The Downstream Damage of the Leadership Skills Gap

Companies are struggling with a critical problem — finding managers with the right skills to lead their organizations. This problem not only has damaging downstream effects for businesses, but it’s also hurting the global economy.

An analysis by job market analytics company Burning Glass Technologies found that management skills “represent one of the biggest skills gaps in the job market” and that managers have larger skills gaps than the people they manage. The Bank of England’s chief economist has argued that poor management is the principal cause of the U.K.’s stagnant productivity. Studies indicate that “bad management could be an important factor behind the lower levels of productivity and development of many countries,” according to the International Growth Centre. A major reason is that people commonly advance into managerial positions before acquiring the requisite skill set for effective leadership. Indeed, the Peter Principle in organizational behavior states that employees are promoted to their level of incompetence — and there is evidence that this may actually be true.

So what’s happening to the billions of dollars that companies spend on leadership development each year? Managers take plenty of time out of busy schedules to sit in classrooms and attend residential business schools. But these efforts often fail.

And unfortunately, managers often don’t realize that they need to engage in development. Gallup research has found that “most managers believe they are doing their jobs well and don’t see the need for change.”

This creates further problems downstream. When managers don’t focus on gaining new skills, their reports are less likely to do so as well.

Working with businesses on these efforts for more than six years as cofounder of Filtered, I’ve repeatedly seen that employees feel comfortable taking time to learn if, and only if, there’s encouragement — and participation — from line managers all the way down the chain. Otherwise, they understandably assume that any encouragement for learning and development coming from the C-suite is just lip service.

Until leaders can get serious about their own development as managers, the skills gaps throughout their organizations will only continue to grow.

Guidance From Executives

Solving this problem requires action from senior executives. It’s up to them to make clear that they want and expect managers, not just the rank and file, to put real time and energy into building skills.

This emphasis on learning is already a priority for some well-known executives. Microsoft CEO Satya Nadella emphasizes to his team that, “We want to be not a ‘know-it-all’ but ‘learn-it-all’ organization.” Amazon CEO Jeff Bezos underlined the importance of high standards and teachable skills in his last annual letter to shareholders.

AT&T CEO Randall Stephenson says he wants his staff to spend five to 10 hours a week learning. I recommend that all companies set a similarly clear, tangible aspiration for people at all levels to develop themselves. Managers need to hear the message that they will be judged, in part, by how well they and their teams develop new skills.

Discover Your Skills Gaps

To see what your skills gaps are as a manager, ask for open, honest feedback from those you work with — your superiors, peers, and reports. Julian Birkinshaw of London Business School suggests managers should specifically ask employees, “Would you recommend me?” In fact, 360-degree assessments can be a specifically helpful tool in getting the kind of unvarnished feedback that can be most constructive.

There are also technological tools to help. One of the reasons I’m committed to advancing the use of algorithms in skill development is that they can help identify areas in which managers need the most work and recommend useful learning content. Algorithms can also track progress and engagement, and tweak recommendations for further learning content based on individual skill signatures.

While the jury may still be out on AI’s capabilities in many areas, when it comes to serving as useful recommendation engines, these technologies are long past proven.

Break Down the Workweek

Managers should also get a better handle on what they and their reports actually spend their time doing at work.

According to McKinsey, the average knowledge worker — which includes managers — spends 28% of her time emailing, 19% gathering information, and 14% “communicating and collaborating internally.” This means a staggering 61% of time is spent on a relatively small number of activities.

When looking for which skills to develop or improve, get the biggest bang for your buck by focusing on skills that will make a substantive difference for you and your teams – and become great at those.

Managers are the cultural linchpin of their organizations and must be empowered with everything they need to succeed. As we enter into a period of even greater business change, let’s make sure managers have the chance to build the skills to help lead the way.