The fourth part of this series of articles by Simon Court of Value Partnership considers developing management capability for sustained business performance.

In the last article we explored using an Organisation and Management Review (OMR) as the basis for quality decisions about developing management capability for sustained business performance. We advised you on how to lead the OMR process in your organisation. The OMR is only one step in the process of managing the development of managers and leaders. In the last article in this series, we will scope out how to manage management development and equip you to audit your own organisation's approach.

In our first article in this series, “Why management is the key value driver”, we highlighted the need to both sustain the current business model and to develop future models. We used the example of Boots, where managers are expected to manage to two agendas, an "Implementation Agenda" and a "Development Agenda." In this way, we can focus management development on the twin imperatives of delivering today's business strategy and developing the winning propositions of tomorrow. If we adopt this distinction, it has implications that impact on the way we manage management development.

Developing managers to sustain the current business model
The nature of this task is continuous and incremental, and driven by demand. There is a need for some kind of continuous development process to ensure existing managers have the skills they need to carry out their role and that the flow of new managers can become productive quickly. E learning, training workshops/programs and coaching are examples of ways in which businesses can support their managers to be able to sustain the current 'winning proposition'. For example, Tesco partners with Manchester Business School to develop their store managers so that they can do more with their own financial resources. To meet this kind of demand, management development needs to be organised for consistent, comprehensive delivery and customer service. The business can evaluate this kind of development through cost-benefit analysis and on a business or individual case basis.

Developing managers to create future business models
This task is distinctly different. It tends to be discontinuous and led by innovative ideas and proposals. Take the financial services company that wanted to identify and enter new national markets. The board realised the company had to learn how. In collaboration with a leading business school they designed a process to enable managers to agree to a possible international move, to learn how to analyse a new market, to do this analysis in 'virtual' teams, review the findings with the board and agree the best move. The managers who analysed the chosen markets then led the entry. The company has now developed an organisational capability in managing new market entry. In another example, Boots now deliberately stretches people through strategic projects, international assignments and other moves, in order to develop the management capability to deliver "good surprises" to shareholders. As both these examples illustrate, business challenges/projects and external partnerships are the ways managers learn to develop tomorrow's winning propositions. To do this kind of work, management development needs to be organised like a consulting firm for added value. The business can evaluate success from this kind of initiative by tracking the business outcomes and ultimately through long-term value analysis.

On a practical level, managing both kinds of development involves a series of processes from diagnosis, specification, implementation and evaluation. The key is that these processes are geared around contributing to sustained business performance. Let's briefly explore what's involved in each process:

Diagnosis
At the heart of diagnosis is the clearest specification of the management capabilities required to deliver the current or future business models and sustain innovation. The quality of diagnosis is enhanced by the effective involvement of senior executives, learners and those who have a stake in the outcome of any learning, such as customers. Business-centred people development specialists who have good relationships with line managers can play a key leadership role in this process. But this issue is too important to leave solely to HR.

Specification
This is fundamentally about designing management learning that is 'fit for purpose'. In complex, dynamic contexts, management development must relate to significant work issues, clarify the context and produce valuable outputs. This means it is important to closely involve top management so that sensitive issues can be handled and proposals implemented. It also means that we need to look at the interrelationship between learning and other business, organisational or HR initiatives, and not treat it as a separate activity. In order to specify management development, collaborative partner relationships with consultants/providers can be very valuable.

Implementation
Good quality implementation is always important. Traditional style management development has significant limitations because the learning is generalised and only parts of it may be immediately relevant. Plus, in an input/output model of learning, receptivity to theory is encouraged; application, challenge, innovation and experimentation are not. Nor is collective learning. So we need to use processes that really do work. Some of the better ones are:

- Taking people through a full learning cycle
- Getting people to manage projects or situations
- Simulations
- Coaching and mentoring
- Developing a curriculum for managing business processes
- Pulling in knowledge and skills on a 'just-in-time' basis
- Stakeholder assessments
- Benchmarking and continuous improvement

Some of these processes would be a significant departure from the programme-based delivery favoured by many companies. The challenge is to be innovative enough to make a substantial difference to behaviour and performance, even if it does not conform to conventional expectations. Remember that something like 90% of all learning in companies is on the job or influenced by others, rather than from formal learning processes.

Evaluation
Of course, the point of evaluation is to know whether you have made a difference and how you could learn from the experience. This can be done on an individual, team or organisational level. If we are interested in sustained business performance then organisation-level assessment is particularly important. For example, if we set out to improve customer and employee satisfaction through leadership development than we should measure these factors both before the initiative and afterwards, on a time frame that makes sense. These factors can be given a financial value if we are seeking to do a business case or a cost-benefit analysis. We can also identify measures for changes in the effectiveness of management processes such as strategic planning. If we are serious about adding value to the business we are serious about evaluation of business outcomes.

This is where we conclude this series of articles about developing management capability for sustained business performance. However, you might like to use our checklist to take stock of where your own organisation has got to in relation to this challenge. Perhaps go through it with a colleague. It summarises many of the points made in this series. See it as a first step on the road to improvement!

If you want to take positive action to develop your organisations' management capability as a platform for sustained business performance, then start by considering these questions.
On a scale of 1-10, how would you rate your performance in the following dimensions?

1. Convincing key stakeholders of the significance of managers/leaders in organisational performance

2. Clarifying the business purpose of developing managers in our organisation

3. Identifying and breaking down blockages that prevent us making headway

4. Getting our organisation's plan to specify the management/organisational capabilities needed to deliver it

5. Achieving the right balance between sustaining the current business model and developing future ones

6. Securing the right processes to sustain a fruitful organisational dialogue about developing managers and the organisation

7. Ensuring the diagnostic process clarifies the business requirements with precision and is iterative

8. Identifying where we need to be more ambitious or innovative in what we specify/design and how that is delivered

9. Creating evaluation processes that give us enough feedback on the actual benefits to the organisation that we need to achieve

10. Sustaining a consistent approach across business, organisational and development activities

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