The True Cost of Bad Managers – and Why You Need Really Great Ones

Editor’s Note: It’s a TLNT holiday tradition to count down the most popular posts of the year. This is No. 35. Our regular content will return on Jan. 5, 2015. Happy Boxing Day!

When bad managers are allowed to run free, everyone suffers.

Employees suffer – Employees feel unsupported, undirected, bullied, confused, unmotivated, unappreciated, frustrated, and constantly questioning, “is it me?” So they are not engaged and they are not productive.
Executives suffer – When executives lack confidence in the team beneath them, they have to cover for, or recover from poor work and decisions from ineffective managers. They become overloaded because they have to do their job AND the job of their managers.
Business suffers — When managers are not stepping up to do their jobs — making clear, good decisions and building a strong, capable team beneath them — then executives can’t fully do their jobs because they keep getting dragged down. Business progress slows or stops.

The business value of good managers

The research in this HBR blog post by Randall Beck and James Harter, Why Good Managers so Rare, shows that the quality of the managers impacts the success of the business more than anything else.

Here are some highlights:

Gallup has found that one of the most important decisions companies make is simply whom they name manager.
Bad managers cost businesses billions of dollars each year, and having too many of them can bring down a company.
Businesses that get it right, however, and hire managers based on talent, will thriveand gain a significant competitive advantage.
To make this happen, companies should systematically demand that every team within their workforce have a great manager.
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:
- They motivate every single employee to take action and engage them with a compelling mission and vision.
- They have the assertiveness to drive outcomes and the ability to overcome adversity and resistance.
- They create a culture of clear accountability.
- They build relationships that create trust, open dialogue, and full transparency.
- They make decisions that are based on productivity, not politics.

Improve your managers

I find it very interesting that so many businesses have such a primary focus on revenue and cost cutting, but fail to put any focus on manager improvement, as though manager improvement is an unrelated “extra” and not a path to higher revenue and lower cost.

Another way I see companies shoot themselves in the foot is to have a such strict hiring freeze to lower costs, that they do not allow replacements under any circumstances.

If you are trying to improve your business, the last thing you want your managers doing is “making due with the team they have.”

If you prevent replacements, you are preventing your managers from doing the most fundamental part of their jobs.

The most important thing a manager can do is to build a highly capable team beneath them — a team that is able to do what the business needs now and in the future.

If you have such a lock down on hiring that you prevent upgrading bad managers to good ones, you are seriously constraining the ability of your business to solve key problems to increase revenue and cut meaningful costs — things good managers with good teams do as a matter of course.

Imagination and permission

I find that the key manager skills above listed in the HBR article — motivating, driving outcomes, clear accountability, building trust, and good decisions — are indeed rare but can be improved.

Many managers end up in management positions for reasons other than these. The mistake I see many companies make is to expect people to automatically turn into good managers simply because they are in the job.

They miss the key step of telling their managers what makes a good manager, or setting clear expectations about what the job is.

Managers tend not to step up on their own because of issues with either imagination (they don’t know they are supposed to), or permission (they are not sure they are allowed to).

Imagination: You need to get it into the mind of your managers that they need to be good at and do these new manager-things. Some poorly performing managers will do better, simply be being made aware of the game.
Permission: Some people don’t think they have the permission to step forward and lead in this way — especially if no one has ever talked to them about it. You need to make it clear that not only is it OK, it’s required. And if they don’t have the skills or a plan to lead in this way, you need to train them or let them go.

Make your company stronger

My favorite line in Why Good Managers so Rare is this one:

Companies should systematically demand that every team within their workforce have a great manager.”

Amen.

I know in all of the management teams I have built, developed and run, there is nothing that has had as big an impact on my own success and the success of the business as getting the right team in place. All the ropes are tight.

This was originally published on Patty Azzarello’s Business Leadership Blog. Her latest book is Rise: How to be Really Successful at Work and LIKE Your Life.