Why you should invest in Management Development
While attending a recent induction session for the SCCUL Mentors Programme, I became aware of a 2010 report by Forfás on Management Development in Ireland. https://dbei.gov.ie/en/Publications/Publication-files/Forf%C3%A1s/Management-Development-in-Ireland.pdf
The Report quotes findings from a McKinsey review of management practices across 14 countries which found that
- Management Practice in the high value manufacturing sector is above average .
- Agreggate management practices across all manufacturing sectors in Ireland lag performances amongst similar firms in the highest performing countries.
- Mean performance in Ireland is also below global averages for almost all sectors of manufacturing other than the high value manufacturing sector.
- There is considerable variation in performance by sector and firm size, and firm category. Irish firms employing between 50 and 250 employees are ranked just 12th out of 14 countries.
The Report goes on to highlight that there is a strong relationship between management practice and business performance. McKinsey found that improved management practice is associated with large increases in productivity and in output. The research findings suggest that a single point improvement in a firm’s management practice score is associated with an increase in output equivalent to that produced by a 25 % increase in the work force or a 65 % increase in working capital.
Statistics such as those make a very strong case for firms to invest in management development. Who would not want output increases equivalent to a 25% increase in the workforce? If the research is correct and we are starting from a low base, then it must be quite realistic to achieve single point increases in the management practice score.
A first step for any firm would be to carry out a Now Assessment – where are we now as regards management practice. From there establish where you want to be and then put an action plan in place to close the gap.
A very quick way of doing something like that would be to complete our GPS diagnostic which can be found here – https://www.accountsplus.ie/component/content/article/75-growth-and-profit-solutions-diagnostic.html.
If you have any questions about this blog post please contact jim(at)accountsplus(dot).ie
