Why good managers are rare: Importance of talent in managerial roles

What is your inference from the above research/observation?

What is the role of a leader to increase more leaders to follow professional management practices?

Why good managers are so rare?

Gallup has found that one of the most important decisions companies make is simply whom they name manager. Yet our analysis suggests that they usually get it wrong. In fact, Gallup finds that companies fail to choose the candidate with the right talent for the job 82% of the time.

Bad managers cost businesses billions of dollars each year, and having too many of them can bring down a company. The only defense against this massive problem is a good offense, because when companies get these decisions wrong, nothing fixes it. Businesses that get it right, however, and hire managers based on talent will thrive and gain a significant competitive advantage.

Gallup has studied performance at hundreds of organizations and measured the engagement of 27 million employees and more than 2.5 million work units over the past two decades. No matter the industry, size, or location, we find executives struggling to unlock the mystery of why performance varies so immensely from one workgroup to the next. Performance metrics fluctuate widely and unnecessarily within most companies, in no small part from the lack of consistency in how people are managed. This “noise” frustrates leaders because unpredictability causes great inefficiencies in execution.

Executives can cut through this noise by measuring what matters most. Gallup has discovered links between employee engagement at the business-unit level and vital performance indicators, including customer metrics; higher profitability, productivity, and quality (fewer defects); lower turnover; less absente  eism and shrinkage (i.e., theft); and fewer safety incidents. When a company raises employee engagement levels consistently across every business unit, everything gets better.

To make this happen, companies should systematically demand that every team within their workforce have a great manager. After all, the root of performance variability lies within human nature itself. Teams are composed of individuals with diverging needs related to morale, motivation, and clarity - all of which lead to varying degrees of performance. Nothing less than great managers can maximize them.

But first, companies have to find those great managers. If great managers seem scarce, it’s because the talent required to be one is rare. Gallup finds that great managers have the following talents:

1. They motivate every single employee to take action and engage them with a compelling mission and vision.

2. They have the assertiveness to drive outcomes and the ability to overcome adversity and resistance.

3. They create a culture of clear accountability.

4. They build relationships that create trust, open dialogue, and full transparency.

5. They make decisions that are based on productivity, not politics.

Gallup’s research reveals that about one in ten people possess all these necessary traits. While many people are endowed with some of them, few have the unique combination of talent needed to help a team achieve excellence in a way that significantly improves a company’s performance. These 10%, when put in manager roles, naturally engage team members and customers, retain top performers, and sustain a culture of high productivity. Combined, they contribute about 48% higher profit to their companies than average managers.

It’s important to note that another two in 10 exhibit some characteristics of basic managerial talent and can function at a high level if their company invests in coaching and developmental plans for them.

In studying managerial talent in supervisory roles compared with the general population, we find that organizations have learned ways to slightly improve the odds of finding talented managers. Nearly one in five (18%) of those currently in management roles demonstrate a high level of talent for managing others, while another two in 10 show a basic talent for it. Still, this means that companies miss the mark on high managerial talent in 82% of their hiring decisions, which is an alarming problem for employee engagement and the development of high-performing cultures in the U.S. and worldwide.