According to a new report by Gallup, organizations don’t choose candidates with the right talent to become effective managers 82% of the time. In general, Gallup found that only about one in 10 people has the natural ability to manage a team of people, and that only another two of the same 10 have some attributes of good managers and have the ability to succeed with coaching. The organization cites that one of the main reasons for this disparity is that many inept managers previously excelled in other roles, but don’t necessarily have the core skills to be in a leadership position.
“Not everyone is fit for managing a team and engaging employees.”
This comprehensive report is based off of 40 years of research studying millions of managers responsible for leading teams in 195 countries across the globe. Overall, Gallup found that most organizations promote employees based on tenure or talents that make them valuable in a non-management position. For this reason, many companies have a tendency to overlook talented individuals that are well-suited to lead teams, reach challenging goals and build a better work culture.
The report states, “Great managers possess a rare combination of five talents. They motivate their employees, assert themselves to overcome obstacles, create a culture of accountability, build trusting relationships and make informed, unbiased decisions for the good of their team and company.”
Fast Company notes that one reason many non-engaging employees are promoted is due to the Peter Principle. In management theory, the Peter Principle is the idea that employees are promoted due to performance in their current roles, rather than their potential to succeed in a management position. This leads to managers that don’t know how to engage with employees, which in turn causes stagnation and decreases productivity.
The impact of bad managers
Astoundingly, the report — using a meta-study of 263 previous published pieces of research — estimates that bad management costs the U.S. economy $319 – $398 billion each year. While on a macrocosmic level, this amount may seem shocking, consider the implications this provides about management in most organizations. Moreover, Gallup notes that about half of workers have left a job at some point in their careers to get away from a bad manager. This means that promoting for seniority’s sake can potentially lead to higher turnover and the loss of valuable talent.
How to identify talent
Overcoming the hurdles of internal advancement based on previous performance or tenure can be challenging, but, as this report illuminates, not everyone is fit for managing a team and engaging employees. Putting employees in professional development situations, such as a business simulation, can serve as a means of developing employees’ management potential.
In addition, Gallup recommends utilizing four main tenets for hiring and developing great managers: focus on talent rather than title, challenge managers to continue learning, reward performance over job function and create a culture and strategy based on talent. Though implementing these strategies may require time and patience, changing company culture over time can lead to a more successful, productive organization.