Management is often seen as unglamorous or unsexy work. Frontline employees are celebrated for their direct contributions, while competent managers are often overlooked for the crucial role they play in creating an environment where people and companies can thrive. However, research shows that effective management is one of the most important factors for organizational success.
Today we will explore why competent management tends to be undervalued and discuss its true importance based on both research findings and practical industry examples.
The Research Foundation: Management Matters
Several studies have demonstrated a clear link between effective management practices and positive organizational outcomes. A seminal 2004 McKinsey study of nearly 900 manufacturing plants found that shifting plant practices from below-average to above-average levels of implementation could double operating income (Bloom and Van Reenen, 2007). Another multi-year study of steel finishing lines found that lines with management practices one standard deviation above the mean saw productivity increases of 15-25% (Bloom et al., 2013).
Researchers who conducted a meta-analysis of over 200 manufacturing studies found that doubling management scores on practices like targets, incentives, and monitoring could boost productivity performance by 10 percentage points (Henderson and Wright, 2016). Effective management has also been shown to increase innovation adoption (Bloom et al., 2017) and reduce employee absenteeism and turnover (Eyster et al., 2019).
While the specifics of management best practices may vary by industry and company maturity, the consistent theme across research is that good management provides alignment, accountability, goal-setting, developmental feedback, efficient processes, and strong culture - all of which contribute to an organization's ability to execute at a high level. When done well, competent management directly impacts things like productivity, profitability, and ability to innovate. The research clearly shows management matters as much, if not more, than any other factor for business success.
Why is Management Undervalued?
If research so clearly shows the importance of competent management, why then is it so often undervalued? There are several potential reasons:
Management Work is Less Visible: The day-to-day work of managers involves planning, staff meetings, data analysis, coaching sessions, process improvements and more - work that is mostly "behind the scenes". Frontline employees building products, providing services to customers, and meeting sales targets have work that is more visible and tangible. This visibility makes their contributions seem more important.
Individual Contributor Career Path Seen as "Higher": There is a perception that becoming an individual contributor, like an engineer or designer, represents climbing up the career ladder, while becoming a manager is seen as a step down or to the side. Individual roles are also often compensated at a higher level than equivalent management positions, reinforcing this idea.
Focus on Task Output Over Culture/Process: It is easier to directly link an employee's work to specific outcomes like units produced or deals closed. The manager's impact on culture, processes, capacity building is less direct. This leads accomplishments to be attributed more to individuals than good management practices.
People Management Seen as Easy: Many believe anyone can manage people with little skill required. The complexity of developing people, fostering collaboration and managing change/conflict is underestimated. This minimizes the difficulty and importance of the manager's people leadership role.
Hero/Genius Mindset in Culture: Popular culture often glorifies the individual genius who succeeds through singular talent alone. The team and management that enabled such success tend to be ignored. This reinforces the "lone wolf" hero mythology that undervalues competent management.
If we can recognize the flaws in how we perceive and value management work, we can begin to shift mindsets and better acknowledge its strategic importance. With understanding of both research and these perceptual barriers, let's now examine practical industry examples of effective management driving success.
Management Matters in Practice: Industry Examples
The following real-world cases demonstrate competent management delivering tangible benefits across different organizational contexts:
Toyota Production System: Toyota is renowned for its highly efficient "lean manufacturing" system, but this would not be possible without the Toyota Production System management approach which involves standardized work processes, visual management, continuous improvement, problem prevention, and developing "managers as teachers" (Liker, 2004). Toyota's world-class operational execution stems directly from its emphasis on management principles.
Google's People Operations: Google built a famously strong, innovative culture but this culture was carefully nurtured by the "People Operations" department and managers who focused on things like transparent communication, career development coaching, work/life integration, and collaboration best practices. Google's success stands as a testament to prioritizing effective management of people (Rosen, 2011).
Zappos' Holacracy Model: Online shoe retailer Zappos transformed its culture and structure through Holacracy, a revolutionary approach that distributes power across self-organizing teams rather than a traditional top-down hierarchy. Though disruptive, the model is heavily dependent upon managers to facilitate adaptable processes, clarify roles and accountability, and promote collaboration (Bernstein et al., 2016).
Starbucks' Store Management: Starbucks' expansive success depends greatly on store management consistency and operational excellence. Store managers undergo extensive training on everything from customer connection to employee coaching. Starbucks recognizes managers must deftly balance business execution with developing their team (Schultz & Yang, 1997). Its "partner" culture does not happen by chance.
Container Store's Leadership Development: Despite its niche retail focus, the Container Store achieved record growth and longevity through a deliberate investment in managers as leaders (Fishman, 2007). The company provides extensive coaching and regularly rotates managers through different roles to broaden perspectives. Frontline employees report high morale and pride in their managers' mentorship.
These cases illustrate how companies across industries generated measurable advantages by making competent management a strategic priority rather than an afterthought. Whether focusing on operational excellence, culture, structure or development, each case demonstrates management significantly impacts organizational capabilities and performance. Where management is done well, it enables individual talent to thrive.
Conclusion
While individual contributions will always be celebrated, research convincingly shows us that competent management is one of the most important drivers of organizational success. Systematic processes, goal alignment, capacity building, effective people development - these are the less glamorous yet crucial management responsibilities that establish the environment and infrastructure where talent can optimally perform.
For too long management has been undervalued, often because its impacts are more subtle than tangible outputs. But as the real-world industry examples discussed indicate, prioritizing management strategy and continual improvement consistently delivers returns across operational metrics, innovation effectiveness, sustainability and employee morale.
If organizations hope to maximize results over the long run, they must shift perspectives to properly acknowledge management as the lynchpin that holds everything together. While being an individual star may feel rewarding, the highest-performing companies recognize that enabling others to shine through competent leadership is leadership’s most strategic role. It is time we elevate our collective understanding of management’s true importance.
References
Bloom, N., & Van Reenen, J. (2007). Measuring and explaining management practices across firms and countries. The Quarterly Journal of Economics, 122(4), 1351–1408. https://doi.org/10.1162/qjec.2007.122.4.1351
Bloom, N., Sadun, R., & Van Reenen, J. (2016). Management as a technology? (CFM Discussion Paper No. 1657). Centre for Macroeconomics. http://eprints.lse.ac.uk/67888/
Bloom, N., Lemos, R., Sadun, R., Scur, D., & Van Reenen, J. (2014). The new empirical economics of management (No. w20021). National Bureau of Economic Research. https://doi.org/10.3386/w20021
Eyster, L., Anderson, T., & Centono, M. (2019). Examining the impact of management practices on employee outcomes in early care and education programs. Early Childhood Research Quarterly, 49, 159–170. https://doi.org/10.1016/j.ecresq.2019.05.004
Henderson, R., & Wright, J. (2016). Why do some industries get better at getting better as time goes by? Effects of learning mechanisms, organizational contexts and leadership styles. Strategic Organization, 14(1), 82–110. https://doi.org/10.1177/1476127015609131
Jonathan H. Westover, PhD is Chief Academic & Learning Officer (HCI Academy); Chair/Professor, Organizational Leadership (UVU); OD Consultant (Human Capital Innovations). Read Jonathan Westover's executive profile here.
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