In college I learned about Chaos Theory, sometimes called Butterfly Effect in which small differences in an initial condition result in divergent outcomes in dynamic systems. In layman’s terms, my fellow students and I were fond of saying that when a butterfly flutters its wings over your head, the repercussions will be felt, eventually, on the other side of the world. The graphic of the double rod in the link below demonstrates how, by releasing the rods more than once, many iterations of the drawing will appear, resulting in a multitude of graphical outcomes with the same rods.
When I was a student, it was fun to think about how my actions could affect not just my peers in school, but others many times removed from my classroom or dorm. And now, as an adult, I can see how intensely my actions affect others – especially in the workplace.
A Harvard Business Review blog from March 2014 described the financial costs to companies that hire or promote managers perfunctorily. Specifically, “bad managers cost businesses billions of dollars each year” report the blog’s authors, and result in a significant competitive disadvantage for those companies compared with the companies that hire or promote thoughtfully. They cite a Gallup study in which there was a 70 percent variance in employee engagement scores across companies’ business units and recommend that all businesses put a great deal more thought into hiring or promoting people as managers. Great managers, stated the Gallup poll, have the following attributes:
- They motivate every single employee with a compelling mission and vision,
- They drive outcomes and overcome obstacles through assertiveness,
- They create a culture of accountability,
- They build relationships in which there is trust, open dialogue and transparency, and
- They make decisions based on productivity, not politics.
Having studied hundreds of companies and measured the engagement of 27 million employees, Gallup found that, typically, managers promoted from the ranks aren’t necessarily gauged by the five attributes above. Rather, promotion comes about because management feels that someone deserves, by dint of longevity or loyalty, a managerial role. However, without some intrinsic talent to individualize and focus on each team members’ strengths and weaknesses, managers often get it wrong. You can train people in managerial attributes, but there must be some emotional intelligence present to be really good at being a manager. Companies that do so, said Gallup, can increase their employee engagement and achieve – on average – 147 percent higher earnings per share than their competition.
Small manufacturers are at substantial risk for high turnover because so few have the extensive resources of larger manufacturing firms to find and hire good managers. Among SMMs in a Boston College survey of talent recruitment and loss risks, 30 percent of SMMs say that providing effective supervision is something they worry about to “a great extent”. With good reason, the survey goes on to say that the median cost of replacing manufacturing workers is $5,000 per employee (much larger than in other economic sectors). Clearly it pays (pun intended) to be very thoughtful about choosing and training your managers.
So if you think the bad manager in the business unit is doing no harm to your business, you may want to reconsider — before there is chaos.