LSA Global Insights Newsletter: January 2015

January 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

Research Related Management Solutions

Benchmark Your Strategic Clarity

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

Two Time Tested Ways to Improve Your Employees' Happiness Level

  Two Time Tested Ways to Improve Your Employees' Happiness Level

All right...perhaps it is not "happiness" per se that we are looking for. Instead what we want is more positive employee engagement, discretionary effort and productivity.

Why?

Because we know from our clients and from research from organizations like Gallup that "companies with engaged workforces have higher earnings per share" in addition to outperforming companies with less engaged employees. Reason enough. But another, perhaps even more compelling reason, is that happiness factor. Employees look forward to coming to work, doing their part, helping their team and fulfilling the vision of the organization.

Here are two ways you can approach that ideal:

  1. Share what you know.
    It is always easier to feel as if you are a valued member of the team if you are fully informed about how the business works and what is going on. Often, it is not that employees don't care; they simply don't have the business acumen to understand how what they do as individuals directly and meaningfully contributes to the work of the whole enterprise.

    Give them some background and context so they can begin to understand and eventually participate in the decisions that affect their future and the health of the organization. Be ready to answer their questions about how your company's finances work, who the key stakeholders are, how you plan to build market share, what differentiates your from others in your space, where you anticipate competition, etc. You can even discuss critical business metrics...how you evaluate them and what targets you have in the coming year and why.

    The better they see that what they do, whether in manufacturing or sales, affects the bottom line, the more clearly they sense their own value and commit to helping the business fulfill its potential and continue to grow.


  2. Draw a straight line from the individual to the company mission.
    Each and every employee will work harder if they buy into the company's purpose. Instead of being stymied by obstacles that occur in their day-to-day routine, they will be more creative in their solutions because they understand why they are working. They do not check in each day simply for their weekly pay but in part for their team and ultimately for the company cause.

    Help them understand just where they fit in the overall enterprise. What would happen if they did not do their job well? How would that affect the bottom line? How would that impact your key customers? Every cog in the machine needs oiling now and then. Do not neglect the need to feel valued. Your employees will perform as if they had real ownership...and in a truly engaged workforce, they do.

Learn more about engaging your workforce

Research Business Acumen Simulations for Leaders


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