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We have known for a long time that the UK has been failing to keep up with the major developed economies (like the USA and Germany) in labour force productivity, but we now have to worry about the speed at which the GDP is growing in the BRIC countries like China, India and Brazil. It’s not how far behind they are at present, but the speed at which they are moving that should concern us all – employers, vocational education and training providers, and policy-makers alike.
We also know that it isn’t at the top end of the skills hierarchy that we are doing badly – we have expanded our higher education system to match our competitors reasonably well. It’s at the intermediate level that we are suffering – we have too many people with low level skills who can’t perform the more complex tasks that are needed in a modern economy so we finish up using graduates to do jobs that are below their capabilities, to fill the gap.
Apprenticeships could be the answer to how we address this problem. To be effective, two things are needed; the first is that attitudes to apprenticeships must change, and that seems to be happening, but there’s still more that needs to be done. In schools particularly, we need to see apprenticeships really valued. When your local paper carries a piece on the number of leavers who have gone into apprenticeships from your local secondary school in the same way that it does with University entrants, then we will have made a breakthrough.
The other thing that’s needed is for employers to treat apprenticeships as a vehicle for driving up performance standards. And by employers I mean the managers who recruit and supervise apprentices. That’s why ILM is encouraging all managers to look at the opportunity offered by the apprenticeship system to bring about real changes in their way of working.
Apprentices can be recruited at different levels, and Advanced (level 3) and Higher (levels 4 and 5) Apprenticeships enable organisations to take on people with real potential and set them demanding but achievable targets to perform at higher levels than have previously been achieved. By bringing in new employees with no preconceptions about how things should be done, managers can bring about step changes in their ways of working.
One guaranteed route to gaining managers’ awareness of the many benefits of Apprenticeships is to fast-track their own leadership and management development with a Management Apprenticeship. These are available at Level 3 and – Higher Apprenticeships – Level 5 (there is also a Team Leading Apprenticeship at Level 2), supporting those organisations that want to build their management talent pipeline to do so. One of the great benefits of Management Apprenticeships is that they demonstrate just how significant apprenticeships are in starting people on a career path than can lead to the most senior reaches of a company. Whilst other school-leavers are building up their student debts at University, their peers can be working towards a professional qualification, supervising a team of people, managing a substantial budget and taking on the kind of responsibility that comes with a burgeoning management career.
David Cameron also made a pledge this week to make apprenticeships the ‘new norm’. He is quoted as saying he wants work-based training to sit “at the heart of our mission to rebuild the economy”.
So the challenge which National Apprenticeship Week presents to every organisation in the UK is clear – take advantage of the huge benefits of management apprenticeships by developing your next generation of leaders and managers.
It’s easy to miss significant social changes when you are slap bang in the middle of them, particularly if they were well under way before you encountered them. The way that working practices have changed is a good example. When I started work (I’m embarrassed to say how long ago it was, but the electric calculator was a novelty!), everyone arrived in the office for a nine o-clock start and left on the dot of 5:30. We even had a tea break (and yes, there was a lady with a trolley).
Our latest research (Flexible working: Goodbye nine to five) shows just how out of date that model is, with 94% of employers offering flexible working, in one form or another. Sometimes it’s part of a formal contract (especially part time working and job share) but it’s just as likely to be an informal arrangement (working from home sometimes, or adjusting start and finish times). What’s more, flexible working isn’t something that is primarily used by women to juggle work and care responsibilities; men are just as likely to use some form of flexible working (except job share). In fact, the most dramatic change in male working patterns is the growth of part time working, and not just because of the recession – it’s been on an upwards trend for the last 20 years.
So what’s driving this change? It’s a combination of personal and work-related reasons. People sometimes have to go home early to collect a sick child from school, and make up the time later, but they may also have a critical report to write and stay home to get it done in peace and quiet. Except, of course, they are logged into the corporate system, so they also get their emails dropping in to their inbox to distract them, just as if they were in the office. And the more senior they are, the more likely it is that they will adopt informal flexible working patterns.
Managing people who work flexibly can be challenging, as it’s so much harder to supervise people you may not always see. Managers who agree flexible working make judgements based on the employee’s ability to manage their own workload, their trustworthiness and their level of commitment. The challenge for managers in performance managing flexible workers is to agree what they are setting out to achieve (their outputs) rather than their working behaviour (their inputs), coupled with good communication skills on both sides. One downside is the effect that having some people working flexibly can have on the dynamics of the team, so managers need to work hard at making sure the team can overcome any problems that may arise.
Here at ILM this research has made us realise just how commonplace flexible working is – it’s easier to count the people who don’t do it from time to time, than it is to count those who do. That’s why flexible working is the new normal.
Do happy managers perform better, or do good performers feel happier? Like the chicken and the egg, it’s hard to say which comes first but it’s possible to hypothesise that the two feed on each other!
Our latest research (Positivity and Performance) found a strong link between managers’ psychological wellbeing and the perceptions of their own performance. The managers who put themselves in the top 10% for performance ranked their personal happiness highly at 96 (out of 100); the bottom 10% scored themselves at only 10.
The positivity-performance cycle
The question about the correlation between positivity and performance is an important one; are people more positive about their psychological wellbeing because they know they are high performers, or does being a high performer make you feel better about yourself? My belief is that it’s not necessarily a simple cause and effect relationship. Rather, it’s a self-reinforcing virtuous – or vicious – cycle. If you think you are doing reasonably well, you feel good. If you feel good in your job you’ll do it better, all things being equal. Doing it better makes you feel better still, and so the virtuous cycle sets in. On the other hand, knowing you are underperforming makes you feel unhappy (people want to do a good job) and being unhappy makes you dispirited, and so the vicious cycle sets in.
What we saw in our research was a snapshot in time, but for many managers it’s really a journey, with some people on the upswing – feeling better and improving – and for others it’s the down swing – feeling negative and failing.
It’s not only a manger’s own happiness that impacts performance. We found if a team is happy and performing well this influences the wellbeing and performance of managers.
Stress and workload
But it’s not as simple as a happy and performing manager equals a happy, performing team. Our research shows a close inter-relationship between managers’ performance, happiness, stress levels and ability to cope with workload.
The two-year itch
Worryingly we also found evidence of a two-year itch – for the first two years in their role, managers’ report higher levels on both happiness and performance but after this period, their happiness and performance scores start to fall. It seems that after two years, as managers adjust to the role, it loses its freshness; their excitement and enthusiasm diminish making them less happy – and less confident about their performance.
Two years is a pivotal time in a manager’s career within an organisation. That means organisations have an opportunity to harness and retain managers’ early enthusiasm and energy by ensuring they receive training and development in those first two years and are clear about their longer term career opportunities within the organisation.
Training and development
Not only can training and development impact on performance, it can also indirectly improve psychological wellbeing. This is important, because those responsible for leadership and management development need to focus on both dimensions – if you don’t do something about how managers are feeling alongside improving their knowledge and skills, the effectiveness of any development will be limited. So next time you hear someone talk about ‘happy sheets’ at a training event, ask them if they are really finding out if managers are truly happy.
Given what we know about employers’ reluctance to train new managers (see our last report, The Leadership and Management Talent Pipeline), and the evidence from this research that managers are far more psychologically positive if they have access to development, the solution to this problem may well be quite simple. Train managers early and their happiness and performance is likely to improve. Simples!
A happy workforce
Coincidently, just as we launched Positivity and Performance, the Office of National Statistics (ONS) launched their own survey results on the nation’s happiness. The ONS says that being happy at work is important because it makes people more productive and improves the economy. So a generally positive workforce should mean that managers will feel more positive, which should encourage them to perform to a higher standard. And, given the state of the UK economy at the moment, we need every bit of help we can get to improve performance.
Some of you may not be aware that Small Business Advice Week took place earlier this year. To mark the occasion I thought I would share my five rules for success (or avoiding failure).
Of course, if we knew the answer to the question, we’d all have our own successful businesses. But there’s a big difference between knowing what to do and doing it. These five rules for success are not so much a guarantee of success, more a guarantee of failure if you don’t do them. So here’s your checklist to avoid failure.
Know when to plan and when not to. Planning is important. Without a plan you’ll struggle to get a bank loan, for a start. A good plan says what you are going to do, when you are going to do it and what resources you need to do it. Most importantly, they say what you hope to achieve by doing it, because the world about you changes, and sometimes plans need to change. If you focus on the end state (where you want to be) rather than the plan (how you get there), then planning works. It means that your plan is outcome focused – what you want to achieve – rather than process focused. There’s a guide to business planning on the Business Link website.
Cash is king. If you have financial decisions to make, just say to yourself, cash is king. More technically, it means that you are better off having cash now than a highly profitable business going bankrupt. Cash flow is the biggest cause of business failure in the UK. This means businesses are operating profitably but run out of cash at the bank (or reach the limit of their overdraft). So how can businesses make a profit and still go bust? Easy. You’re paying bills today but your customers are paying you tomorrow. As you grow, your payments increase and so do your debtors – you have thousands owing and no money in the bank. So you go bust. Retailers (one of the most popular small businesses with the highest failure rate) are particularly prone to this disease. All that stock has to be paid for long before it’s sold. With insufficient capital, they run out of cash. Here is a good guide to cash flow.
And that leads to my next important rule – understand your customers. Who is going to buy what you sell, and why will they buy it? This means understanding the difference between features and benefits. Features are what you build into your offer, but benefits are why people buy. For example, have you ever looked at the shape of an iPad? It has a slightly curved base, so that when it’s lying flat on a table all four edges are raised above the surface – that’s a feature. Now, when you want to pick up an iPad, it’s very easy – you can slip the tips of your fingers under the edge without a problem. That’s a benefit. You are going to be available for customers until 10pm at night. That’s a feature. Your customers can call you when they get home from work. That’s a benefit. Once you know who your customers are, you can find out what they are really looking for (the benefits), and supply that (the features). Peter Merholz has a short but interesting article in the Harvard Business Review on how to get to know your customers.
Now we come to the other side of features and benefits – why you must stop being fixated on features. People tend to start businesses to do things they love doing, and they are totally fixated on the features. The trouble is, their customers are not, all they want are the benefits – they don’t care about how they are delivered. Just because you like doing something doesn’t mean that other people will love to buy it. Once you recognise that your customers aren’t a bit like you, you are on the way to understanding what they are like.
Putting skills at the top of the tree gives you a competitive edge. The better you and your employees are at doing your jobs, the more you will delight your customers and the better you will succeed. Highly skilled employees are more productive, produce better quality goods and services, and are more reliable. Training works, and so the more you invest in developing the skills of your people (within reason) the better the pay back. And if you worry that the people you spend money training might leave, just remember that the ones you don’t train might stay! What’s more, all the evidence is that firms that invest in the skills of their people have lower staff turnover. If you want to find out how higher skills can benefit your business, go to the UKCES website and look at the case studies on high performance working.
At ILM we believe in the value of talent planning. Our research, The leadership and management talent pipeline, has highlighted exactly how far a plan contributes to business success.
It shows clearly that organisations with a talent plan are less likely to need to recruit outside the organisation. This cuts costs and reduces risk, because people you promote are both known to you (you know exactly what they are capable of) and know your business. Any business that plans a strong supply of developed leaders and managers has taken an important step to assuring its own growth and effective performance.
What is a talent plan?
It simply means that people are selected for current roles, offered development opportunities and encouraged to set themselves career goals based on what the organisation is going to be like in the future, not simply what it is today. Of course, nothing is certain, but an organisation that looks to the future is far more likely to be able to take advantage of opportunities.
What does a good talent plan look like?
Here are our ten steps to successful talent management:
- Start from your strategy – where are you going and how do you intend to get there? You need to have some idea of your organisation’s future if you want to plan for it.
- What will the organisation look like if it is to deliver this strategy and achieve your goals? Remember, if you do what you have always done you’ll get what you’ve always got. The organisation’s structure should follow its strategy.
- What people will the organisation need to deliver this strategy? This doesn’t just mean knowledge and skills – what kind of people will you need?
- How well does your current employee profile match the required profile? What talent gaps can you identify? From this you can start to work out how to develop people to fill these gaps, and which gaps you will have to fill from outside.
- Look at the age profile of your workforce. Invite people to discuss their future plans, especially those nearing retirement age. Some may want to continue full-time, others may want to work part-time, and others may want to retire. Don’t make assumptions; equally, be open to flexible ways of working so that you can hold onto experience whilst bringing on new talent.
- Assess people for their potential and not just for their current performance. Look at employees’ strengths and weaknesses, and consider what kind of role they are best suited for.
- Encourage employees to be open about their personal career goals. Be open with them about your perceptions of their strengths and weaknesses and how this matches their goals, so that they have realistic insights into what is possible.
- Look at your recruitment strategy to recruit not just for today’s vacancy but for future possible vacancies, to create a pool of people with potential for the future.
- Discuss possible development activities – training, opportunities to gain new experience, secondments or work shadowing, etc – with people to help prepare them for possible future roles. Remember – talent plans make no promises, but do offer opportunities.
- Keep your plans under constant review. The objective of talent planning is to have the kind of people you will need to deliver your strategy – if this changes, so will the people you will need.
Talent management isn’t only about finding the future leaders of the organisation. It’s about making sure that people at all levels with the potential to move up through the organisation are identified, and offered opportunities to gain the knowledge, skills and experience they’ll need to take on new opportunities when they become available.
Small and medium enterprises (SMEs) face some real challenges when it comes to training their staff – the main hurdle usually being the cost. There are also problems with losing time, especially as there is so little spare capacity and inability to cover for absent colleagues, and with sourcing training providers.
Business owners aren’t training specialists (nor do they need to be) and often don’t know where to turn for advice. However, don’t despair: here are some simple tips to help you cope with these problems.
- Cost. When you’ve got little spare cash, spending money on training seems like a luxury. However, if you think about the expected benefits, it makes it much easier to decide whether or not to find the cash. It is important to evaluate the following when thinking about training your staff.
- What is it you want someone to do when they have been trained that they can’t do now?
- What business benefits will it bring? For example, will teaching someone to use an accounting package cut your fees to your accountants? How much will you save in the next three years?
- Make a plan.Discuss with the person you are looking to train. Make them aware of what you want to gain by the training and work out together how you will get those benefits, so that they are fully committed to them as well. Don’t be afraid to be open about it – they are developing new skills, which improve their career opportunities. And don’t worry about them leaving when you have trained them – there’s plenty of evidence that firms that don’t train have the highest turnover of staff. Investing in people encourages them to stay.
- Ask other firms about their experience of training in the same skill area – use your local Chamber of Commerce or trade association. You may find that there’s a training group you can join, which commissions bespoke training on behalf of a group of SMEs, ensuring you can get exactly what you want. If there isn’t one, think about forming one. It doesn’t have to be big, and each member can take it in turns to organise an event, which spreads the load.
- Do a bit of homework on training providers in your area. Try the local FE college, use Yellow Pages to find private trainers, or Google them. If it’s management training you want, try ILM – we’ll advise on what’s available in your area. Email firstname.lastname@example.org or use our online centre finder at http://www.i-l-m.com/learn-with-ilm/1873.aspx.
- Covering for someone missing for the day is difficult but not impossible – you do it when they are on holiday. There are alternative approaches to consider, such as e-learning or workbooks. People can do this in their own time or in small chunks that will be easier to cope with. However, they will need support. Providers might offer online or telephone tutorials or coaching, and you can help by scheduling in fixed times to do the work and spending a little time with them afterwards to see what they have learnt and how they can use it.
- Value qualifications! The big advantage of qualifications is that they prove someone has learnt something and, in the case of ILM qualifications, they can use what they have learnt in the workplace. Qualifications also motivate people to achieve, giving you a better return on your investment. These days, qualifications are like the Three Bears’ chairs – they start small (Awards) and are also available in medium (Certificate) and large (Diploma) size, so you pick what suits your needs at the time.
It is a truth, sadly under-acknowledged, that an organisation in possession of an under-performing business must be in want of leadership and management development. Part of our mission is to shine a light on the value of this development in the hope that one day this will be universally acknowledged. ILM believes it is essential for people to understand both leadership and management right from the start of their working life, first of all as someone who is managed and then as you progress to managing and leading others.
On 10 July, the All Party Parliamentary Group on Management hosted an event to launch a newly published report from the Department for Business, Innovation & Skills (BIS), Leadership & Management in the UK – The Key to Sustainable Growth. The report shows the clear link between business success and leadership and management capability. ILM was part of the group which authored the report and our own research is referenced.
John Hayes MP, Minister of State for Further Education, Skills and Lifelong Learning, made a speech to open the proceedings, making it clear that the Government is not about to step in and direct underperforming businesses, but aims instead to help create a framework in which employers could access education and training opportunities that met their needs.
On the panel responding to the report were CEOs of three professional institutes, Charles Elvin (ILM), Ann Francke (CMI) and Peter Cheese (CIPD) along with the Institute of Employment Studies and ACAS. Not only was it rare for all three CEOs to share a panel like this, but there was clear consensus about the need to invest in leadership and management development to help organisations improve their capability.
The UK’s poor productivity record compared to its major international competitor nations is attributable principally to the long tail of under-performing companies suffering from poor leadership and management. The evidence in the report is unequivocal – UK managers are less well educated, less well trained and less well equipped with the tools and techniques needed to enable their organisations to achieve what they are capable of. Most of the gap between the UK and the USA (at the top of the productivity and performance table) would be overcome by UK if managers were equipped with the right skills.
Charles Elvin made the case for investing in leadership early in people’s careers, to prepare them for the lower levels of management, and this certainly caught the mood, with several people in the audience reinforcing that message through their questions and comments.
So what is the business case for investing in leadership and management?
Fact 1 Organisations with better qualified managers and a dedicated programme of leadership and management development perform better.
Fact 2 Better trained managers ensure a more engaged workforce and enhance employee well-being, leading to better performance, lower absenteeism and lower staff turnover.
Fact 3 Under-performing managers cost organisations money and are directly linked to business failure.
Fact 4 UK managers under-perform compared to leading competitor nations, as does UK business due to poor leadership and management.
Fact 5 If the bottom half of performers were brought up to the standard of the average, then UK plc would be a world-beater.
This report makes the case for leadership and management development very robustly, and shows quite clearly how poor management holds firms back. And now we need to ensure that those messages reach decision-makers.
Here are five tops tips intended to help you become as effective a manager as you can be.
1. Say thank you
Recognition is hugely important. Simply saying ‘thank you’ is an extraordinarily powerful thing to do and is very rarely used to full effect.
2. Check information sources
If someone gives you a piece of information that doesn’t quite feel right or doesn’t quite resonate, always check it.
3. Trust your employees and your team
People talk a lot about staff trusting their leaders, but it’s just as important for leaders to trust their teams too.
4. Be fair
Sometimes it’s very difficult to be fair. People are naturally drawn to one side of an argument over another and you need to resist that.
Take risks. If you fail, make sure that you survive the failure and try again – and adapt what you do. It’s important to take risks, but you have to accept that sometimes you will fail. People are far too risk-averse, but you’ve got to be prepared to take a decision.
As the education community gears up to celebrate the annual National Vocational Qualifications Day (VQ Day), perhaps it’s time to consider renaming it Vocational Professional Qualifications Day, or VPQ for short.
Vocational qualifications have traditionally been seen as an alternative to higher education, but as education and the working landscape changes, it is becoming increasingly clear that the divide between practical skills and theoretical knowledge it outdated. And in a growing number of careers for which an academic entry route was the only one, vocational qualifications’ importance is growing.
Vocational qualifications are all about being able to do things, and do them well. Higher level vocational and professional qualifications provide employers with the confidence that staff have the capability to undertake complex tasks accurately and in line with best practice. Whereas, academic qualifications provide a set of intellectual skills that enable learning. The difference is, vocational and professional qualifications translates’ ‘knowing that’ into ‘knowing how’ – and application in the workplace in real time.
The expansion of higher education over the last 30 years or so has meant that many young people who would, at one time, have gone right the way through the part time vocational and professional route have remained in full time education. However, many are finding that they still need a professional qualification, because what full time education struggles to do is provide the experiences and insights that are only available through real work.
But now the revival of apprenticeships and the creation of higher apprenticeships have started to rebalance the choices open to young people, at a time when full time higher education, post 18, has become a much more expensive proposition and its ability to guarantee a well-paid job has diminished. Higher education has responded to the reduction in this guarantee by expanding the opportunities for post-graduate study. This has certainly enabled some graduates to gain some additional advantage, but this only adds to the costs and debts. By following a vocational and professional pathway, or by transferring into it at an appropriate point, people are being offered a real choice of routes that are equally valid and valued.
And it’s not just young people. As the world of work changes, older employees are equally keen to retrain and upskill. Leadership and management is a good example of this. It’s rare for people to enter management roles before their early thirties, and many don’t do so until they are past forty or even fifty. Yet the opportunities to gain professional qualifications are widely valued. Some will consider an MBA, but most opt for professional qualifications like those offered by ILM – more people take a Level 7 qualification in management or one of its related disciplines from one of the professional bodies than all the MBAs provided by all the UK business schools combined.
So, while the focus of VQ Day will, inevitably, be on the younger learners gaining level 2 and 3 qualifications, let’s not forget that vocational and professional qualifications go all the way up to Level 7 (i.e. post-graduate level) and that learners at all stages of their careers can and should take advantage of the opportunity to learn how to perform their roles better. That’s why we should be talking about VPQ Day.
What do you think?
By David Pardey, Senior Policy & Research Manager
Public sector managers are undergoing a period of dramatic change. Over the last decade, they have seen public spending almost double from £389bn to £703bn and become used to an ever-expanding service. With cuts to services now finally starting to bite, they are finding themselves managing during a period of contraction for the first time.
Although this presents a set of new challenges, managers can contend with the changes brought about by contraction by applying leadership and management skills they developed during growth in the public sector.
Public sector managers have been concerned about the effect of budget cuts for a number of years. In 2010 our research report Leading Change in the Public Sector investigated public sector managers’ readiness to respond to the challenges brought about the recession. While their number one issue was work pressure, they said that their top concern for the future was budget restraints. Two years on the challenges for managers remain the same.
Despite these challenges, the research identified a strong sense of optimism and opportunity. Nearly half the managers had a positive outlook. A majority also recognised that opportunities existed to innovate and introduce new business processes, improve performance at work, develop creative solutions, improve teamwork and communication, and improve staff morale and motivation.
Leaders who want to drive change should capitalise on this spirit of optimism, and empower managers to develop innovative responses to budget cuts that will improve efficiency, introduce more effective back office services and improve frontline delivery.
For effective change management to happen, managers need to be made clear what the purpose of the changes is and be given consistent goals. New government legislation and initiatives, changing strategic objectives can make this problematic. A key issue for senior managers and policy makers is how well they prepare managers to address them.
Considerable leadership and managerial skills will be required to deal effectively with the challenges brought on by the ongoing changes to the public sector.
Managers can be supported in delivering better services by moving away from a top-down target-setting culture and instead using targets more constructively. For example, they could set realistic localised targets rather than having uniform targets imposed without consultation, which is in line with best practice in leadership and management.
Public sector managers need to be better equipped with the skills and knowledge in areas such as change management, innovation and communication. Yet the one area likely to be hardest hit by spending cuts is training and development. This is an essential tool to support the kind of radical change needed, as it equips managers and their teams with the skills to make it happen. At a time when the public sector needs to maintain the highest levels of performance, the availability of ongoing support and development for managers is critical.
By Charles Elvin, Chief Executive of the Institute of Leadership & Management.
This article was first published in HR & Training Journal Issue 12, June 2012.