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The Ashridge Management

Index 2012/2013Executive Summary

Fiona Dent, Jan Rabbetts

and Viki Holton

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Ashridge Management Index Executive Summary

Acknowledgements

We would like to acknowledge all those who have made the Ashridge Management Index possible, and in particular thank all the individuals who completed the survey questionnaire. We also appreciate the help we received from those who agreed to be interviewed.

We also wish to thank our colleagues at Ashridge who have supported us, including Helen Lockett who conducted one of the company interviews, Annette Weston and Judy Curd.

© Ashridge Business School

All rights reserved. Except for the quotation of short passages for the purpose of criticism and review, no part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of Ashridge Business School.

ISBN: 978-0-903542-94-4

Ashridge Business School Berkhamsted Hertfordshire HP4 1NS United Kingdom

Tel: +44 (0)1442 843491Email: research@ashridge.org.ukwww.ashridge.org.uk/research

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The latest edition of the Ashridge Management Index – compiled from survey data from over 1,100 respondents and company interviews collected in 2012 through to early 2013 – is a survey of managers’ opinions about a range of topical issues including:

• What are the key challenges facing organisations at present?

• What key challenges do managers face personally, including work/life balance?

• How do organisations manage change?

• What are managers’ views on trust, fairness and executive pay?

• What is happening with regard to learning and development – what are the approaches managers think are most effective?

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Most of us would probably agree that 2012 was a particularly tough environment for business; indeed, it’s hard to think of another year that has been quite so challenging. However, despite such adversity and difficult trading circumstances, respondents were up-beat and 84% say that their organisation is well-placed to survive and thrive post-recession.

The research identified some good news – not least the high levels of employee engagement – as well as some challenges – such as how well organisations are dealing with change. This is an important area and some thoughts about change are included in the box section below.

A few of the key findings – the good news – include the fact that overall views on leadership are generally positive: the majority say their line manager is effective (81%) and three-quarters view top leaders in their organisation as effective. Other include:

• Most managers say there is generally more information sharing in their organisation (75%) and the majority also believe that they are more involved in decision-making (66%)

• Just over half of respondents to the Ashridge Management Index say there is a strong culture of trust in their organisation and also that staff, as well as suppliers, are treated fairly.

Good organisations and change: We asked respondents about the key issues that they believe are important for successful change. The well-planned design phase is mentioned but many also comment on the need for adequate resources, outstanding communications, and good leadership, as one person said:

“Managers at all levels need to first understand that one of their key roles is to manage and LEAD change.”

The danger is that if managers don’t display such leadership then staff will believe change is less of a business issue and more of an optional ‘nice to have’. When it comes to making sense of change many of the 1,100 managers who took part in the Ashridge Management Index believe that simple, clear messages work best. Similarly, a change process without a clearly defined ‘beginning’, ‘middle’ and ‘end’ lacks structure and makes life more difficult for everyone involved. Some organisations are good at starting but often have less clarity thereafter. We also heard examples where too many change initiatives are happening at the same time; a recipe for confusion.

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One area for development concerns communications. Both top leaders and the immediate manager are rated lower by respondents with regard to whether they spend sufficient time communicating with staff, or are communicating clearly.

With regard to personal development for career support just over a third of managers say they do not receive career development support from their organisation and, while this may seem relatively high, the situation has improved significantly since 2010 when a higher proportion – just over half – did not receive such support.

Strongly agree Agree Disagree Strongly disagree

Leadership effectiveness and communication

Total AgreeTop leaders in my organisaTion

49%

52%Communicatewith staff clearly

Spend sufficienttime communicating

with staff 4143

4341

8 8

79

Total Agreemy immediaTe manager

67%

64%Communicateswith staff clearly

Spends sufficienttime communicating

with me 4848

2730

19 5

616

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Five company interviews are included in the report to illustrate key survey topics. Each summarises valuable ‘real world’ experience and looks at how these organisations are dealing with these topical issues:

Organisational Trust Royal Opera House

ChangeNewey and Eyre

SABMiller

Employee Engagement and Motivation

Jyske Bank, Denmark

Mencap Charity

The Ashridge Management Index findings indicate that many managers who responded are working in organisations where they are appreciated and feel valued and engaged. However, with regard to learning and development issues:

• Less than half say that sufficient time is allocated to team development

• Just over half say sufficient time is allocated to their own learning and development.

Personal challenges such as the difficulties in trying to maintain a reasonable work-life balance are also highlighted. This has implications for resilience, work pressure and stress.

We are interested over the next few months to conduct further research in the area of organisational trust. If you would like to take part in this please contact either Fiona Dent or Viki Holton:

fiona.dent@ashridge.org.uk

viki.holton@ashridge.org.uk

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CONCLuSIONS AND RECOMMENDATIONS

The Ashridge Management Index offers some useful insight into a number of interesting topics, all of which are relevant for organisations. Overall, on a positive note the findings indicate that there is a good environment in many organisations, including:

• The success of change initiatives within organisations

• leadership which is rated highly – both with regard to the line manager and top leaders

• Feeling valued – the majority of managers say that top leaders value their contribution. This is also true with regard to their line manager

• Employee engagement levels which are high – on factors such as managers’ intention to stay with their organisation and feeling proud to work there.

However, there is still more to be done around the challenges and a few of these are noted below:

• Work/life balance and resilience

• leadership – in particular a shortfall with regard to development and the need for more communication

• More support for virtual team working (as well as more general support for managers)

• The need for a better alignment of individual and organisational approaches to motivation

• Trust is particularly relevant in the current business and political environment.

We believe that the implications of these findings highlight some key topics which are important to all organisations and these are discussed in the rest of this section. Some recommendations are also included.

assessing the implications of the ashridge management index: The four key areas which stand out in the survey findings are topics which we think make the difference between mediocre organisations and those organisations which regularly impress and out-perform their competitors, namely:

• How well organisations design, develop and deliver change initiatives. A significant ingredient in any change recipe is ensuring managers have the skills to lead change. Lukewarm leadership invariably leads to lukewarm change.

Feeling valued – the majority of managers say that top leaders value their contribution. This is also true with regard to their line manager.

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• The importance of people issues – such as motivation, employee engagement and trust – and whether these are valued by the organisation. For example are people issues discussed in the same way as the senior team discuss business and strategy issues? The catch-phrase ‘our people are our greatest asset’ is not heard so much these days but it captures what’s at the heart of this issue – does the organisation support, coach and mentor staff to deliver the best possible performance? Is there a culture which values learning and development and an understanding of the positive impact it has upon financial bottom line results?

• The quality of leadership within the organisation – is coaching an integral part of the manager’s role? Are leaders listening and communicating with their staff? Do leaders model behaviour for others? Do they walk the talk? This also includes issues of organisational trust – top leaders have a good deal of the responsibility for creating a strong culture of trust within a business and creating a place where integrity and respect are strong values. Although levels are generally high – just over half of respondents say there is a strong culture of trust in their organisation – this means there are a considerable number who do not feel the same way. We asked respondents to tell us what’s important in building trust and their comments highlight a number of practical issues:

– Integrity on the part of senior managers and demonstrating this by ‘walking the talk’

– Honesty and transparency

– Communication, consultation

– Empowering staff to take on more responsibility, and enabling this by showing them trust and respect. (Autonomy is also highlighted in the survey findings with regard to motivation.)

• The role of the manager within the organisation. Managers should be at the heart of every organisation and a key question is what level of support and help do they receive? Do they have sufficient resources in order to do their job? Is there a good relationship between top leaders and managers at all levels across the business and do managers regularly receive praise and positive recognition for a job ‘well done’? These standard well-known questions are often used to assess levels of commitment and morale but they also provide a practical framework to review the working environment for managers.

It is also useful to think about what it’s like for managers who are working in more negative environments. They may not be able to count on the support of their boss, or

A culture which values learning and development and an understanding of the positive impact it has upon f inancial bottom line results.

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their boss’s boss who perhaps is too busy or simply not interested in their ‘problems’. Some may feel overworked and undervalued, in ‘fire-fighting’ mode, stressed and under lots of pressure on a daily basis. For others it may seem like they are at the bottom of the food chain – with little freedom, receiving lots of commands but with limited or no information about the ‘big picture’ context that’s so important.

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330000

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260

240

2200

220000

180 1600140

120

100

8060

40

2200

00

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Change

Leadership

People Issues

The Role of the Manager

Four key issues from the survey findings

For many businesses it is the strategy, marketing vision, financial plans, customer alignment and future product development which set the pace and direction for success. However, what the findings from the Ashridge Management Index illustrate is that other important areas also make a difference. The way that individual managers are treated; a belief by a chief executive in the value of creating a high quality leadership team; whether people are a resource that the organisation invests in, as well as the way it deals with change. None of these are likely to be at the top of the list for how an organisation is judged – it’s far more likely to be the strategy issues, financial acumen, etc., but nevertheless these are key aspects in improving efficiency, effectiveness and performance.

Each of the four topics – change, the people issues, the quality of leadership and the role of the manager – is briefly discussed below. One of our recommendations is that chief executives and top leaders review these topics and spend time to assess how well, or badly, they deal with each issue. It seems a point

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of detail, but worth saying anyway, that it would be worthwhile when doing this to listen to different perspectives e.g. what do different groups of country managers think? Do the views of those at head office differ to other groups of staff or those at different levels? It is often revealing to find out such information, for example whether younger, more junior staff think top leaders are ‘in touch’, ‘out of touch’ or ‘on message’ or ‘off message’, or whether line managers believe they receive sufficient support for specific areas such as change initiatives they are involved with.

1. ChangeAlthough so many books and articles have been written and we all know so much about change, it still remains elusive, one of the hardest areas to get right in business. This is possibly because it is a complex area. So much of the success also depends upon how engaged people are with the process of change – most of us have probably experienced a situation where everything in a new change programme seems to slow down, held back by those who disapprove or sometimes by individuals who feel they have most to lose by the new structures and initiatives.

• The good news in the survey is that most managers say their organisation achieves the business benefits anticipated for the change initiatives introduced. It is interesting to find that nearly all respondents say managing change is a significant part of their role. This sense of personal responsibility for change is important as often a lack of personal ‘buy-in’ waters down the chances of success.

• However, the survey findings also highlight areas where change might be improved. One issue is making sure that leaders have the skills needed to lead change well – nearly half of respondents say that this is not true in their organisation

recommendation: It is important to communicate about change early – well before the start of any formal initiative – and on a regular basis to all staff.

Most managers say their organisation achieves the business benefits anticipated for the change initiatives introduced.

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2. People IssuesThere are a number of positive highlights with regard to people issues in the survey. The majority of managers say that top leaders in their organisation value their contribution. This also is true with regard to their line manager. The survey also reveals high employee engagement levels – on factors such as managers’ intention to stay with their organisation and feeling proud to work there. We found similarly high levels of engagement in the previous Ashridge Management Index in 2010. However, these are the findings from a group of senior managers and we wonder whether every organisation would have similar results in a general survey of staff.

There are two main challenges where organisations need to focus attention:

• Work/life balance

• Creating a better alignment between what organisations offer and what managers say motivates them

There seems to be a black and white approach by employers with regard to work-life balance. Some do understand how important these issues are, but on the other side are those employers who prefer not to notice or openly discuss what’s happening. The latter view is not only more negative for an organisation wishing to be regarded as a good employer but one which is likely to de-motivate staff. It’s also clear that organisations more interested in addressing the problems of work/life balance offer a more caring environment where staff are more likely to feel valued.

The other challenge concerns motivation, and there are a significant number of managers who say their organisation doesn’t take the right approach to motivating them. We also asked managers about what motivates them as well as what they believe their organisation relies upon. One interesting difference between these two groups is with regard to the influence that managers have in their organisation. Managers would like more – for example ‘the authority to run their own show’ but say that their organisations don’t appreciate the importance of this when it comes to motivation. Finding ways to address this would help improve engagement and ultimately business performance overall. As one manager commented:

“Different people are motivated by different things. Senior management here struggle to understand anyone who isn’t motivated by the same things as them. Just working this out would be a help.”

recommendation: Review employee engagement and motivation – what are the key issues for different groups of staff? Consider ways to offer more support to staff who are struggling with work-life balance.

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3. The Quality of LeadershipThe survey findings indicate that leadership is rated highly – both with regard to the line manager and top leaders of the organisation. This is clearly good news that would please any organisation. However, there are some concerns highlighted by the survey about communication at top management level, and about the next generation of leaders.

leadership shortfall – many managers say that their organisation is not doing enough with regard to developing the next generation of leaders. Without this investment in developing the skills and experiences of younger managers it is hard to see how such organisations will continue to be successful. Another cause for concern is the need identified by respondents for top managers in their organisation to spend more time communicating; respondents also highlight the need for them to communicate more clearly with staff. It isn’t only an issue of time but lack of clarity about the messages which top management want to convey to the workforce.

recommendation: Look to the future. Invest in the growth and development of the next generation of leaders.

4. The Role of the ManagerThe survey findings indicate that there are signs of strain and pressure for many managers. Nearly half of managers surveyed say their organisation does not provide sufficient support for virtual team working. If virtual working is key for organisations – and this certainly is a growing trend for many these days – then it is strange to find support limping behind what managers say they need to help them be more effective in these roles. Though it does perhaps explain why so many organisations say they still struggle with virtual teams! A range of options – from training interventions to individual coaching – might help with such problems. A direct question that’s rarely asked in organisations is ‘What help would virtual team leaders like?’

Under pressure. This year’s Ashridge Management Index found a number of problems for managers which we think organisations need to seriously consider. One aspect is to look more closely at ways to develop resilience among staff, especially at ways to ensure the manager’s job is easier, simpler and more straightforward. Improving training and development opportunities would help as this improves individual skills and management capability. Creating stronger support networks for managers – with their boss, other senior staff and coaches – could all help, so that they do not feel isolated. Many managers in the Ashridge Management Index act as coaches to colleagues. However, we also note that the

Nearly half of managers surveyed say their organisation does not provide sufficient support for virtual team working.

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majority would like coaching themselves. Any organisation could offer coaching ‘on demand’, available to managers who thought they might benefit from this. Coaching for performance is a great way to increase management skills. Another option, introduced in one organisation, is ‘a dialogue’ where staff regularly present projects, research and new ideas to a group of senior managers. It’s not a progress report but a chance to bounce ideas, informally discuss work in progress and to build their reputation and credibility.

So much has changed over the years with regard to the manager’s role. Partly this is because of the increased complexity of business life, especially for those who work in multinationals and the global environment. But time has also changed the skills that managers need. The current business environment is markedly different compared with the first Ashridge Management Index (in 1994), and it is hardly surprising that the manager’s role has similarly altered. In some aspects there has been radical change. Business has become more complex, and in many organisations even day-to-day tasks are in a 24-hour global world. That means it is more demanding and more challenging than in the past. The core characteristics of any good manager are a mixture of skills and experience as well as attitudes, behaviours and knowledge sets. In broad terms, a few of the following skills are necessary:

• Importance of relationships and networks: understanding the role of each colleague or co-worker. How colleagues interact with each other and how the manager can get the best from everyone

• Ability to cope with a fluid and fast-changing work environment

• Good project management skills

• Confidence and capability in dealing with ambiguity

• Building internal influence and partnerships across the organisation as well as being good at managing upwards!

• Self-confidence, high energy levels with a good dose of resilience

• Capable of managing under pressure

• Comfortable with leading change as well as balancing competing demands.

It’s tough being a manager in the 21st century and we wonder if organisations spend enough time thinking about how they could do more to support and help their managers? For example, do senior managers regularly spend time as an ‘average manager’ or as a ‘junior manager’ – we don’t mean the ‘red carpet’ visits around the organisation but job shadowing for a day or a week at a time. When a chief executive spent a week on the supermarket checkout he learnt

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a lot as well as discovering how different life was for those in more junior roles in the organisation1. Regular reviews at senior level of ‘what managers need to be more effective?’ would help. Mentoring of senior managers by more junior colleagues can also be a mutually beneficial experience. Regular CEO lunches for managers; modular training programmes designed to help new managers, those taking on their first middle management role and also for those leading large teams could be of value. Perhaps more senior managers should try doing a lower level job for a while? When Adam Crozier joined the Royal Mail as chief executive, his boss arranged his first day was out on the rounds with staff who deliver the post. Taking such opportunities helps with personal credibility, as well as giving leaders a real insight into the challenges facing their colleagues who are nearer the front line!

If it’s tough being a manager this also is true for staff generally. How well does your organisation support and help staff? Is it a great place to work; would staff recommend you as an employer to their friends or would they advise them to go elsewhere where they would be more likely to be better treated and given more respect? When was the last company-wide ‘people’ review to assess this or consider what else could you offer? Are the people ‘values’ important to the organisation applied consistently across different departments, business areas, countries or sites, or are ‘rogue’ managers tolerated if the business results are good?

And a final point with regard to the role of the manager – are mistakes seen as learning experiences or is career suicide a better description? Too many organisations profess that mistakes can happen and they don’t matter but then hold a kangaroo court or mock trial of any managers (or teams or business areas) who do make mistakes. Long before he was chief executive at GE, Jack Welch blew up a factory2 – by mistake! – and often talks about how his boss’s boss didn’t beat him up about it but used it as a learning experience.

recommendation: Rather than a long list of recommendations to improve the environment for managers, we would suggest a practical approach. Within the next few months each member of the senior executive should spend time doing a shopfloor or more junior level job.

1. A programme in the BBC television series ‘Back to the Floor’.

2. Winning by Jack and Suzy Welch, Harper, 2005.

Mentoring of senior managers by more junior col leagues can be a mutual ly beneficial experience.

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SummaryThe areas above offer a number of ideas that can help create more effective organisations and more efficient staff. There are also a number of ways that organisations could create more resilience among staff – helping them to better manage the pressure and stresses of daily working life. A significant change would happen if individuals were encouraged to take more ownership of these issues within their own business areas, e.g. a senior manager could review how the business unit operates and what might help to create more resilience; and teams might regularly discuss what helps make the team and individual members more resilient.

We also think there could, and should be, higher levels of investment in learning and development. Less than half of managers who responded to the survey say that their organisations provide sufficient time for team development and just over half say this is the case for their own learning and development. Any organisation wishing to improve performance should look at their own situation – it should be a clear majority of managers who respond positively to such questions as these.

The contrasting views of two of the managers who took part in the survey illustrate very different perspectives. The first person highlights the problems experienced in some organisations and described by some managers in our survey. These are problems which could be resolved:

“Some change projects here are a disaster – they all follow the same path to doom: over-promising benefits; under-estimating requirements and time; missing deadlines and degenerating into warfare and quarrels or pretending everything is OK … we need instead to learn, and also to build on learning from even unrelated projects.

I know I may sound disenchanted but it is really just frustration that we keep making the same mistakes over and over without learning.”

There could, and should be, higher levels of investment in learning and development . Less than half of managers who responded to the survey say that their organisations provide sufficient time for team development and just over half say this is the case for their own learning and development.

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The second manager describes a great place to work:

“We are a values based organisation that attracts, recruits and empowers people with a strong belief and value system. We have annual retreats and team building times. Our people are regularly engaged in work groups and asked for their opinions on new initiatives.

We are developing systems that allow for greater innovation and R&D. The managing style of the business is ‘high accountability’ but ‘low direction’ which requires strategic planning but also provides freedom for employees to chart their own way forward.”

We have annual retreats and team building times.

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RESPONDENTS TO THE ASHRIDGE MANAGEMENT INDEx

The typical person who took part in the survey was likely to be:

A senior manager (representing 60% of our sample group) who is working in the private sector (55%). Most are based in the UK (71%); male (54%); in their 40s (45%); and based in HR or organisational development/strategy (25% and 16% respectively). The majority have been with their organisations for 6 years or more (59%) and are working for large employers (32% are in organisations with more than 10,000 staff).

In terms of responsibilities and rewards they are likely to have a team of between 1 to 5 staff reporting directly to them and just under a third earn between £60,000 – £100,000.

Africa including South Africa and Nigeria

Belgium

Canada

China

Czech Republic

Denmark

Finland

France

Germany

Greece

India

Ireland

Italy

Japan

Latin America

Malaysia

Middle East including United Arab Emirates

The Netherlands

New Zealand

Portugal

Romania

Russia

Singapore

Spain

Sweden

Switzerland

Turkey

United Kingdom

United States

Survey respondents included people from:

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Age group (years)40 or under 32%41-50 45%51 and over 23%

Gender

Female 46% Male 54%

Activity of organisation

Public/Voluntary and third sector 45% Private 55%

Managerial levelSenior 60%Junior/Middle 26%Professional/other 14%

Where based

UK 71% Non UK 29%

Managerial roleOrganisational development/strategy 16%HR 25%Management services 7%Marketing/sales 10%Project management 7%Education/training 10%Finance/accounting 7%Production/manufacturing 5%Management consultancy 3%Computing/IT 3%Administration/secretariat 2%Communications/PR 2%Health 3%

Total annual compensation

Under £40,000 13%£40,000 – £60,000 27%£60,001 – £80,000 16%£80,001 – under £100,000 15%£100,000 – under £150,000 19%Over £150,000 10%

Number of management reports

None 20%

1-5 36%

6-10 24%

11-20 9%

More than 20 11%

Profile of respondents

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And finally: The Ashridge Management Index Key Facts

36%of managers say that it is harder for women to succeed in their organisation compared to male colleagues

63%of managers say their organisation has maintained employee engagement and motivation levels during the current recession

64%of managers frequently take work home

72%of managers say their organisation is effectively managing its social and environmental impacts

92%of managers are proud to work for their organisation

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Ashridge Business School Berkhamsted Hertfordshire HP4 1NS United Kingdom

Tel: +44 (0)1442 843491Email: research@ashridge.org.ukwww.ashridge.org.uk

Registered as Ashridge (Bonar Law Memorial) Trust.Charity number 311096.

About Ashridge Business School

Ashridge is a leading international business school based in Hertfordshire, England. Founded in 1959, Ashridge works with individuals and organisations from around the world in its three core areas of executive education, research and consulting.

It is consistently highly placed in major business school rankings, including Business Week and the Financial Times. It is one of just a handful of business schools to be accredited by the Association to Advance Collegiate Schools of Business (AACSB); The European Quality Improvement System (EQUIS) and the Association of MBAs (AMBA).

Ashridge’s activities and areas of expertise include:

• Open and customised executive education programmes

• MBA, MSc, and Doctorate degree programmes

• Organisation development consultancy

• Executive coaching

• Applied research.

Visit www.ashridge.org.uk for more information.