% non-contributing managerial overhead. The larger question is what can be done to correct this woeful under-performance of the very expensive managerial class?

It is easy to place most managers within the Bruch-Ghoshal matrix. Corrective measures to address the under-performers are straightforward. It calls for judgement and decisive action which will re-energize the company and clear deadwood. It will unblock the organization.

Here is my corrective action list:

Frenetic, eager 40% who do not know what to do:

Train, Involve, Direct, Lead, Mentor

(i) Clarify purpose of the enterprise without ambiguity;

(ii) Let them derive team goals that align with corporate objectives;

(iii) Challenge them to define action plans;

(iv) Pick the right leaders. Assign mentors;

(v) Let them pick the most powerful metric to meet desired outcomes.

Elusive 30% who procrastinate & block initiatives:

Turf the lot out and quick!

These are the smart alecks with long tenure and minimum value to the enterprise. They block the progress of talent. They set the wrong example. Their continued tenure can only drag down organizational performance. Remove them from leadership positions. Unblock the organization!

Demotivated 20% along for the ride:

Save those not yet terminal

How many can be rescued? Can some be valuable as resource for research, analysis and presentations to back up the action managers? They know the game but don’t want to lead. Those who cannot add value have to be let go.

Sumantra Ghoshal was a physics graduate from India. He earned a doctorate from MIT Sloan School of Management and a DBA from Harvard Business School. He joined INSEAD in France in 1985 and was Professor of Strategic & International Management at London Business School from 1994. He died of a brain haemorrhage in 1995. Dr Heike Bruch is a professor at the Institute of Leadership & Human Resources, University of St Gallen (Switzerland).

Sumantra challenged his contemporaries over what he considered the mechanistic, ‘economic man’, reward-seeking assumptions of executive behaviour which dominate management theory. His managerial philosophy had more in common with Peter Drucker and Maslow, emphasizing the humanistic and higher motivations that drive great managers and teams.

His rejected the prevailing approach to management theory: “A parody of the human condition more appropriate to a prison or a madhouse than an institution which should be a force for good.”