Employers across the country need to focus on their “Purpose, People and Potential” to improve the UK’s long-term economic prospects, according to a major new report from a group of leading managers and parliamentarians. The Commission on the Future of Management and Leadership – founded by the All-Party Parliamentary Group on Management and the Chartered Management Institute (CMI) – warns that “myopic management” is a millstone around the neck of the economy and is threatening the UK’s global competitiveness.
The Commission’s report – Management 2020: leadership to unlock long-term growth – brings together interviews and expert testimony from more than 60 individuals and organisations, plus data from a new CMI survey of over 2,000 business leaders and managers. It pinpoints a crisis in management. More than half of leaders (57%) surveyed admit their organisation performs poorly or could do better on key measures and the Commission concludes that short-sighted, short-termist behaviour is squeezing out the long-term, visionary approach needed to achieve real growth.
The Commission is calling for employers to learn from the way that leading companies focus on three key areas:
• Purpose – companies need to define their long-term aims beyond just making money or hitting targets. Yet only 37% say their CEO is rewarded for delivering value to all stakeholders, rather than solely on meeting narrow financial targets. Witnesses to the Commission like Unilever Chief Executive Paul Polman – whose global business recently recorded a 9% rise in annual pre-tax profits – argue that businesses with broader non-financial objectives will actually enjoy stronger financial returns than those who only set out to maximise profits.
• People – when it comes to developing people it’s a case of ‘too little, too late’. Government data shows that the UK labour market will need 1 million new managers by 2020* – yet 71% of the leaders surveyed by CMI confess they could do better at training first-time managers, or don’t train them at all. This could leave 150,000 employees a year taking on management roles without adequate preparation. Employers are also neglecting mentoring and coaching: less than a quarter (24%) of respondents said their organisations do this well or very well, despite persuasive testimony from witnesses like Sir Charlie Mayfield, Chairman of the John Lewis Partnership, about its effectiveness in helping managers improve their skills and impact at work.
• Potential – UK plc is not investing enough to develop the potential of the next generation of managers and leaders. More than half (57%) of managers admit their organisation does not offer young people work experience and a further 64% confirm that their employer does not report on how their organisation is working with schools, colleges or universities, or does so poorly. With youth unemployment still high, a radical new approach is needed. The Commission heard from witnesses like Kim Winser OBE, founder of fashion company Winser London, who encourages every division of her company to hire a young person who has just left education.
Commenting on the findings Peter Ayliffe, CMI President and co-chair of the Commission, said: “We’re faced with a ticking time bomb of myopic management in this country, with widespread under-investment in the next generation of leaders. We’ve got some brilliantly managed organisations in the UK, but there are simply not enough of them. Unless all of us responsible for leading businesses, public services and charities acknowledge that we are at a tipping point and commit to being part of a Better Managed Britain, the nation's sustainable long-term growth opportunities will not be fulfilled. Without a genuine focus on the three critical areas of purpose, people and potential, we cannot hope to build a sustainable economy – nor a cohesive and prosperous society from which everyone benefits."
The report also includes key recommendations for government. It focuses in particular on how the education system and employers can work together to help young people develop the skills needed to become the leaders of the future.
Barry Sheerman MP, Commission Co-Chair and Chair of the All-Party Parliamentary Group on Management, says: “We’ve got to do better at developing young people’s potential. First, employability needs to be embedded in education, with managers providing more chances to gain real-life experience about the workplace. Second, government should work with partners to help build exchange networks, helping employers to set up work placements and share ideas with each other and with schools, colleges and universities. We heard from many employers who can see the damage that’s being done by youth employment and it’s clear that we can do more to train, nurture and mentor the management stars of the future.”
Government should also encourage employers to address their purpose, people and potential in annual reporting. Sheerman adds: “Encouraging employers to report on how they’re fulfilling their social purpose and developing their people will help them focus on management and the work that’s required to achieve sustainable growth in the long-term.”
CMI has developed a new Management 2020 Benchmarking Tool – www.managers.org.uk/management2020 – to shine a spotlight on the areas identified by the Commission. Completely free to use, managers can assess their organisation and see how they compare to the national average. It provides a tailored read-out for any organisation, allowing them to identify specific areas for improvement – and participants will be invited to review and track their progress after a year.
CMI Chief Executive, Ann Francke, adds: “With the UK economy at last coming out of its five-year slump, it’s the perfect time to put the spotlight on management. We’ve got some fantastic organisations in this country, but no sector will fulfil its potential without a root-and-branch reappraisal of what good management looks like. The Commission has showed how we can raise our game. By using the Management 2020 Benchmarking Tool, every leader can set their own goals based on purpose, people and potential. Improve performance in these critical areas and we’ll be well on the way to creating a Better Managed Britain.”
The Commission involved 29 leaders from across a wide range of sectors including: Jez Frampton CCMI, Global CEO, Interbrand, Dame Mary Marsh CCMI, Founding Director, Clore Social Leadership Programme, and Lord Bilimoria CBE DL, Chairman and Founder of Cobra Beer, along with MPs like David Rutley, Mark Hoban, Andy Sawford and Seema Malhotra. The Commission heard evidence from respected leaders at PLCs, entrepreneurs and experts including:
• Paul Polman, Chief Executive, Unilever
• Harriet Green, Chief Executive, Thomas Cook
• Sir Charlie Mayfield, Chairman of the John Lewis Partnership
• Al Lukies, Chief Executive of Monitise
• Duncan Tait, Head EMEIA and Corporate Senior Vice-President at Fujitsu
• Kim Winser OBE, Founder and Chief Executive, Winser London
• Ruth Ambrose, Legal Director at AMEC plc
• Duncan Cheatle, CEO and Founder of Prelude Group and Co-Founder of StartUp Britain
• Mark Goyder of Tomorrow’s Company.
The Commission’s report and the Management 2020 Benchmarking Tool are available via: www.managers.org.uk/management2020.
Notes to editors:
• CMI’s Management 2020 survey was conducted in May-June 2014 among samples of CMI members and non-members alike. 1,110 responses were received from CMI members while 1,003 senior managers were surveyed on exactly the same questions on behalf of CMI via Censuswide.
• Estimates of a million new managers from 2020 is based on IER forecasts published by the UK Commission for Employment and Skills, in its report Working Futures 2012-22 (March 2014). It shows that the number of managers in the UK labour force will grow by some 586,000 people between 2012-2022, while at the same time there will be a ‘replacement demand’ created by people exiting the labour market (retiring, for example) of some 1,378,000 managers. Combined, that means around 1.96m people will enter management roles over the decade, or, on average, 196,400 per year.
• CMI – the Chartered Management Institute – is the only chartered professional body for management and leadership, dedicated to improving managers’ skills and growing the number of qualified managers.
• Our unique professional management qualifications span GCSE to PhD level, with the Chartered Manager award providing managers with the professional recognition that increases earnings potential and improves workplace performance.
• We provide employers and individual managers with access to the latest management thinking and with practical online support which helps them embrace change, create high performing teams and keep ahead of the curve.
• With a member community of 100,000 managers and leaders, we promote high standards of ethical practice through our Professional Code of Conduct, and help managers build their expertise through online networks, regional events and mentoring opportunities.
• Visit www.managers.org.uk for more information.More Articles by Chartered Management Institute (CMI) ...