Companies on a learning curve

Citation

(2000), "Companies on a learning curve", Journal of European Industrial Training, Vol. 24 No. 8. https://doi.org/10.1108/jeit.2000.00324hab.008

Companies on a learning curve

Companies on a learning curve

Keywords: Management development, Training

British executives are better trained and in a stronger position to match the skills of their overseas competitors than ever before.

Over the past decade, the quantity and quality of management training in UK organisations has accelerated and, for the first time, new research, Achieving Management Excellence by the Institute of Management (IM), indicates that, undertaken in a consistent and systematic way, it does have an impact on financial performance.

There has been a major increase in training, which has risen by 18 per cent in larger organisations and 25 per cent in smaller companies since the last IM study, A Portrait of Management Development, in 1996. The average is now six-and-a-half days in both large and smaller organisations – an increase from five-and-a-half and five days respectively.

There is also growing recognition of the value of a planned and co-ordinated approach to training in British companies. Over half (51 per cent) now have a written statement of management development – up from 43 per cent in 1996. And this approach is showing results. Among the organisations that took part in both surveys (1996 and 2000), 60 per cent of those who give management training a high priority and undertake more of it also reveal an increase in financial turnover compared with others in their sector. In contrast, of those companies which give lower priority to management development, only 46 per cent report increased turnover.

UK business is starting to see training as an investment rather than simply a cost with four in ten managers saying their organisation has an explicit management development budget. In larger organisations, this rises to almost half (49 per cent) – up from 40 per cent in larger companies in 1996. The average amount spent per manager is just over £1,000 a year. However, over half of organisations still have no separately defined budget in this area.

When it comes to identifying training needs, 76 per cent of HR managers use appraisals. However, line managers place appraisals below other triggers for development such as individuals' own initiative (58 per cent), an informal chat with the boss (41 per cent) and the need to improve performance in their current role (41 per cent). Only 35 per cent use appraisals, indicating a mismatch between the perceptions of HR and line managers.

The top reasons given for undertaking training are to help managers do their job better or progress further in the organisation, to motivate individuals and because it has become an integral part of company strategy. However, in those organisations with a strong management development policy framework, company strategy is the main driver. On the downside, for more than eight in ten organisations, lack of time is the strongest factor preventing managers' training. Nearly half (48 per cent) also cite cost.

The most important change in the type of training managers are undertaking is the shift in the balance of formal and informal activity. In 1996, 35 per cent of managers said their organisation undertook more formal training – rising to 40 per cent in 2000. At the same time, in 1996, four in ten reported more informal activity – now at 35 per cent. This may suggest that a wider range of activities is now becoming recognised and formalised.

The demand for management skills is growing. The research suggests a shift away from fast-tracking small groups of managers towards developing strong management skills across broader levels and layers of the workplace. While technical "hard" skills, such as financial management, remain important, the most sought after skills are those focused on bringing out the best in people and teams. The skills most in demand are those that have been called "soft" skills but are increasingly seen as hardest to deliver – managing people, leadership, team working and customer focus.

More organisations are now developing ways to assess the success of their management development programmes. Almost three-quarters (72 per cent) review their activities – an increase from 67 per cent previously. The most popular ways HR managers use to measure the impact of training are by assessing whether business objectives and targets have been achieved (71 per cent), staff motivation has improved (64 per cent) and individual performance has improved (63 per cent).

Mary Chapman, director general of the Institute of Management, commented: "Significant progress has been made in raising the importance of management training on corporate agendas and in developing more coherent policies. Although this is encouraging news, the imperative to improve continues. This study provides clear signposts and recommendations for future action, designed to help organisations respond more effectively to the management skills challenge".

The report, Achieving Management Excellence – A Survey of UK Management Development at the Millennium, by Dr Chris Mabey and Professor Andrew Thomson, of the Open University Business School, is available, price £50.00 (IM members £25.00) from the IM public affairs department, Tel: +44 (0) 20 7421 2704.