The UK has a productivity problem. For some years the growth in productivity (the economic output produced per unit of labour expended) has stagnated. Jeremy Hunt sees the answer in a technical fix; the expanded application of artificial intelligence to economic activities.
Others have suggested we have a ‘skills shortage’. However, there may be a deeper cause to the UK’s weak productivity growth: counterproductive management.
The Chartered Management Institute (CMI) has recently calculated that around 80% of people in management positions are what they call ‘accidental managers’. These are people who have been promoted but have little or no experience or training in management.
This might have some pretty serious implications. Given the productivity gap between the US and the UK, its likely that accidental managers’ shortcomings are at least partly to blame.
As the UK grapples with stagnant productivity, seen by most economists as one of the central impediments to economic growth, dealing with the shortcomings of UK management has become crucial for the UK’s economic success. Rather than Hunt’s technical fix, what the UK needs more urgently is better managers.
The Peter Principle
60 years ago Laurence Peter and Raymond Hull developed what has become known as the Peter Principle. After extensive study of organisations, Peter and Hull concluded that people were mostly promoted by how well they did a job at a particular level in the organisation, which makes sense.
However, each time someone is promoted, the demands and challenges of their position change. If they, once again succeed as this new level, again they will be promoted. At some point, though, they will reach a level where the skills and practices that served them well in previous positions no longer do so.
Unable to do the job well, they are no longer promoted and remain stuck at this level in the organisation. They may eventually leave or be removed through performance review measures. They may receive retraining or even forms of management education and eventually thrive at this level. Unfortunately, though, they also may just stay at this level causing problems for others. This lead Peter and Hull to assert the Peter Principle: “In a hierarchy, every employee tends to rise to his level of incompetence”.
This is not a recent problem but gives us a big clue to part of the UK’s management problem; our accidental managers have been promoted to their level of incompetence.
Is the answer management education?
While there are many ways of teaching management to students and to mid-career executives seeking to upgrade their chances of promotion, these largely remain based on ‘scientific management’, the ‘most enduring management theory of all’.
Focussed on the development of efficiency through the examination and improvement of processes, at its base scientific management is driven by data. Nowadays this is largely concerned with financial information. At management schools around the world, budding managers are taught how to read financial data, and to use that data to underpin decisions about how to reorganise work, assess efficiency and shift work patterns.
While accidental managers have likely received no training in scientific management, they may try to apply it based on a rudimentary understanding gained from the media and popular culture. Whatever you think about the approach which is taught in management schools, this compounds any limitations.
Where managers treat staff or workers as merely functionaries that need approval for actions, a reduction in motivation quickly follows. As David Sirota and his colleagues summarise: “Excessive levels of required approvals, endless paperwork, insufficient training, failure to communicate, infrequent delegation of authority, and a lack of a credible vision contribute to employees’ frustration”.
This can also result in employees not being entirely sure what managers actually want them to do, as their managers seem to be more interested in ticking specific boxes and reaching particular data-defined targets.
Indeed, managers can tend to manage the data not their staff, treating staff as a cost that needs to be reduced. Unsurprisingly, all of this leads to forms of disengagement, which impacts on the ability of any organisation to fulfil its various functions.
When managers think they must approve all major work, workers often feel constrained, not empowered to do their jobs to their best ability.
The problem may actually be ‘over-management’
In the end the problem we have in the UK may be that our workforces are over-managed. Quiet quitting is one way we can detect disengagement prompted by overbearing management: “disengaged workers choose to do only what is absolutely required from them during their contracted hours”.
Another is a lack of spontaneous innovation in the workplace. When people are disengaged they are seldom interested in finding incremental improvements to their job. The problem is that increases in productivity are often driven by incremental changes. And, if workers are not willing, or feel obstructed from innovating in their own work practices, then their employers will likely find it difficult to drive large scale improvements in productivity.
Recently Vicky Ferrier, chief people and commercial officer at Konsileo, a commercial insurance broker, offered this simple equation:
Happiness + autonomy = productivity
If we have a culture of over-management and this equation reflects the reality of the workplace, then the UK’s productivity problem has its roots in ineffective or even counter-productive management.
Certainly, there are other immediate causes of the stagnation of productivity growth in the UK, but these have merely compounded a longer-term problem.
One estimate starkly suggests that workers in foreign owned manufacturing companies (using, one would expect, management practices developed abroad) are around twice as productive as those in UK-owned companies. There may be other contributing factors to this disparity, but the problems with UK management practices are likely central to this problem.
The question is: what is to be done?
No large organisation can be un-managed. However, while the best managers see their job as getting out of the way of their staff and facilitating not directing their work, it would seem the majority of UK managers are more concerned with control.
This is no easy problem to solve, but blaming workers for the stagnation in productivity and thinking there will be a simple technical fix, is certainly not going to resolve the more insidious problem of bad management!
