Managers often find themselves in this role out of necessity. A founder hires enough employees where managing staff becomes an overwhelming responsibility. A manager departs a large company, leaving the position open. The best salesperson, programmer or engineer is then asked to lead a team when growth requires more organization.
Top performers and founders are thrust into management roles and continue doing what made them successful as individual contributors. This approach is no more effective than a star soccer player getting promoted to coach but refusing to come out of the game.
To illustrate the severity of the problem, consider the following statistics:
- Corporate Executive Board found that 85% of new managers worldwide receive no formal management training before starting their role.
- This same study found that 60% of new leaders fail in their first two years.
- A Gallup study found that companies with highly engaged workforces outperform their peers by 147% in earnings per share.
- Gallup also found that 87% of employees are disengaged, and managers account for 70% of the variance in employee engagement.
New managers are rarely prepared to lead a team. At best, they have demonstrated the potential to lead. Unskilled managers make up for their deficiencies with longer hours. Unable to effectively leverage a team, they arrive early, stay late and work through weekends. Good employees stagnate and eventually leave. The culture continues along this path until the manager finally burns out or is replaced.
How does a business start to fix this problem? Great companies invest in their managers.
Skilled managers and team leaders determine a company's culture. They develop the next generation of leaders for a company to grow. Rather than directing and controlling, skilled managers acquire and unlock the potential of the talent on their team.
An organization with a skilled leadership team creates a competitive imbalance. Businesses with elite leadership teams appear to be playing an entire game with an unfair five on four advantage.