The Radical Beauty of Three Simple Management Practices – Nicholas Bloom, Raffaella Sadun, and John Van Reenen – HBS Faculty – Harvard Business Review. The authors identify three simple management practices:
- set targets
- establish incentives
- monitor performance
that increase productivity, reduce errors and improve annual sales growth. At first glance, it may seem that this insight is similar to identifying the best diet practice as eat less and exercise more. And similar to the scarcity of these practices among dieters, the authors’ research reveals how rare good management practices are. In their analysis only 15% of U.S. companies scored above 4 on a five point management-practices scale. They found that most organizations struggle to set targets, remove poor performers, collect useful data or provide appropriate incentives. Strangely similar to most dieters inability to eat more fruits and vegetables, establish a regular exercise routine and cut out unhealthy snacks.
The hard part for many managers and dieters seems to be inability to move from knowing what to do to actually doing it — we all know that we need to address non-performers, but the really hard part is actually doing it. In my mind, one of the tests of a manager is his/her ability to have difficult conversations — to have a conversation with a non-performer which is likely to be uncomfortable, awkward and may result in the non-performer being upset, offering excuses or leaving the conversation not liking the manager. Nonetheless, these conversations are key to the success of an organization.
Nicholas Bloom, Raffaella Sadun and John Van Reenen make a real contribution in this piece because they identify the problem (the lack of setting targets, establishing incentives and monitoring results), argue that any manager can take the initiative and implement these practices, and demonstrate the positive effect on results of making these changes — for example, a small change may yield a 23% increase in productivity. These simple management practices are the basics for good management and should be part of every managers toolkit.
Now I just have to get back to eating less and exercising more.