This article by Simon Court of Value Partnership introduces a series which will examine developing management capability for sustained business performance.
When it comes to valuing a firm, the financial markets explicitly include an 'X' factor to take account of their views of the quality of management in general, and top management in particular. Unfortunately, in reality, many influential stakeholders are not taking the quality of management seriously. These include many venture capitalists, senior managers and HR people: the sort of people you might hope would have figured out that it is the quality of management that determines a company's capability to respond to the increasingly competitive challenges of the future.
This article introduces a new series of pieces about developing management capability for sustained business performance. Since many clearly "don't get it", the first article next month will explore the reasons why management is the key value driver. To do this, we need to understand what the current range of attitudes and behaviours towards management are. Here are some that we have observed:
- Management is only about top management. Venture capitalists often hold this view. They are not alone, as many chief executives think like this. Even some at business schools.
- Management is a battleground. In some firms management is effectively a constant series of battles over turf, resources, ideology, whatever.
- Management is overlooked as an issue. It just isn't seen in many corporate contexts. The focus is all on analysis and business decisions. Conventional MBA programs attempt to teach business, not management.
- Management is doing things. Planning, co-ordinating, controlling and so on. You just need to learn "how to". Look at the 'menu' of training programs offered by many HR and training functions.
- The living company view of management. We've borrowed the expression of Arie de Geus to capture the adaptive characteristics of this view. A handful of leading companies are evolving models of organisation and management that will enable them to challenge existing markets, innovate and create future markets.
So, there are a range of views about management and a range of views about the value impact of management. Only the living company view is rooted in an understanding of the variety of ways in which the actions and decisions of managers throughout an organisation create or destroy value. In the first article, we will explain why.
The second article will explore doing an organisation and management review (OMR) as the basis for quality decisions about developing management capability for sustained business performance. The OMR process aims to develop the understanding of senior people of the organisation and management preconditions for business success and to help them to use these insights to plan for change. It should be part of the strategic management process of a company. Our article will advise you on how to lead the OMR process in your organisation.
The OMR is only the first stage in the process of managing the development of managers and leaders. What else do you need to do? And how well is your company managing management development? This is the subject of the third article in the series. In this article we will scope out how to manage management development and equip you to audit your own organisation's approach.
Value Partnership is currently working with the Chartered Institute of Personnel and Development (CIPD) to explore the ways in which organisations identify, manage and measure the contribution of management education and development for sustained business performance. We will seek to influence good practice in the management of management education and development. Our experience of talking to a large number of UK and international companies informs this series of articles.
We are not the only people working in this field. The UK government sees UK management as a problem and has set up the Council for Excellence in Management and Leadership (CEML) to devise a strategy for improving the levels of management competence in the UK. Fine, but CEML will be calling for world class performance in an area that is barely recognised. Even if it is recognised, it may not be seen as important. This hurdle will have to be overcome if improvements are to be achieved.
