There are fewer things more important than proper management. It seems like a discipline that is primarily for more skilled people or those with experience; yet what matters isn’t just having management but effective management.
Global management consulting film, McKinsey and Company did extensive research into just this and came up with measured results. The result
“shows that the core elements of management can be assessed and scored and that well-managed firms have higher productivity, market value, and growth, as well as a greater ability to survive adverse conditions, such as global financial recessions. Our research further indicates that more than 80 percent of all productivity variation occurs within a given sector for a given country and that there’s a “long tail” of persistently badly managed firms in all countries and across all sectors. These findings suggest a significant potential for management-led productivity improvements in every country on Earth.”
The question is, what does bad management actually look like? We can’t just say it’s a “bad business” because something led to that business being bad. According to Mind Tools, good managers are encouraging and engage with their employees – this shows both that they have a handle on the situation of their employees’ work as well as the employees themselves.
This benefits in two ways: the first is by knowing what your employees are actually doing, it means you have a greater handle on all work in general. Second, by knowing your employees, you can better steer them to get the work done. For example, if you know an employee is stressed because of a home situation, it might be better for everyone – the employee and the business – to help put that work on to someone else or at least reduce his workload. In that way, the work gets done and the employee is treated with respect.
Bad managers however do bad things. As Bloomberg Business highlights: “Bad managers don’t say these things. Helpful, encouraging, and trust-based words and phrases don’t occur to them.”
Rather they threaten employees.
“Lousy managers… love to remind employees that it’s all about the transaction: ‘You work for me.’ They never fail to remind team members that someone else would take the job if you ever got sick of it or let the lousy manager down in some way.”
Nonetheless, managers need to care about how they operate and treat their employees – because you can’t separate a manager who mistreats his employees from bad businesses. Poor management is poor management – and poor management is detrimental to a business’ success.