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Home > News > January 2005 > 20-Jan-2005

Eight year study assesses impact of management development on business

According to a report published by the Chartered Management Institute there is new evidence of the links between organisational performance and investment in management and leadership development (MLD). Called 'Management Development Works: the evidence', it offers an insight into changing patterns of MLD across organisations of all sizes, over an eight year period.

The research, which is based on interviews with 1,000 managers, showed:

  • Improved business performance when development is linked to business strategy
  • A significant shift in the priority given to management development by employers
  • A change in attitude towards what makes a good manager and how development should be delivered
  • Trends amongst organisations towards active talent management and fast-tracking high potential managers

The report shows managers claiming a significant rise in the impact MLD has on their organisations. Asked the extent to which they agreed that MLD developed managers to meet business needs, a rating of 7 out of 10 was given. Managers also suggested that when MLD is linked to specific skills that address business needs, organisational productivity levels climb.

The findings indicate that many employers are now taking more responsibility at a senior level for employee development within organisations. In 2004, 51 per cent of CEOs or Boards were directly responsible for initiating MLD policy, compared to 43 per cent in 1996. Senior involvement in implementation was recorded at 24 per cent, an increase from 15 per cent in 1996.

The researchers say that for the first time since the start of the survey, the belief that "leaders are born, not made" has been eclipsed. Managers are now expressing the view that on-the-job experience is more valuable than natural ability. The report also shows that line managers are now focusing on job-related development, such as in-house MLD and job-specific qualifications.

Almost half (45 per cent)of UK organisations allocate a specific budget for management training and 49 per cent of managers claim their employer now has a written policy on management development, compared to 37 per cent in 2000.

Almost 90 per cent of organisations claim to have regular appraisals to establish training requirements and more than half (57 per cent) admit to 'talent management' by selecting high potential managers for intensive development. The report also shows that the skills most sought after are managing people, leadership and meeting customer needs. Looking forward, managers are looking to develop skills including the management of change and risk and the ability to facilitate organisational learning.

"Learning and development has often been conducted with the implicit belief that it is beneficial. However, this research project provides positive evidence of the value of management development and shows that organisations which base MLD on strategic business needs clearly benefit from performance improvements," said Mary Chapman, chief executive of the Chartered Management Institute.

Alastair Reid, Partnership Manager, DTI Achieving best practice in your business said, "This research shows organisations that training and development makes good business sense. DTI Achieving best practice aims to show businesses what works in other organisations and to encourage them to focus on improving productivity by learning from others. The most successful businesses take management development seriously, creating a culture of continuous learning and development, and we would urge others to do the same."

About the research

The research involved detailed 45-minute telephone interviews with 500 HR managers and 500 non-HR managers across various sectors and organisation sizes. The data from this research has also been compared to data collected in 2000, 1996 and in some cases 1986, when the Chartered Management Institute first began to formally track trends in management and leadership development. The report is available at: www.managers.org.uk/researchreports.

'Management Development Works: the evidence' has been sponsored by the Department for Trade and Industry, Investors in People UK, the British Quality Foundation and the Learning and Skills Council. The report was prepared by Dr Chris Mabey, Birkbeck College, University of London and the research was overseen by Professor Leo Murray, formerly of Cranfield School of Management.

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