LSA Global Insights Newsletter: 5 Warning Signs that Your Managers Are Falling Behind Strategically

1.30.2015

5 Warning Signs that Your Managers Are Falling Behind Strategically

5 Warning Signs that Your Managers  Are Falling Behind Strategically

Managers matter. According to a McKinsey and the London School of Economics study of over 700 companies, a one point increase in management competency equated to an average:

  • 6% higher sales per employee
  • 70% increase in market share growth
  • 20% improvement in market cap
  • 40% higher sales growth percentage

Similarly, a follow-up study led by Stanford University of more than 4,000 companies across the globe confirmed that organizations with effectively applied management practices outperform their peers. In fact, a single point improvement in management practice score was associated with the same increase in output as a 25% increase in the work force or a 65% increase in invested capital. This secondary study also highlighted three findings that wise leaders have known for decades:

  1. Performance Expectations and Accountability Matter - "The less likely an organization is to make use of professional managers and to appoint its managers on merit, the poorer its performance."

  2. Management Potential is Often Underutilized - "The managers interviewed had little idea of the overall management performance of their own organizations."

  3. Effective Management is Multi-Dimensional - "No single dimension provides the key to improved management performance: there is no magic lever for management excellence."

Yet with all of the empirical data and intuitive knowledge that management matters, too many high-growth companies mistakenly exclude their managers from the very strategic planning and implementation processes required for them to excel as managers.

We believe it is a big mistake to keep your managers in the dark about company strategy. When we ask leaders, the majority (68%) think that the corporate strategy is clear enough. When we ask employees however, ambiguity reigns - the strategy is 50% less clear.

If your managers are not clear about the strategic direction of the company, their ability to lead, set priorities and make trade-offs for themselves and their team is severely hampered.

Read 5 Warning Signs that Your Managers Are Falling Behind Strategically

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About LSA Global
Founded in 1995, LSA Global is a leading performance consulting and training firm that helps high growth technology, services, and life-science companies create a competitive advantage by powerfully aligning their culture and talent with their strategy. Learn more about getting aligned