The Future Of Management Development In Australia : Discussion Paper
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The future of management development in Australia: discussion paper
Prepared for Innovation and Business Skills Australia (IBSA) by Precision Consultancy
March 2000 Introduction
This literature review looks at management development trends identified in current reports and documents on management and leadership, in order to provide direction for future management development units and qualifications.
Since the 1995 Karpin report that criticised the quality of Australian managers, it could be argued that companies are still not receiving maximum benefit from management development programs.1 The Karpin report identified five challenges that faced Australian businesses and managers then, and arguably today, which are: to develop a positive enterprise culture through education; to upgrade the capabilities of the vocational training and education sector; to capitalise on the talents of diversity; to achieve best practice management development and to reform management education.2
The Karpin report expressed the need for a workplace-based development program for frontline managers.3 Subsequently, the Frontline Management Initiative (FMI) was designed in order to increase management capability and performance and thereby improve business effectiveness.4 The evaluation of the FMI in 2002 by the National Centre for Vocational Education Research (NCVER) demonstrated that overall, FMI had a positive impact on Australian businesses.5 In addition, it was noted that senior managers play a critical role in legitimising new and flexible approaches to workplace based learning.6
The 2005 study ‘The manager of the 21st century’ that IBSA commissioned Boston Consulting Group (BCG) to undertake, found that in the years leading up to 2020, “successful executives would be those who can maximise opportunities in a changing world; manage diversity in a changing workplace; respond to changing times with a changing mindset”.7 In the follow up report undertaken by Ernst and Young, ‘The manager of the 21st century: implications’, it was found to be consistent with the BCG report. Furthermore, it observed that businesses should facilitate management development in five main areas:
• Global business awareness
• Talent management
• Stakeholder and customer expectations
• Employee engagement and retention
1 Painter, Joanne and D’Netto, Brian. ‘Limited returns: Why management development isn’t fully developed’. The Committee for Economic Development of Australia. Accessed at
Future of Management Development - Discussion Paper March 2009 2 • Technology, information and infrastructure.8
The report recommended several detailed action plans for IBSA to pursue in order to improve management development in businesses, and noted that “hands on” programs were one of the most effective learning methods.9 In addition, management development must be seen as an ongoing process throughout an employee’s life cycle.10
Please note that there is a separate Discussion Paper on Innovation and Frontline Management
Contemporary Issues in Management Development
In a study commissioned by the Australian Institute of Management in 2002, 95 percent of organisations interviewed considered there was a relationship between management development activity and organisational performance and 87 percent of organisations actually had a formal performance management process in place.11 The study demonstrated that companies recognised the benefits of management development and made an effort to improve their organisations. The article entitled ‘Limited returns: why management development isn’t fully developed’ found that management development helped to improve job satisfaction, reduced employee turnover, increased productivity and taught managers to handle customers more effectively.12 It has even been argued in the article ‘Upgrading talent’ that development programs are essential to maintaining workplace morale and increasing productivity, as well as being important in providing people with skills to carry out redesigned jobs that have more responsibility.13
However, the D’Netto and Bakas study found that companies are still not approaching or utilising management development programs in an effective way.14 One explanation was that companies were not investing enough into management development programs. Almost three quarters of companies surveyed spent around one percent of a typical senior manager’s $80,000 annual salary on management development, whereas the best performing companies would spend around five percent.15 This demonstrated that whilst managers believed development programs to be beneficial, this view was not reflected by the expenditure on programs by the majority of companies surveyed. D’Netto lamented that in many organisations, management development was still seen as a perk, when it is in fact a “necessity and becoming more so everyday because of the rapid pace of change in workplaces”.16
8 Ernst & Young, 2007. ‘The manager of the 21st century: implications: a review of management development requirements for the future. Commissioned by Innovation and Business Skills Australia, 5. 9 Ernst & Young, 2007. ‘The manager of the 21st century: implications: a review of management development requirements for the future. Commissioned by Innovation and Business Skills Australia, 4. 10 Ibid, 23. 11 Australian Institute of Management, 2003. ‘Key findings: management development practice in Australia’. Accessed at
Future of Management Development - Discussion Paper March 2009 3 Management development programs are necessary for companies to be successful, however, there are still issues with their implementation.
Role of leaders
According to the Australian Institute of Management, “leadership is the number one issue on the minds of Australian Managers”.17 Leadership is an important aspect to making a company successful. Reports and articles all demonstrate that in order for a leader to be successful, and thus benefit the company, they require certain characteristics and management skills.
The relationship between management and leadership is the subject of much debate. Some management development programs claim to include leadership components, yet there are leadership programs which are unrelated to management.
For the purposes of this paper we consider management to be transactional that is, concerned with present operational management of the business. Management roles have conferred or formal authority, and managers are expected to use formal and rational processes, such as planning, organising, staffing, directing and controlling, to achieve agreed outcomes. Leadership may however involve vision and change - stepping outside traditional processes or methods of working and looking to the future. Management requires an organisation, leadership does not.
“ It (transactional management) is concerned with tasks, people and processes and about getting things done efficiently and effectively in order to meet the current requirements of our customers, clients and stakeholders. Transformational leadership is about today's business partly and particularly about tomorrow's business and how we need or decide to change to meet the changing needs of our business, marketplace, customers and employees. ”. 18
The extent to which leadership should be incorporated into Australian management development programs, and how leadership skills can best be developed, needs consideration.
Hierarchy
In the ‘Manager of the 21st century’, it was put forth that the “cult of the CEO” would be replaced by the “cult of the top team”, whereby management will lean towards a more team-based style.19 The consultant and management educator Gary Hamel believed this to be partly explained by generation X and Y, who are demanding more control over their environments and are unlikely to tolerate an overtly hierarchical management model.20 This model also lags behind the need for companies today to emphasise collaboration and wealth creation.21 Lowell Bryan, a director at Mckinsey and Company, claimed that the traditional hierarchically based twentieth century model should be limited and only used for making decisions requiring authority such as the allocation of resources or appointing people to positions.22
16 Ibid. 17 Sheedy, Chris, 2008. Management Today Article: Cover story (September 2008). Australian Institute of Management. Accessed at
Future of Management Development - Discussion Paper March 2009 4 Senior management role in developing staff
Apart from breaking down the hierarchical silos, D’Netto believes top management has an important role in supporting management development, which in turn fosters a positive learning environment. This is in line with the ‘Paradise Nearly Gained’ report which noted that the attitudes of senior managers are critical in legitimising new approaches to workplace based learning.23 Research conducted in the UK by the Chartered Institute of Personnel and Development (CIPD) also demonstrated that the role of managers is critical to training and development.24
Consequently, managers as leaders should support and recognise the importance of learning and development whilst also aiming to decrease the hierarchical nature of companies.
Talent management
In today’s changing world, managers are expected to manage a multi-generational workforce of baby boomers and generation Y. Older workers may retire at a later age than 55 and generation Y workers will often switch jobs after two to three years according to ‘The Manager of the 20th Century’.25 The ability to attract and retain skilled staff will largely depend on their ability to manage this multi-generational workforce.
The McKinsey Quarterly global survey found that business leaders regard talented people to be the most important managerial preoccupation for the rest of the decade.26 However, it was argued that many organisations dismiss talent management as a short term problem instead of being part of a long term business strategy.27 ‘The manager of the 21st century’ also recognised the importance of retaining skilled staff. Due to the complex environments that developed from off-shoring and other multi-country strategies, more attention will be paid to the performance of employees.28
In order to attract and retain skilled staff, ‘The manager of the 21st century’ proposed that providing a flexible environment is essential.29 Human resource professionals claim that generation Y in particular will demand more flexibility, meaningful jobs, professional freedom, higher rewards and a better work-life balance.30 Richard Hall, the Associate Professor of Organisational Studies and Human Resource Management at the University of Sydney, also found that labour demand continues to be influenced by the search for greater flexibility.31 Some companies are already responding to the needs of their
23 Barratt-Pugh, Llandis and Soutar, Geoffery N, 2002. ‘Paradise nearly gained’. National Centre for Vocational Education Research. Accessed at < www.ncver.edu.au/research/proj/nr9038.pdf > , 15 January 2009, 87.
24 Hutchinson, Sue, 2007. ‘Learning and the line: the role of line managers in training, learning and development’. Chartered Institute of Personnel and Development. Accessed at
Future of Management Development - Discussion Paper March 2009 5 employees by providing a flexible environment. One such company is the oil services group, Schlumberger. Schlumberger is one of the leading recruiters of women engineers in the exploration and production industry by having flexible work practices to assist in their needs.32
In addition to providing a flexible environment, according to Linda Holbeche the Director of Research and Policy for CIPD, an important aspect to retaining talented employees is to provide them with challenging and interesting work.33 Indeed, some companies in China such as Citigroup, GE and HSBC are tailoring their positions to have opportunities for real decision making, career development, housing, educational benefits and learning.34 Providing autonomy and development paths are important reasons for many people to stay with a company.35
It is clear that in the 21st century, leaders play a large role in making a company successful and there are changes that should be made to the skills and qualities of leaders today.
Change and innovation
As a new management development approach is required to suit today’s environment, the strong link between management and innovation should also be considered. In his article ‘The adaptable corporation’ Eric Beinhocker suggests that companies need to be innovative, noting that a business faces two basic demands where “it must execute its current activities to survive today’s challenges and adapt those activities to survive tomorrow’s”.36 Most companies are better at executing, and few competently meet both demands. However, the successful companies according to the ‘Leading through uncertainty’ article are those “that make thoughtful choices…by assessing alternate scenarios honestly”.37 This links in with the need for companies to innovate. Innovation has been described as something that can be “sustained and repeated and which has some value or utility”.38 As ‘IBSA’s Blueprint for Action on Innovation’ recognised, recent changes to the world business environment have brought the necessity for innovation to occur at all levels of management.39
Bryan and Joyce also found that “only new approaches to managing employees and organising talent…will provide companies with a durable competitive advantage”.40 The Cutler report noted that providing people with skills to innovate is vital for being able to use the knowledge elsewhere, and we must ask ourselves how management challenges will change as we progress.41
32 Ibid. 33 Holbeche, Linda, 2008. ‘Developing leaders for uncertain times’. Issue 23, Impact. Accessed at
Future of Management Development - Discussion Paper March 2009 6 The reports and articles all demonstrate that in addition to having good leaders and management skills, companies should also be innovative so that their successes are not short-lived.
In Summary
The reports and articles listed here have made suggestions on how companies can improve and utilise management development programs to their full potential.
IBSA is the custodian of nationally endorsed management competencies and qualifications. Since the inception of the FMI, the units and qualifications have undergone a number of iterations. In recent reviews new units have been tweaked or added to, however factors such as the global financial crisis, the increasing globalisation of business networks, and the changing nature of the workforce mean that the time is ripe for a cross- industry project to develop a new suite of management qualifications.
In order to undertake this work the existing management units in IBSA’s training packages will be mapped, against identified salient issues raised in the research, so that we have a clear picture of what exists and where the gaps are in management competencies. Yet still we need more information from industry and the VET sector about how accredited management development programs should be constructed to meet the needs of the future.
Overleaf are some questions that will enable IBSA to make informed decisions about how to plan for and prioritise areas for management development in the longer term. To assist your thinking we have provided two examples of management development frameworks from other countries: Appendix A shows the Singapore model and Appendix B the British model.
Your opinions on Australia’s requirements for management development programs are most welcome.
Please send your responses to the discussion paper (preferably by email) to:
Michelle Wong Precision Consultancy Suite 2, Level 5, 167-169 Queen St., Melbourne VIC 3000 e: [email protected] t: 03 9606 0118 f: 03 9606 0119
Responses must be received by close of business, Friday 17th April 2009.
Future of Management Development - Discussion Paper March 2009 7 Questions
Name:
Title:
Organisation:
Address:
Email:
Telephone:
1. What are the key skills that managers of the future will need?
2. The Manager of 2020 suggested that in the future, there will be a trend away from the ‘content-free’ managers and that we will see a move to instate the technical or specialist manager. Is this true for your industry? What are your thoughts about this?
Future of Management Development - Discussion Paper March 2009 8 3. What is the relationship between leadership and management? What place should ‘ leadership’ have in management development and qualifications in the future? Are there specific problems associated with addressing leadership in a competency-based system?
4. Can you identify gaps in the current provisions for management training and development? What should be covered that is presently missing?
5. Are there any comments you would like to make about the existing management qualifications or units in any of IBSA’s training packages? IBSA’s training packages are listed below, please specify which training package/s you are referring to. 6. BSB07 Business Services ICP05 Printing and Graphic Arts FNS04 Financial Services ICA05 Information and communications technology ICT02 Telecommunications CUF07 Screen and Media Training Package CUE03 Entertainment Training Package CUV03 Visual Arts, Craft & Design Training Package CUL04 Museum, Library/Information Services Training Package CUS01 Music Training Package TAA Training and Assessment
6. At what qualification levels (other than those offered by universities) should management qualifications be offered? Please explain your answer. Note that at present management qualifications range from Certificate III to Advanced Diploma.
Future of Management Development - Discussion Paper March 2009 9 7. At present there is significant duplication in management competencies across training packages. Would Australia be better served by a suite of cross industry management competencies? If so, in what training package should they reside?
8. Are there any further comments you would like to make about the future of management development in Australia?
Future of Management Development - Discussion Paper March 2009 10 Appendix A – Summary of the Singapore Leadership and People Management Workforce Skills Qualifications (LPM WSQ) Framework
Recognising the importance of having strong and effective corporate leadership, WDA developed the Leadership and People Management Workforce Skills Qualifications (LPM WSQ) framework to equip business leaders with industry-validated competencies needed to enhance the competitiveness of their businesses both locally and internationally. Developed in close consultation with key industry partners and validated by senior business leaders across various industries, the LPM WSQ framework comprises a set of 28 competencies grouped into 6 core competency categories:
• • Lead with Vision
• • Drive Change
• • Build Relationships
• • Develop People
• • Achieve Results
• • Personal Effectiveness
The framework covers 4 job levels ranging from the supervisory to C-suite executive levels.
The objectives of the HR and LPM WSQ are to clearly articulate the competencies for the various HR occupational groups and levels of leadership, act as a national guide for employers to plan their training and professional development programmes, assist in their hiring process, and act as a national career development guide for HR professionals and business leaders by outlining clear pathways of qualifications, skills and competencies needed for continuing education and training, professional upgrading and career progression. The WSQ frameworks also guide the design of training and certification programmes to ensure greater quality assurance in training and assessment and identify indicators to track the attainment of the competencies.
Source http://app2.wda.gov.sg/web/Contents/Contents.aspx? Yr=2008&ContId=673
Future of Management Development - Discussion Paper March 2009 11 Appendix B – The British Management and Leadership Model
Background to the standards
The 2008 revised suite of National Occupational Standards for Management and Leadership are a revision of the 2004 management and leadership standards. There are a number of significant amendments, enhancements and additions, which reflect changes in working practice and incorporate feedback from users of the earlier management standards.
In particular, whilst still reflecting the core functions of management, these revised standards place greater emphasis on aspects of work which have gained significance in recent years, for example in the areas of:
• Leadership • Customer service • Knowledge management • Procurement • Managing redundancy
Minor amendments have been made to a significant number of units to take account of the following issues that have become increasingly important since 2004 due to change in Government legislation, cultural and environmental development, and technological advances:
• Ageism • Cultural awareness • Diversity and inclusion • EU impact and regulations • Globalisation • International benchmarking • Managing diverse teams • Managing growth • Managing remote teams • Managing without power • Managing your boss • Matrix management • Sustainability
The structure of the standards has also been developed with the aim of making the standards more
12 concise and accessible, to encourage their use in a wide variety of settings. Therefore, while these standards will continue to provide a framework for the development of qualifications, they have also been designed to support a wide range of human resource management and development purposes.
Source http://www.management-standards.org/content_1.aspx?id=10:1917#
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