The top challenges facing organizations and leaders in 2011 are achieving excellence in execution, improving profitability, and engaging the workforce. The key to success in each of these challenges is the ability to capitalize on the potential of managers within the organization to translate strategy to results.

Managers are the critical lever that make or break an organization.

Executing on strategy has remained one of the top three challenges for leaders (as reported by the Conference Board of Canada) for several years. Leaders often mistake the solution for working longer and harder – this is their answer to improving sagging productivity.

A study published in the Harvard Business Review (2005) identified that most organizations achieve about 63% of their potential performance. Of the 37% performance missed, 78% of execution losses related to people performance issues.

Execution is actually more important than strategy. A brilliant strategy is nothing more than an idea unless people actually work to make it happen. More than 85% of bottom-line results are due to people performing via execution rather than the strategy itself.

How can organizations support their people to perform at higher levels and execute better against the strategy?

The levers to increase the return on execution are business alignment and people performance. Both levers are within the power of the manager. The manager translates the strategic vision to operational tactics so the right actions are taken to produce results. Managers also coordinate with other managers to ensure that all the connected parts of execution move together. Most importantly, the key role of the manager is to coach the performance of the people. Without managers actually invested in engaging the workforce, very little effort is invested and productivity sags (welcome to Canada).

The manager who works effectively in coaching the performance of others can improve the overall engagement level of the workforce. A boost in engagement – and in turn performance – of employees has the potential to increase overall productivity by 23% on average (Cascio 2009).

Even more important, studies show that approximately 68% of an organization’s workforce has the potential to increase overall engagement and leverage productivity (Cascio 2009).

The connection is only made through the effectiveness of managers. Effective managers drive employee engagement which in turn enables customer satisfaction and loyalty resulting in long-term profitability and growth.

In Canada, those employees who are actively engaged in their work stands at about 23% while 7% are actively disengaged.

Where does Canada stand in Employee Engagement?

Source: Towers Perrin (2009)

Almost 70% of Canadian employees are not engaged and working to their potential. The principal reason is the lack of effectiveness at the manager level.

A Towers Perrin study reveals that employees identified the most important supports needed from managers to engage them in their work – and that managers presently are failing in all areas.

• Only 38% of managers showed sincere interest in employees’ wellbeing
• Only 38% of managers communicated openly and honestly
• Only 40% of managers effectively communicate the reasoning for business strategy and decisions connecting them to people’s work
• Only 44% of managers are visible and accessible to their people
• Only 49% of managers worked in ways consistent with the organization’s values

There is a real management divide in most organizations. To be fair, most managers were not prepared or supported in their promotion to leadership. Many managers began their careers in technical or professional positions where individual performance counted and key analytical skills were critical. Empathy, communication, and participative consultation (all vital to effective leadership) were not key strengths for promotion – and most not even developed after being in management for years.

Managers are pivotal to organizational success. Why?

• Managers have the ability to spot opportunities and act upon them at a more practical and granular level than executives (they actually see the frontline)
• Managers act as ambassadors between executives and the workers (so they need to understand the strategy)
• Managers build relationships within teams and between teams
• Managers enable organizations to run smoothly
• Managers are the logical translators of strategy to actionable objectives for people to execute against

Sadly, managers currently are estimated to be the most disengaged cohort in the organization. DDI reported that in the past two years, 46% of managers had a noticeable drop in engagement in their responsibilities. Furthermore, the report showed that only 14% of managers are actively engaged and 85% are enrolled! The positive news from the study – only 1% was fully disengaged.

Managers want to contribute on a meaningful basis but there is a significant gap. Due to the impact of increasing responsibilities, more complex work, increasing scale of the work, more stakeholders to satisfy, and the higher cost of failure, managers are overwhelmed.

So, what are managers doing with their time?

Most are getting lost in paperwork and projects their teams should be doing. Only 6% of the average manager’s time was spent actively engaging their teams (their number one driver of success). As well, the managers are much more stressed than three years ago – 69% report being more stressed than in the past.

The real impact from the current manager mindset is that there is a serious challenge to the ability of the organization to execute. More than 60% of organizations feel they will fail to meet performance targets in the next three to five years the way managers are working today.

What needs to happen?

First of all, the organization needs to take responsibility for supporting managers to be effective. A study by Pease and Wellins identified that what managers needed most to be more engaged are clear expectations for their performance, better role models and mentors in senior leaders, understanding what is needed from them, formal development support, and the involvement of their senior leader.

Most managers are just dropped into the role, ignored, and everyone hopes it works out. It clearly hasn’t.

A respondent to a recent study put it best, “help me understand what success is going to look like in my role, show me with examples, help me think differently so I can apply these things to the development of my people and the appropriate influencing of the organization.”

Managers need to focus on building five key skills to turn the engagement needle around:

• Coaching and developing others
• Building teams and promoting teamwork
• Influencing skills
• Dealing with complexity and uncertainty
• Managing feedback and performance

All of these skills also start with self-awareness and the development of emotional intelligence in each manager.

Our region lags Canada in terms of investing in the development of managers – and Canada lags the US by more than half – no wonder we are sliding into productivity pit.

Organizations need to invest in developing their managers to provide clarity and focus to support the execution of their strategies through people performance.

The pivotal investment an organization can make for better bottom-line profits is not a marketing campaign or a new piece of equipment, it is the investment in the position where a shift in performance would have the most significant impact on the performance of the organization overall – the manager.

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