LEADERSHIP FOR CHANGE. CMI’s Management Manifesto. June 2017 FOREWORD The 2017 General Election While the UK can be proud of many world-leading businesses, it has has been defined by a long tail of poorly managed and Brexit and the forthcoming unproductive organisations. The UK-EU negotiations. UK lags behind its G7 competitors’ average productivity levels by some Whatever political deals 18%. Poor management costs UK emerge, Brexit throws into employers some £84bn a year and sharp relief several urgent it is, according to authorities like the OECD, one of the biggest factors in questions about the UK’s our competitive weakness. Compare economy, education and that cost to the IFS estimate of a skills. They each demand £75bn annual hit to the economy if the answers if the UK is to UK leaves the EU single market. thrive. They are linked by So while debate rages over the future one underlying issue that is of the UK’s trading rules, we risk losing sight of the prize. Improving too rarely talked about: an management and leadership across imperative to improve the the UK and closing the productivity gap quality of management could be even more important to the and leadership in the UK. country’s future. Yet closing that gap will be impossible while many companies remain choked by outdated management cultures. Too many people – including middle managers – are disengaged from their work, lack trust in their leaders, and go unheard when it comes to management decision-making. We need to radically overhaul business cultures and work in ways that blend better with people’s lives, give people more power to perform, and make flexibility a reality on both sides of the employment relationship. 2 It’s a rallying cry for government, businesses, public, educational and professional organisations like CMI to work in partnership for change. We also need to fix the glaring Yet we clearly also need a new Complex challenges demand lack of diversity in so much of UK emphasis on home-grown skills. We collaborative answers so our management. This is the moment to have too many ‘accidental managers’, Management Manifesto is not a eradicate gender imbalances, adding who are promoted into management simplistic shopping list of actions £150bn annually to the UK economy. jobs – then left to sink or swim. It’s vital that managers demand from the That means making a success of that people have the right opportunities Government. It’s a rallying cry for gender pay transparency and pushing to learn. We need a commitment to government, businesses, public, change forward by ensuring that new high-quality apprenticeships and educational and professional higher-level jobs are advertised as better access to funding, especially organisations like CMI to work in flexible by default, when only 9% for small business, serving both young partnership for change. Partnership currently are, or making sure that one people and helping to upskill people is innate to CMI. We know its value in in ten apprenticeships are used to already in work. upskilling, accrediting and qualifying support parents returning to work. And the people who lead and manage we need more transparency about pay We also must do better for young organisations. That spirit of partnership and progression by employees’ race people making the leap from education now needs to shape how we tackle the and ethnic background to make sure to work, not only with apprenticeships challenges before us. the ‘management pipeline’ is rich in but also with a new school-to-work talent and open to all. syllabus, new measurement of The good news is that many of schools’ performance on helping our skills problems are eminently That is imperative because the pupils progress into further or higher fixable. There is an increasing will to economy needs 1.9m people coming education or apprenticeships, and a do something about it. This short into management jobs over the higher education system that focuses Manifesto sets out our priorities and decade to 2024. Many managers fear on delivering the practical management whether you’re a politician, a business damage from the possible end to free and leadership skills that underpin leader or a manager, we look forward movement of people from the EU and employability. CMI supports the to working with you to turn these restrictions on other immigration. We Teaching Excellence Framework to aspirations into reality. need to ensure employers have access drive this focus on employability to employees from abroad who bring for all students. much-needed specialist skills, and that we keep the door open for students who add huge value to our higher education sector. Ann Francke MBA CMgr CCMI FIC Chief Executive, CMI 3 EXECUTIVE SUMMARY 1 2 Our Management Improving Building Trust Through Manifesto is not simply Productivity Better Business Cultures a wish list for the next Through People and Governance Government. It is based on a vision of collaboration The UK’s productivity lags Trust in leaders is at rock and partnership between 18% behind the average of its bottom: from the rejection of policy makers, employers, G7 competitors – 35% behind ‘elite’ or ‘expert’ views seen in individual managers, Germany. Closing the gap means the Brexit vote to a breakdown recognising the pivotal role of of trust in the workplace, fuelled and of course CMI as management and leadership by outdated management the professional body skills in improving productivity cultures, secretive leaders and for management and and a national focus on replacing runaway executive pay. ‘accidental managers’ with leadership. confident, competent, qualified We need more transparency from managers. business, underpinned by regulation We identify five key areas on reporting pay ratios; pay that is To provide this focus on improving linked to customer and employee where collaborative management, CMI will work with engagement; and increased action is needed. government and key partners to build employee voice in management a National Management Index to track decision making. progress and demonstrate the impact on business performance and national Leaders need to do much more productivity. to call out poor behaviour and be role models for high ethical We need support for the new standards. They need to be more Productivity Council, which is led by transparent and communicate business. £13m has been pledged but better, and executive pay should secure funding is needed for the next be aligned with the behaviours five years to allow the Council to make that support trust. a difference. 4 3 4 5 Inclusive Leadership – Improving Employability The Age of Apprenticeships Harnessing Diversity and – Better Access and – Get In and Go Far in Challenging Group Think Opportunities for Young Management People The evidence is increasingly clear: The UK needs 1.9m new The new Trailblazer diversity delivers results. Better managers by 2024 so we need Apprenticeships offer high gender balance in the workplace to strengthen routes into quality learning, including could add £150bn a year to the management. We need a new degree-level programmes like UK economy. We need to focus school-to-work syllabus, with the Chartered Manager Degree on the ‘missing middle’ that sees better engagement between Apprenticeship. They meet women under-represented in employers and educators, employer needs and offer real middle management and upwards, driven by new outcome opportunities both to young facing a ‘glass pyramid’ on pay and measures for schools. people and to those already progression. in work, supporting lifelong In higher education we support the learning. This means making a success of Teaching Excellence Framework to gender pay transparency and pushing drive a focus on employability for The new Government needs to change forward by ensuring that all students, and CMI will work with back the continued roll out of these higher-level jobs such as management all of its education partners to help apprenticeships. We support the roles are advertised as flexible by develop the practical skills, global Apprenticeship Levy as a much- default, when only 9% currently are, mind-set and ethical behaviours needed answer to long-standing and making sure that one in ten that employers need. We also need under-investment in skills. Access apprenticeships are used to support to protect the access of overseas to funding should be improved, parents returning to work – as well as students and academics to UK’s in particular for small businesses. a ‘silver quota’ for the over-50s. higher education sector, a national Government also needs to work success that must be nurtured. with partners to improve awareness and understanding among young people, parents, employers and existing employees about the opportunities available. 5 1. PRODUCTIVITY THROUGH PEOPLE RECOGNISING MANAGEMENT AS THE KEY DRIVER Management and leadership is critical to our economic success. The UK currently has an estimated 2.4m accidental and unskilled managers, promoted into leadership roles because of their functional expertise but left to sink or swim when it comes to management. As a result, poor people management has been calculated to cost the UK economy £84bn a year – £9bn more than the Institute for Fiscal Studies’ estimate of the potential cost of leaving the EU single market, of £75bn a year. Not enough employers are investing in developing the skills of their existing workforce, or training new managers to be more effective. More must be done as we prepare for a post-Brexit world of home-grown management talent. Productivity has been identified as a While many assume productivity is major risk to the UK’s growth agenda cured through investing in technology for the post-Brexit referendum world. or infrastructure, the Organisation WHY IT UK productivity is currently 18% lower for Economic Co-operation and than the average of the rest of the Development (OECD) confirmed that the MATTERS G7, and a recent Investors in People outstanding primary factor in addressing report found that £84bn is wasted the productivity gap is improving in the UK each year through poor management and leadership.