Managers generally recognise that they have personal strengths and weaknesses, performing more effectively in some roles or areas of business than in others.
It is the combined mix of these skills that contribute to the survival of a business. However, so that a business can continue to survive and grow it is essential for managers to review their skills and identify areas for personal development.
Two key questions to ask are:
- What are the key processes and methods a business must consider if it is to build the capability and capacity of its management team?
- What are the advantages of developing an effective management team?
The answers to these questions are considered below:
The role of managers and the management team:
A business needs to think about what is required of its managers; no one manager will be able to demonstrate the perfect combination of skills so the management team as a whole must be considered in addition to individual skill sets. The skills needed by managers in smaller businesses will often be quite different to those needed in larger ones where managers usually focus on their own area of expertise.
In addition to having the right mix of skills, rapport within a team is extremely important; if team members can relate well to each other then the chances of the business growing will be significantly greater. Where there is evidence of an incoherent team the effect on the business is a negative one, not only internally, but externally too.
If an aim of a business is to grow and develop it must have a strong management team and thus leadership responsibility must be shared. This is vitally important if:
- The business has operations in more than one location
- The business is undergoing rapid change and/or growth
- The business has different cultures, perhaps because of a merger or acquisition
Management team skill sets:
The management skills and competencies needed to run an effective business are:
- Sales and marketing
- Procurement and buying
The degree to which a business needs managers to be competent in these areas will vary. For example, all businesses need sales and administration skills, but production skills might not be as critical as financial skills in some.
If the skills needed to successfully operate a business are identified and then compared with the skills that are in existence it becomes easy to identify the gaps. Is it always necessary to develop these skills with formal training or monitoring?
If some skills are not needed on a regular basis outsourcing can be an effective option, e.g. using Human Resource consultants on a short term basis during a significant recruitment programme.
Alternatively, using outside directors or non-executive directors who can bring their expertise to the business can be considered.
It is key to ensure that all roles and responsibilities are clearly defined and good formal and informal communication structures are in place.
Building the team:
Here are some stages that need to be considered if a management team is to be successfully built:
- Review the progress of the business to date and decide its future direction
- How is the business performing in the market compared to the performance of competitors? Carry out a SWOT analysis (strengths, weaknesses, opportunities and threats) to identify the gaps between current and future performance
- Analyse the skills the business needs
- Identify the current and potential skills of all those working within the business. What ambitions do people have?
- Analyse how existing skills fit into the needs of the business and establish priorities for acquiring those which are missing
- Establish where staff can be developed to fill the skills gaps and consider the reallocation of responsibilities to create a genuine team rather than a group of individuals
- Re-examine any skills gaps.
- Consider other options for bringing missing skills to the business, for example engaging consultants, outsourcing, contracting. Carry out a cost/benefit analysis to identify the viability of these options.
- Look at permanent staff recruitment; plan ahead if possible, anticipating any prospective skills gaps.
Training and development of managers:
Developing a management team will usually involve training and development, especially if managers are promoted from within the business.
Formal training can help with the development of specialist knowledge, but it is also important that support is provided to help the manager grow into their new role and gain confidence.
Consider the wide range of training methods available, including formal courses run externally or in-house. Some individuals might benefit from the less formal development methods such as on job training, whereas others find distance learning or part time college courses to be appropriate.
It is important not to forget the development of the team as a whole and thought should be given to training managers in developing team spirit as well as diversity and flexibility. Team building exercises can help a management team to better understand each other and will aid the way they communicate.
Professional performance measurement:
If a manager is to continue to develop they should receive feedback on a regular basis so that any skills gaps can be identified and future training and improvement can be planned.
Robust systems for monitoring performance are essential, especially in larger organisations where management responsibility is frequently delegated and senior managers become more removed from the day-to-day operations. It’s about finding the right balance; managers need sufficient feedback to appreciate the overall position of the business, but they also need freedom to manage their designated areas.
Performance assessment needs to be measured in the first instance, and then evaluated against defined parameters.
Performance measurement concentrates on KPIs (key performance indicators) which are objective factors that can be easily identified and measured, such as:
- Sales figures
- Production output
- Financial performance
- Machine downtime
Targets are derived from KPIs and the monitoring of these should form a part of a regular reporting system. Written monthly reports are one way of formally monitoring performance.
It is important to remember that informal and subjective feedback is still required, maybe at weekly progress meetings, but this must be such that the manager does not feel they are being over-managed.
The Balanced Scorecard method is a way of quantifying the less tangible factors of management performance. This management tool allows businesses to define their aims and put them into action. It then provides feedback that enables them to implement a programme of continuous improvement.
Personal performance evaluation and rewards:
Performance evaluation is not just about using KPIs. All managers should be part of a formal appraisal system which will evaluate personal development.
The appraisal system will identify support needs and is one of the best ways of judging performance, particularly in areas that are not easy to measure. The discussions during an appraisal will allow personal objectives to be discussed and relevant tasks and targets to be agreed upon.
The stages of an effective appraisal system should be:
- Set Objectives: Be clear in communicating what is wanted from employees
- Manage performance: Provide employees with the tools, resources and training they need to perform well
- Carry out the appraisal: Monitor and assess the employees’ performance, discuss it with them and agree on future objectives
- Provide rewards/remedies: Consider pay awards and/or promotion based on the appraisal and decide how to tackle poor performance. Remember that there can be dangers as well as benefits to the linking of rewards to performance
Assessment methodologies include 360 degree appraisal where feedback on management performance is sought, ideally, from managers, peers and junior staff.
Incentives for managers need not always be financially related and can be tailored to different kinds of success. Thought should be given to any major differentials between managers before agreeing an incentive scheme.