This is the year when HR will find out if it has done a good job of managing key talent through the recession. Those who invested hard time and effort (even if not much cash) in measuring and improving management and leadership performance are in the best position to pull away from the competition and hang on to (most) of their key people.  Those who didn’t will find many of their best employees jumping ship as soon as the job market opens up even slightly, inevitably resulting in a dip in performance while expensive recruitment and induction are put in place to fill the empty shoes.

In hard times, character shows. And in difficult business times, an organisation shows what it really believes. Many managers are more than a little disenchanted with their current employers. Whether it’s pay cuts, closing of strategic projects, loss of autonomy, seeing good colleagues lose their jobs or watching in amazement as enormous bonuses are paid to a tiny handful, there is a rising feeling that a lot of organisations have failed the tests of the last year.

We have a generation of managers who only know how to operate in a growth market.  Faced with no promotion opportunities, no bonus pool, no special projects, just hard graft at the core tasks, a lot of managers find they lack the skills to engage employees, manage performance, and deliver results.

Management and leadership behaviour drives results. All those responsible for developing management know this is true, their challenge is the lack of hard data showing which management behaviours are critical. Of course good management behaviour cannot directly change a bad strategic business decisions, but poor management behaviour can destroy the best strategy.

Understanding the relationship between management behaviour and business performance is not simple. Measuring the power of that relationship is both challenging and vital to future success. Ideally every organisation should have a clear framework outlining ‘what it means to be a manager around here’.  This framework must be clearly linked to the business strategy. For example: a low-cost environment based on fast turnaround and speedy service needs a different approach to management behaviour than a premium service provided in a luxury environment. One size will not fit all.

The best HR teams know the correlation between behaviours and performance. Lazy organisations don’t. Thus many organisations believe that ‘better management’ will mean better performance. We know from our experience across many clients in many sectors that unless the way in which management needs to be better is clearly defined, the needs clearly understood at the highest level, and the programme absolutely focused on delivering the defined improvement, then there may be no correlation between investment in improvement and performance. That doesn’t mean there won’t be any correlation in your organisation, but it means you shouldn’t invest in management development in the unsubstantiated belief that it will drive up performance.  It might, or it might not. 

The best of HR teams know the same rules apply to management behaviour at all levels.  Good frameworks, used thoughtfully, with performance measured sufficiently to drive improvement programmes and feedback loops are critical to improving overall performance. Such processes help ensure that a sustainable advantage is created from performance, independently of fluctuations in market conditions.

Of course there are no perfect measures of behaviour, but the evidence from academic research is clear: companies that know which behaviours drive their results in the long term, make clear what behaviour is required and measure people intelligently are the companies that will pull away from the competition.  There is good evidence that organisations that measure people effectively and intelligently keep their best people.
Those that don’t measure behaviour have been heard to say it is a holy grail, that measuring ‘softer’ skills is not possible, that they know from anecdotal evidence who is performing and who isn’t, and that anyway, its only business results that matter.  This is lazy thinking.   The best people do not want to work in an environment where thinking about performance is characterized by laziness, politicking (the other name for ‘anecdotal evidence’) and lack of clarity.  In such organisations, talent will walk just as soon as the opportunity arises.
Where organisations have effective HR professionals who gather and use good behaviour and performance data intelligently, key talent will mostly stay, grow and win.