Author: Mandar

Why are Managerial Effectiveness Surveys the need of the hour?

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What is a managerial effectiveness survey?

A managerial effectiveness survey is a tool used to assess the performance and effectiveness of managers within an organization. This type of survey focuses on evaluating a manager’s ability to lead, communicate, motivate, and support their team members, among other managerial competencies. It often includes questions related to leadership style, decision-making processes, interpersonal skills, and the manager’s ability to achieve team goals. The feedback obtained from this survey is primarily used to identify areas where managers can improve their skills, enhance their leadership qualities, and better support their teams.

In today’s highly competitive global economy, organizations are realizing the fact that their managers are one of the most important assets; they drive business and generate revenues for the organization. However, in order to ensure sustained growth, organizations need managers who are highly ‘effective’ and who demonstrate requisite values, skills, knowledge and competencies.

64% of employees with ineffective managers plan to leave their organization

Managerial Effectiveness’ has garnered much attention in recent years due to its importance to the organization as a whole. Unfortunately, a plethora of research indicates that employees consider their managers to be ineffective! Managers also struggle especially in their role as new managers and fail to deliver what is required of them. This may prove extremely costly for the organization who invest heavily in hiring and onboarding managers.

Apart from incurring revenue losses, our recent research states that 64% of employees with ineffective managers are planning to leave. Such mass exodus may not be good for an organization’s reputation.

There are myriads of reasons for managerial ineffectiveness

Let’s look at some of these reasons and ways to fix the same.

  1. Accidental Managers – Accidental managers are individuals who are promoted to take on a manager’s role simply because there is a vacant position and they happen to be available to take charge. In reality, they are not ready for the role and the challenges associated due to absence of requisite skills and competencies. One of the key reasons is that they are not assessed on these dimensions by valid instruments/tools before taking on the role of managers.
  2. Leadership blindspots – Many managers carry hidden weaknesses that are not known to them but can be easily seen by others. These blindspots are potential threats for the organization and it is extremely important to recognize these before it’s too late. Such blindspots can be easily identified using assessment tools. 
  3. Lack of support from organizations – At times, organizations do not provide the necessary training and support to their employees before they embark on a new journey as managers. Consequently, they do not understand a new role’s requirements and challenges and remain ineffective. Research also indicates that around 82% of managers coming into the job lack adequate training. 
  4. Wrong Role Models – It has been observed that new managers often mirror the behaviors and actions of their own managers, and these actions may not necessarily be right! This mainly happens due to the lack of exposure and the right amount of training provided to the new managers during the initial phase of transition. They remain uncertain and indecisive about how to behave and create a win-win situation. Consequently, they unknowingly project behaviors that are not very effective and merely a reflection of their bosses’ behaviors. This wrong role modeling accounts for managerial ineffectiveness that cascades down to the organizational level.

How to Measure Managerial Effectiveness: Organizations’ Stance

There are numerous ways to determine and measure managerial effectiveness e.g. comprehensive assessment centers that call for rigorous planning and execution and one-on-one sessions. However, administering well-constructed surveys is perhaps the easiest and most effective way to gather responses from many people at once.

‘Managerial Effectiveness Survey’ measures employees’ perceptions and overall satisfaction with their managers on various dimensions. Mostly the survey focuses on the core values, behaviors, and leadership qualities that make any manager effective. The outcomes enable organizations to identify manager’s strengths and weaknesses, uncover relationships with their team members, and determine team members’ engagement levels and training and development opportunities for the managers. Depending on the needs, such surveys can be floated in a timely fashion to get a clear picture.

A ‘Managerial Effectiveness’ survey can be considered a valuable tool for organizations for several reasons. Here are some key points explaining the relevance and need for such surveys:

  1. Ascertaining Managerial Fit – Every organization carries its own set of values and norms and expects its leaders to own and reflect the same. Such surveys can help determine if managers are aligned with the organization’s mission, vision, and strategic goals. Any deviation found can be addressed. The survey can help you figure out if your managers have the needed skills to lead your organization effectively. 
  2. Aids Performance Appraisal – A managerial effectiveness survey supports the performance appraisal process by throwing ample observations around managerial behaviors that make them effective and successful in their given roles. The survey also gives valuable insights into managers’ strengths and areas of improvement, which help facilitate the performance appraisal discussion and curate the future course of action! 
  3. Uncovering Strengths & Weaknesses – The survey helps identify managerial strengths and strong behaviors, allowing organizations to leverage and build upon them. At the same time, identifying weaknesses will enable organizations to provide targeted training and development programs to improve managerial skills and address any gaps found. 
  4. Employee Engagement & Satisfaction – A manager’s effectiveness has a direct impact on employee engagement and satisfaction. Research by Great Manager Institute® which collected responses from over 30,000 employees revealed that employees who rated their managers as effective were found to be more engaged and satisfied. The survey is a comprehensive one that gauges how well managers are doing in their role, creating a positive work environment, fostering teamwork, addressing employee concerns, and treating them with respect and dignity. 
  5. Succession Planning – Assessing managerial effectiveness is crucial for succession planning. Such surveys can help organizations identify high-potential individuals who may be groomed for leadership roles in the future. 
  6. Problem Solving – Effective managers are adept at decision-making and problem-solving. The survey can assess how well managers are prepared to handle challenges, make decisions, and navigate complex situations. 
  7. Retention –Employees often leave organizations due to issues related to managers. In fact, research by Great Manager Institute® shows that 67% of employees decide to stay or leave basis the effectiveness of their managers.
  8. Communication from Managers – When it comes to communication between management and their team, research has shown that when managers talk to their employees on a regular basis, those employees are more engaged. These surveys are a good way to determine how communicative management is with their team and, as a result, how engaged employees are with their co-workers, management, and the company as a whole.

Managerial Effectiveness Survey or Engagement Survey:
Which one to choose?

Many organizations also leverage engagement surveys to understand employees’ perceptions about various aspects present in the organization which eventually determine their engagement levels.

Engagement surveys are all-encompassing and focus on the broader concept of employee engagement and satisfaction within the organization. Questions in engagement surveys may cover topics such as contentment with various systems and processes, job satisfaction, work-life balance, career development opportunities, recognition, and the overall work environment.

The primary goal of engagement surveys is to understand how engaged and motivated employees are, as well as to identify factors that may contribute to low morale or eventual exit from the organization. Managerial effectiveness surveys on the other hand, target the managerial or leadership aspects in the organization which impact employee engagement.

The basic premise is that employee’s relationship with their managers primarily determines their engagement levels. A lot of research has been conducted in this respect which indicates that employee engagement is directly proportional to managerial effectiveness.

Managerial effectiveness surveys and engagement surveys are both great tools used in organizational settings to gather feedback and assess different aspects of the workplace, but they focus on different dimensions of the work environment and organizations need to figure out what exactly is their focus. If it is more manager-centric then managerial effectiveness surveys certainly give an edge over engagement surveys.

Considering the fact that the managerial effectiveness survey provides a comprehensive view of how well managers are performing, contributing to organizational success, and fostering a positive work environment, such regular assessments will help organizations adapt to changing needs and ensure that their leadership remains effective and aligned with organizational goals.

About Great Manager Institute®’s People Managerial Effectiveness Survey

The People Managerial Effectiveness survey is a well-researched, holistic tool that enables organizations to gauge employees’ beliefs about their manager’s effectiveness on multiple dimensions. The tool is based on GMI’s proprietary Connect-Develop-Inspire™ (CDI) Framework. The framework determines how well managers connect with their team members by showing respect and care towards them, by actively listening to their concerns, and by setting the right expectations at the beginning and guiding them throughout to fulfill the same. At the same time, it explains how managers develop their team members by involving them in decision-making processes and by providing constructive feedback in a timely manner. It also talks about how managers inspire their team members by influencing them in the right manner and by being a great role model who takes pride in celebrating team success.

The survey can be administered online and consists of 25 statements designed to cover the various aspects of the CDI framework. The survey results in a ‘People Manager Effectiveness Score’ which throws ample insights around key managerial skills and notable opportunities for improvement. Post-completion, organizations receive a report that paints a detailed picture of key managerial strengths and areas of improvement. The survey motivates an employee to demonstrate the requisite behaviors so that they can be recognized as a “Great Manager to Work With™.” Additionally, our survey offers your manager internal and external benchmarks, enabling a clear comparison of their management skills against their peers.

How this fits seamlessly into your organization?

How this fits seamlessly into your organization

What data do you get from our People Manager Effectiveness Survey?

What data do you get from our People Manager Effectiveness Survey?

How are we different from an assessment centre?

How are we different from an assessment centre?

Great Manager Institute® offers a unique assessment approach for practicing people managers by centering its evaluation on stakeholder feedback, including insights from team members.

Our assessment tool evaluates feedback through a reliability score, analyzing response patterns to determine whether feedback has been given with proper application of mind. Additionally, each manager receives a validity index on their scorecard, indicating the report’s credibility. This effectively eliminates biases, ensuring a fair and accurate reflection of a manager’s capabilities.

The assessment is tailored to behaviors exhibited within the manager’s current company ecosystem, making the insights gained significantly more relevant and actionable.

Our assessment tool provides you with the ability to add your customized competencies/values to our comprehensive Connect-Develop-Inspire™ framework, to create a People Manager Effectiveness Score.

Benchmarks are more relatable as there are internal and external benchmarks available.

The development journey is intricately linked with assessment scores, allowing for a seamless integration of evaluation and growth.

This holistic approach not only provides a clearer picture of a manager’s current performance but also paves the way for targeted development strategies, setting it apart from conventional assessment practices.

How is doing the 9-box with us different from doing it internally?

How is doing the 9-box with us different from doing it internally?

Internal 9-box surveys generally focus only on the performance (KPI/KRA scores) of the employees and the manager’s perception of the potential of the employee. This makes it a little subjective in nature. Our robust methodology places your employees in a 9-box using their performance scores and a people manager effectiveness score that is calculated based on feedback received from peers on various managerial competencies. This makes the evaluation more objective in nature.

What next after the People Manager Effectiveness Survey?

Once you complete the survey and identify which manager falls in which grid of the 9-box, you can identify their areas of improvement and create development journeys focused on those particular areas. You can have targeted development journeys for managers placed in the inverted L as highlighted in the graph. This can be done internally within the organisation or externally as well. Opting to partner with us enriches the process with our specialized development journeys that include personalised nudges based on the manager’s scores and areas of improvement as well as in-person and virtual workshops.

Revolutionizing Leadership: A Synergistic Approach through Neuroscience, AI, and Design Thinking

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In the rapidly evolving business landscape, where time is a precious commodity and tangible outcomes drive sustainable growth, organizations are increasingly focusing on enhancing productivity through process efficiencies and employee performance. This era of hyper-personalization demands that companies not only tailor their customer engagement strategies but also adopt a customized, employee-centric leadership approach.

The role of a manager is critical in ensuring that employees experience this hyper-personalized approach, making leadership and people practices pivotal for organizational success. By integrating cognitive neuroscience, machine learning & artificial intelligence, and design thinking, we can embark on a transformational journey to improve managerial effectiveness.

Cognitive Neuroscience

In today’s challenging economic climate, organizations frequently undertake change management programs to stay afloat. However, with a failure rate of 70%, it’s clear that traditional strategies often fall short. Cognitive neuroscience offers insights into the biological reasons behind this resistance to change. Change is perceived by the brain as a painful experience, akin to physical injury. This is because our brains are wired to follow established patterns to save energy and reduce uncertainty.

The traditional approach to change management, often reliant on incentives or threats, does not address the biological responses to change. A more effective strategy involves helping individuals understand and embrace change voluntarily, recognizing that people respond differently based on their levels of arousal and capacity for focus.

Machine Learning & Artificial Intelligence

As the understanding of neuroscience grows, its applications in artificial intelligence for workforce management and HR planning become more evident. AI enhances the accuracy of targeting the right customers and improving conversion rates through data analytics. Similarly, in leadership development, the authenticity and reliability of feedback and historical data play a crucial role. The challenge lies in personalizing development strategies to meet individual needs reliably.

Design Thinking

The redirection of organizational energy toward positive outcomes is essential. Leaders should focus on fostering a sense of purpose and co-creation to motivate and engage teams. By integrating data analytics from ML & AI with decision science, we can achieve a balance of empathy and efficiency. Design thinking ensures that projects not only meet business objectives but also align with user needs and sensibilities.

Introducing Great Manager Institute®: A Unified Value Proposition

Great Manager Institute® (GMI) represents a pioneering value proposition that interweaves cognitive neuroscience, ML & AI, and design thinking in the realm of people development. This approach promises to revolutionize leadership by providing a framework for understanding and leveraging the unique dynamics of human behavior, technological potential, and innovative problem-solving strategies.

Through GMI, we aim to create a seamless integration of these disciplines, ensuring that leadership development is not only personalized but also deeply rooted in an understanding of human cognition, enhanced by the precision of artificial intelligence, and guided by the principles of design thinking. This holistic approach paves the way for cultivating leaders who are equipped to navigate the complexities of the modern business environment, driving their teams toward excellence with empathy, insight, and innovation.

Biocon Biologics – A Case Study on Leadership Excellence Through the “Great Manager Program”

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The Backstory

Imagine Biocon Biologics, a big player in the biopharma world, facing a bit of a puzzle. They’ve got this talented team of 76 managers overseeing a whopping 666 team members, and they’re thinking, “How do we make our management even better?” They wanted their managers to not just manage but to genuinely lead by nurturing talent, driving performance, and ensuring everyone feels valued and included. It’s like aiming to turn a good recipe into a great one by tweaking a few ingredients.

The Game Plan

So, they rolled out the “Great Manager Program.” Think of it as a masterclass designed specifically for their managers, focusing on making the workplace even more inclusive, supportive, and dynamic. They dug into their performance scores, identified areas for growth, and set up workshops that were as engaging as they were enlightening, covering everything from leadership to diversity. It wasn’t just about reading slides; it was about sparking real change.

The Transformation

BBL Case Study Graph

And guess what? It worked wonders. Team retention rates went up by 20% among those managed by the program’s graduates. Attrition rates dropped, and the vibe at work started shifting. Managers became more open and collaborative, and teams felt more engaged. It’s like when a sports team finds its rhythm and starts winning games they used to lose. Plus, the business side of things saw a boost too, with customer satisfaction on the rise.

Hearing It from the Ground

The feedback was heartening. Managers shared stories of how the program gave them new tools and perspectives to lead their teams more effectively. Team members felt more supported and valued, noting the positive changes in their work environment. It’s like getting rave reviews for a show you’ve put your heart and soul into.

Wrapping It Up

In essence, Biocon Biologics’ “Great Manager Program” showed how investing in leadership development can truly transform an organization. It wasn’t just about teaching managers to manage better; it was about inspiring them to lead with empathy, vision, and effectiveness. For other companies looking to make similar strides, the message is clear: focusing on your leaders can have a ripple effect, uplifting your entire organization.

So, there you have it—the journey of Biocon Biologics towards creating an even more inspiring place to work, proving that with the right focus and resources, leadership can indeed be the tide that lifts all boats.

The BFSI Story: The Team That Stays Together, Grows Together

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How Managers Can Help Build Core Teams, Check Attrition

A team that stays together, grows together. A team that stays together, and is also led by a visionary manager, propels an organisation to newer heights — year after year. This is one lesson that the BFSI sector in India, perhaps, needs to internalise.

Leading private Indian banks have attrition rates of more than 30%

The BFSI space in India may be oozing confidence, but it’s also true that the sector is saddled with a huge problem (some would call it an existential problem, especially at entry levels). The attrition rate in private banks today is unusually high, with leading private banks reporting a turnover of over 30 per cent in FY23. The figure shoots up further to over 40 per cent at entry and junior levels. With around 35 per cent of attrition rate, frontline sales employee turnover rate in many private banks hovers around over the 55 per cent mark.

Industry experts say that many frontline roles, including housing loan sales and credit card sales, face particularly worrying rates of employee turnover.

It’s argued that employees, especially the younger lot, find “mushrooming opportunities” in NBFCs and the fintech sector “too attractive to resist”, and hence switch organisations frequently. New technologies, digitisation, competing salaries offered by other industries, and Gen Next aspirations are among other oft-quoted reasons for the unusually high attrition rates in private banks at junior levels. Industry experts also point to “lack of on-job training” and “poaching” as contributory factors.

But, this larger trend doesn’t augur well for the health of private banks and the BFSI space at all.

The phenomenon has caught the attention of no less than the RBI Governor himself. At a recent event, Governor Shaktikanta Das expressed concern over high attrition rates in private banks. He said there was a need to create and nurture “core teams” to address the problem. While the Governor was definitely concerned over high attrition rates in certain private banks, he stressed that the RBI had not suggested any measures to check the trend. Instead, the Governor added, it was up to the banks to deliberate upon the trend and create “core teams”, that would go on to create robust organisations reflecting healthier organisational cultures.

Training managers to build core teams

With a good Manager, a good team is created. Together they help build a great organisation. Instead of being guided more by short-term imperatives, such organisations then think long-term. There are many ways in which managers can create “core teams” and then nurture them towards long-term organisational goals. The ones who successfully steer such teams come to be regarded as “Effective People Managers” who go on to build iconic organisations.

Research conducted by the Great Manager Institute® highlighted several managerial characteristics that contribute to employee retention within an organization, particularly when managers exhibit these traits. The top five traits impacting organisational retention scores identified in the study were: “being respectful” at 13.5%; “expectation setting” at 11%; “inter-team collaboration” at 9.9%; “involvement in decisions” at 9% and “information sharing” at 7.9%.

Building core teams in BFSI graph

These also constitute the basic traits of “Effective Managers”. Managers with characteristics identified above can go a long way in creating, retaining and nurturing “core teams” – something that will help private banks and the larger BFSI sector to aspire for big goals and grow consistently.

The role of managers in building core teams for India's BFSI Sector

Maybe, then, it’s time the Manager stepped up his or her game. Maybe it’s time the banks asked the Managers to think long-term and work towards developing long-term in-house resources. Maybe it’s time Managers stressed building “core teams”.

A team that stays together, and is led by a hands-on Manager, leads to a purposeful organisation. Trust and stability, growth and prosperity, become buzzwords in such orgnaisations. Maybe the Managers at India’s leading private banks need to get back to drawing boards and work on blueprints where team building is top priority.

Many experts in organisational behavior and HR consultants who followed the unusually high attrition rates during the “The Great Resignation” in the wake of the Covid-19 pandemic came up with useful insights — which are relevant for India’s BFSI sector in the current context as well.

A 2021 Harvard Business Review paper by Ron Carucci “To retain employees, give them a sense of purpose and community” cited a McKinsey research report and said that the top two reasons why employees tend to leave were: 1) “they feel their work is not valued enough by the organisation (54 per cent)”; 2) “they lack a sense of belonging at work (51 per cent)”.

Carucci then advocated for “enhancing solidarity through ownership of policy”, and said that “instead of making career and professional development a separate experience,” there was a need to “build learning and advancement right into people’s roles”.

These policy prescriptions are, perhaps, relevant to India’s BFSI sector, too. Here, the Manager is uniquely placed to usher change, with building “core teams” as the first and most important starting point.

Managers must groom young teams into long term valuable resources

A June 2023 paper by Anand Chopra-McGowan in the Harvard Business Review talked about “5 ways companies are addressing skills gaps in their workforce”. The paper’s takeaways are significant for India’s BFSI Sector, too.

The paper talks about “the new digital apprenticeship”, “a fresh approach to tuition reimbursement”, “a shift to learning experience platforms”, “the democratisation of coaching”, and the rise of “cohort-based courses” as the new approaches to the companies are adopting to constantly upskill their workforce.

The learning and takeaway for the Indian BFSI sector? Traineeship or apprenticeship may be a great way to initiate a young talent into the organisation. It’s for the manager then to groom – and retain – the young team into a long-term valuable resource, over a period of time.

The Harvard paper talks about the “Learning Management Systems” being replaced by “Learning Experience Platforms”. Maybe, the BFSI managers can also toy with “experiential learning systems” for team members.

Good news - The average BFSI manager in India is rated highly by peers and team members.

To address the systemic ills being faced by the BFSI sector, and to build “core teams” as a long-term response to set things right, the community of managers in the BFSI sector will, thus, be keenly watched. What is reassuring, however, is that the average BFSI manager in India is rated highly by peers and team members. He or she has only to shift gears now. A survey carried out by the Great Managers Institute® found out that “56 per cent of the managers (in the sector) were perceived to be competent,” and that only “12.98 per cent of the managers were found to be inconsistent in 10 or more than 10 out of the total 21 behavioural traits studied”

BFSI Skill Gaps - Manager Strengths

The BFSI sector in India is today valued at over Rs 81 trillion. And, India is among the fastest growing fin-tech markets. If India has to keep up the momentum, private sector banks will have to lead from the front. The reset exercise, however, must necessarily begin with the Manager. It’s the Manager who will help build a “core team”. Together, they will help build a robust, stable organisation. Many such organisations, together, will help India’s BFSI sector live up to its true potential.

BFSIs biggest hurdle – Addressing the skill crisis of the sector

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India is among the fastest growing fin-tech markets in the world today. This is one of many indicators often cited to point to “a robust BFSI sector in the country”. It is also argued, to cite another oft-quoted example, that “the banks are not saddled with stressed balance-sheets any longer”. The buzzing BFSI sector in India is today valued at over Rs 81 trillion.

Does that mean that all is well with the BFSI sector in the country?

Does a “golden future” really await the sector?

Experts would, perhaps, call for a caveat or two. They would argue, for instance, how private sector banks have a high attrition rate, especially at junior levels. To cite another example, the need for newer skills – and the need for their continuous upgradation – poses a constant challenge for managers and CEOs alike.

So, if India’s BFSI sector has to script a “golden future,” (the fin-tech industry should grow to $ 1 trillion by 2030, according to one estimate), its managers must lead from the front, they must lead by example, they must also be adept at “de-learning’ and “re-learning” — especially in the age of AI and disruptive technologies.

For the economy to grow at a healthy pace, corporates and businesses have a key role to play. To enable corporates to perform at their optimal, the managers must perform outstandingly (and consistently). Whether it’s about retaining teams or achieving targets, helping teams ace new skills, or the ability to stay ahead of the competition, promoters and employees alike look up to the managers. The Great Indian Manager, thus, must rise to the occasion.

Revamping Skills for the AI and Industry 4.0 Era

In the age of Industry 4.0, disruptive technologies, and AI, the skillsets undergo quick overhauls and upgrades.

The managers should always be on their toes and should have the ability to think on their feet. This is particularly true for India’s BFSI sector.

The sector needs its personnel to be masters in technology, regulatory expertise, risk management, financial expertise, and analytical skills — in addition to communications and interpersonal skills. A couple of years ago, a report made the case for the evolving skill sets and skilled employees in the BFSI sector.

The report, “Insight on BFSI sector: Skill gap report and in-demand job roles in BFSI sector” by the BFSI Sector Skill Council of India, outlined how the BFSI skill sets had changed or evolved in the age of AI, Blockchain, and disruptive technologies.

For “Banking,” the report argued that communications and interpersonal skills, people management skills, knowledge of products and benefits, financial modeling, tech know-how, and regulatory/legal knowledge would be much in demand.

For insurance, in addition to the soft skills, financial acumen, data structures and algorithms, problem-solving skills, and domain expertise would be valued, said the report. For fin-tech, apart from soft skills (common to all BFSI verticals), and domain expertise, quantitative skills, financial and accounting skills, and problem-solving skills would be prized, added the report.

The skill sets will continue to evolve for all times to come. If the sector has to far exceed the 7.74 percent rate of growth witnessed between 2012 and 2020, the managers will have to play a pivotal role — especially in helping colleagues keep pace with the evolving skillsets.

This is, however, easier said than done. It may not be easy, for instance, to allow many employees for “regular sabbaticals” for the upgradation of their skills. Online courses, on the other hand, may only have a limited role.

Behavioral traits of a great manager in the BFSI industry

A study by the Great Manager Institute® on how different managerial behaviours are rated, and how such behaviours help a manager become an “effective people manager”, offers important insights.

Among 18 common behavioural traits identified in the survey, the top five are — “being respectful”, “inter-team collaboration”, “expectation setting”, “care for individual” and the “tendency to involve colleagues in decision making”. Managers who exhibit these traits in abundance are considered “effective people managers” by team members and peers.

Leadership development and managerial capability development initiatives conducted by companies in the BFSI industry should focus more on the top 5 behavioral traits to enable their managers to become more effective.

Skill Gaps BFSI Managers Graph

Managers must groom young teams into long term valuable resources

A June 2023 paper by Anand Chopra-McGowan in the Harvard Business Review talked about “5 ways companies are addressing skills gaps in their workforce”. The paper’s takeaways are significant for India’s BFSI Sector, too.

The paper talks about “the new digital apprenticeship”, “a fresh approach to tuition reimbursement”, “a shift to learning experience platforms”, “the democratisation of coaching”, and the rise of “cohort-based courses” as the new approaches to the companies are adopting to constantly upskill their workforce.

The learning and takeaway for the Indian BFSI sector? Traineeship or apprenticeship may be a great way to initiate a young talent into the organisation. It’s for the manager then to groom – and retain – the young team into a long-term valuable resource, over a period of time.

The Harvard paper talks about the “Learning Management Systems” being replaced by “Learning Experience Platforms”. Maybe, the BFSI managers can also toy with “experiential learning systems” for team members.

Undoubtedly, it’s the great people managers who will help India’s BFSI sector bridge the talent gap.

When they work in tandem with L&D teams, a mechanism to study, survey, and identify the skill-sets needed, and expected to be required in the future, can become an integral part of the organisation’s culture. An agile organisation always tries to be ahead of time.

The Indian BFSI sector has come a long way in the last decade or so. Consider for instance how digital payments have revolutionised the sector. Consider, to cite another example, how India, today, has the world’s fourth-largest bank.

The task for the Indian BFSI managers, however, should not overwhelm them. To be sure, most of the managers of the sector are perceived to be competent and rated highly by peers. In a study by the Great Manager Institute® only “12.98 percent of the managers were found to be inconsistent in 10 or more than 10 of the total 21 behavioural traits studies”, while “56 percent of the managers were perceived to be competent”.

Tech and IT leaders never talk “long-term” For, the pace at which technology is evolving is mind-boggling. Consider for instance the impact that AI has had on economies and businesses.

For a tech-driven sector like BFSI, then, to project future projections is not without risks. It’s precisely for this reason why the manager’s role will become all the more important in steering change, in ensuring stability, and in delivering results. The Indian BFSI sector is destined to register impressive growth. The new skill-sets will be key to the future targets. It’s the Great Indian Manager who will ensure that whether it’s reskilling or upgrading, de-learning or relearning, the BFSI sector lives up to its inherent potential.

Success Story – SMFG India Credit Company Limited

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The Challenge

In the dynamic financial landscape of India, retaining top-tier talent within the ranks of management has become a formidable challenge. During such uncertain times, a large NBFC company confronted a critical issue: attrition within its middle management was on the rise, diluting institutional knowledge and affecting the morale of the workforce. The company recognized that to sustain its competitive edge, it needed to bolster its leadership capabilities and create a nurturing environment that emphasized employee care and development.

Our Approach

The company partnered with us at Great Manager Institute® to tackle this issue. Together, we created a multifaceted strategy to develop a leadership development journey that delved into the underlying factors contributing to attrition and to develop a robust framework to enhance leadership skills across the board.

  1. Need Gap Analysis: The initiative began with a need-gap analysis, utilizing tools such as appreciative inquiries, immersion sessions, and 360-degree surveys to gain a deep understanding of the managers’ needs.
  2. Involving the Leadership Team: Ensuring that the leaders at the top were not just instructing but also participating. The top team engaged as coaches and mentors, fostering a culture of shared growth.
  3. Skill Building Workshops: These workshops were rolled out, with the end goal of equipping managers with the necessary tools and approaches for effective leadership.
  4. Rituals and Nudges: Managers were introduced to practical rituals aimed at strengthening different managerial capabilities
  5. Check-in sessions – Structured check-in sessions to ensure the rituals were being implemented in a timely manner.
  6. E-Learning Modules: Online content focusing on the ‘How’ of people management was assigned to the managers, based on their profile.
  7. Behavioral Change: The final component of the approach was an assessment of behavioral changes in managers and the subsequent impact on business operations.

Way Forward

Way Forward - Success Story of BFSI

Building on this success, the company has charted a strategic path forward:

  • Culture Change: The next set of managers from the same band will undergo the development journey, ensuring that the culture change permeates throughout the organization.
  • Sustenance and Consistency: For those managers who have been certified, a sustenance journey will be crafted to maintain consistency in leadership practices.
  • Leadership Alignment: A crucial step will be the alignment of the entire leadership team to the practices established in the development journey, creating a unified front in management.

In conclusion, the company has not only addressed its immediate challenge of controlling attrition but has also laid down a sustainable blueprint for nurturing and retaining leadership talent. Their partnership with Great Manager Institute® stands as a testament to the company’s commitment to its employees and its unyielding pursuit of excellence in leadership development.

No Rule Rules!

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No rule, rules! Is it a modern-day work expectation?

Imagine a workplace where there are no rules and no set boundaries; you can come to work at any time, can take as many leaves as you want, no
permission to be taken for any travel and you don’t have to follow any mundane policies. The only condition is to perform and deliver what is required!

In line with this, Netflix’s HR approach came into the spotlight which primarily focuses on the aspects such as ‘freedom’ and ‘responsibility’ while letting go of the many mundane rules. At Netflix, Reed Hastings (co-founder, Netflix) set new standards which value people over processes, emphasize innovation over efficiency, and giving employees context, not controls. No rule, rules is the intriguing yet interesting philosophy behind one of the world’s most innovative, imaginative, and successful organizations today. Google, is another example of a highly successful organization that stresses on employee freedom to make them happier and make them stay for long.

How would you perceive such workplace to be? Would you aspire to build such workplace with ‘no rules’ or you would want at least some rules to guide your employees to tread on the right direction? What are some of the modern-day expectations of the employees from their workplace? Let’s reflect on this by considering some variables which may influence these questions. However, before that let’s understand the psychology behind No Rule Rules!

Psychology behind No Rule Rules

Human beings have certain universal psychological needs: to have autonomy and to exercise self-control are important ones to attain personal growth. Self-determination theory refers to person’s ability to make choices and manage their own life. Being self-determined means that you have greater control over things, and your life is not governed by others. However, each of these needs is frequently thwarted by traditional command-and-control managerial styles and rule-heavy, deeply monitored workplaces. Employees don’t feel enthused and motivated to try out new things and work with strict rules. They feel scared to commit mistakes and feel throttled by constant monitoring and guidelines. Therefore, it is important to create a liberating environment that nurtures these psychological needs, rather than stifling them. Such liberated workplaces boast of high level of engagement and intrinsic motivation among employees.

These psychological needs and employees’ work expectations are often shaped by various external as well as internal factors. Let’s take a quick look at these factors:

Factors Shaping Employees’ Expectations

  1. Demographic diversity: Shifting demographics, including an aging workforce and the rise of younger generations entering the workforce, contribute to changes in workplace expectations, needs, and work-life balance. It is estimated that by 2030, India will be home to 1 billion working-age adults which will mostly comprise of Millennials and Gen Z. As of 2021, India’s share of Millennials and Gen Z stood at 52%, much higher than the global average of 47%. Gen Z is one of the main drivers of change in today’s workplace. Defined as the generation of individuals born between 1997 and 2012 (who in 2023 are between the ages of 10 and 25 years), are growing up with smartphones and social media, are more vocal about their needs and knows ways to fulfil those needs. Radically different than Millennials, this generation has an entirely unique perspective on careers and life. They are setting new trends and emerging as influencers. Managing their expectations would be a challenging task going forward.
    Furthermore, Labor Force Participation Rate (LFPR) for females is also expected to grow. Nearly 49% of the total enrolment in higher education comprised of female students. With this rising trend, India should expect a much larger proportion of women’s participation in the workforce in the years to come. Apart from that, we also see a rise in the population of LGBTQ in the workplace and successfully managing this demographic diversity would be a priority for employers in the years to come.
  1. Technological Advancements: Rapid advancements in technology, such as artificial intelligence, automation, and digital platforms, continue to reshape the nature of work and expectations. These technologies will impact job roles, skills requirements, and the overall work environment. 
  2. 3. Economic and regulatory environment: Economic trends, such as recessions or periods of growth, can impact job availability, compensation levels, and the overall stability of the job market. Similarly, changes in labor laws, workplace regulations, and government policies impact how employers structure work and related policies. Furthermore, any major event might bring a major shift in work expectations, like, the pandemic totally changed people’s perspectives towards work, life and mental health. 
  3. Organizational Culture and leadership styles: The culture within an organization, including its values, norms, and leadership style, determine employee expectations. An open culture would let employees to be more vocal, transparent and innovative while closed culture will restrict employees’ expressions. 
  4. Organizational Structure and policies: The structure of an organization, whether hierarchical or lean, influences expectations regarding reporting relationships, autonomy, growth and career paths. Company policies on issues such as work hours, remote work, and benefits contribute to shaping expectations about work arrangements.

Having looked at these factors, let’s take a quick look at what are some of the modern day expectations of the employees.

Modern-day Expectations from the Workplace

  1. Increased emphasis on Flexibility and Work-life balance: The pandemic era has been an eye opener for many and it is observed that people have become more aware of what they want from their work and life. They want to prioritize their health and time with family and value flexibility in terms of work hours and locations. Remote/hybrid work options and flexible schedules are commonplace now and employees want to work with organizations which offer these options to its employees. Also, with more women (working mothers) joining work, better crèche facility would be desirable. We have already seen phenomenal changes with respect to maternity and in some cases paternity leaves.

    Similarly, with employees spending extended time in the office, they expect additional recreational facilities like cafeteria, some indoor sports room, fitness facilities organized by the organization. Such expectations will continue to rule the workplace in the years to come. 
  2. Respecting Inclusivity and Diversity: Employees would want to work with organizations which respect and promote Diversity and Inclusivity and value employees from different demographics, experiences, and perspectives. As discussed before, it is important to acknowledge the needs and outlook of different generation at the workplace. To facilitate this practice, it is important to connect with employees and roll out surveys to collect their opinions and suggestions and bring desired changes based on such surveys. 
  3. Seeking Purpose and Meaning: Employees today desire work that aligns with personal values and contributes to a larger purpose.  Employees often seek meaning in their work which at times go beyond financial compensation. They seek opportunities for skill enhancement, training, and career growth within the organization. When such demands are not met, employees do not hesitate to quit their work. 
  4. Health and well-being: There has been a growing focus on employee well-being, including mental health support, wellness programs, and initiatives that promote a healthy work environment. Employees today give utmost importance to their health and don’t want to be bound by any rule which puts a threat to their health and well-being.

What are the expectations from a manager?

Managerial effectiveness is one of the most important factors determining  employee engagement and retention in the organization. Employees invariably look up to their managers and carry certain expectations from them.

As per our research, 67% of manager attrition and retention is induced by managers!

Manager Induced Attrition and Retention

Here are 6 expectations team members have from their managers in the modern-day workplace

  • They want their managers to do away with their authoritarian approach and rather become more collaborative and participative, sharing their ideas and also seeking insights from others. 
  • Employees expect managers to not micromanage everything and rather provide them the sense of autonomy and ‘creative liberty’ to come up with innovative ideas and solutions.  
  • As people are becoming more aware of their mental health and well-being, they want to work with managers who are empathetic and emotionally intelligent and treat employees with respect. Working with a short-tempered boss can be a challenging and stressful experience which employees want to avoid at all costs. No wonders, bad managers are number 1 reason why employees quit their organization!
  • Employees expect managers to communicate clearly and transparently. This includes providing information about organizational goals and vision, expectations for individual performance, and how to go about it.
  • Employees expect and appreciate constructive feedback that helps them understand their strengths and areas for improvement. Recognition for achievements and contributions is valued.
  • Employees expect to understand their career paths within the organization. Managers are expected to provide guidance on potential career trajectories and offer fair and equal opportunities for advancement and skill development.

As the workplace is evolving and shifting from being traditional to modern; managers need to step up and become more effective. Our research on managerial effectiveness, which comprised responses from over 30000 employees reveals that managers who demonstrate behaviors such as recognizing their team’s contribution, being open to new ideas, guiding them, and treating them with respect are considered effective people managers. They are great at communicating job expectations and care for their employees.

Behaviours of effective people managers

Rules or ‘no rules’ debate will keep on happening but it is important to note that while some people thrive in less structured environments, others may prefer clear guidelines and structure. Overly-rigid workplaces with authoritative managers may result in employees’ getting disenchanted with their organization and eventually look for work elsewhere while more freedom may compromise performance standards. The need is to create a balance. The ideal balance however, depends on the nature of the work, the industry, and the leaders involved. For example, organizations high on creativity and innovation would be relatively less bound by rules whereas organizations in finance and security would certainly need rules and heavy monitoring. Employers may take a middle path and adapt their policies and practices to meet the evolving needs and expectations of their workforce.

Managers and the AI Challenge

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We need to dig beyond the simplistic stereotype of people terrified that AI will ‘steal their jobs’, and seek a nuanced understanding of the psychological impact of AI in the workplace. 

Twelve years ago, Silicon Valley venture capitalist Marc Andreessen coined a slogan that would reverberate at buzzy events where industry insiders gathered to gush at the exciting future of technology:

“Software is eating the world.”

Andreessen was referring to the rise of newfangled internet companies like Facebook, Twitter, and Amazon. While some were worried that this was just another bubble (a la Webvan and pets.com), Andreessen held that “we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.”

Well. If the birth of a bunch of platforms that let you post photos of your lunch, rant about your bank’s bad customer service, or order T-shirts online was proof that software was eating the world, then the current bedlam — this time around artificial intelligence — would suggest that the world as of today is buried deep in software’s bowels.

As you read this, entire industries, cultures, and ways of life are in the process of being digested by AI engines hungry for data. The outcome of this metabolism will be every bit as “dramatic” and “broad” as the internet revolution of the previous generation — except on steroids.

How this moment makes you feel in your gut depends on whether you believe that AI is an evil force that will destroy humanity and render us all jobless, or, like Andreessen, you are a votary of the “techno-capital machine, the engine of perpetual material creation, growth, and abundance.” But even as we participate in such philosophical wrangling on the civilizational influence of AI, we must also make it our priority to ask other, more urgent, more grounded questions.

Questions such as: What are the people in the trenches thinking about the ongoing onslaught of AI, and how are they responding to it, in the here and now, in the real world and in real time?

I am talking about the average manager (or any employee, really) listening to their CEO’s grand vision of business in the age of AI and trying to decode what it means for them. Work is one of the most emotive elements shaping our identity. The unprecedented chaos, confusion, and uncertainty wrought by the rise of AI means that it is vital to make sense of the psychological landscape it is creating in its trail: What is all this hype and frenzy doing to organisations’ cadres? What are their greatest hopes and anxieties around AI? How is the prevalent discourse affecting their belief in technology, their relationship with work, and their self-perception as professionals, and how might this influence organisational policies? Are we asking these questions as much as we should?

Short answer: No. And that’s a problem.

A brief history of disruption

Like with every big technological wave before it, AI is profoundly changing what it means to be a (productive) human. 

Dr Rishikesha Krishnan, director at IIM Bangalore and Ram Charan Chair in Innovation and Leadership at the institute, points out that the dominant thread in the zeitgeist today “goes back a few hundred years, and that is the thread around productivity improvement. Think back to the industrial revolution, which is when the focus on improving human productivity started with the invention of machines, such as in the cotton textile industry and so on. Then came the steam and electricity revolutions. Fast forward to the 20th century, and you enter the age of software. AI is the latest manifestation of this story, which promises three core benefits: improving efficiency, boosting productivity, and reducing cost.”

At the heart of each of these gains is one of AI’s pivotal, foundational promises: helping leaders make better decisions.

Research led by Dr Guangming Cao, head of the Digital Transformation Research Center at Ajman University in the UAE, lays out that the history of AI in decision-making can be divided into two broad phases. The first phase began in the mid-to late 1970s, peaking at the start of the 1990s, when “expert systems”, specifically proposed for decision-making, were intended to replicate the performance of a skilled human decision maker. One of the earliest examples of this was MYCIN, an expert system developed at Stanford University which diagnosed blood infections and recommended appropriate medical treatment.

We are now in the middle of the second phase, which began around the turn of the millennium. AI use in decision-making was intermittent during the 2000s, Cao et al point out, but in the past decade its playing field has expanded rapidly, thanks to research on deep learning systems.

What is deep learning?

Deep learning is a subset of machine learning, which is essentially a neural network with three or more layers. These neural networks attempt to simulate the behaviour of the human brain — albeit far from matching its ability — allowing it to ‘learn’ from large amounts of data. Deep learning drives many everyday products and services (such as digital assistants, voice-enabled TV remotes, and credit card fraud detection) as well as emerging technologies (such as self-driving cars).

Source: IBM

Unpacking managers’ attitudes towards AI

Across this dynamic history spanning half a century, there has been little effort to understand managers’ attitudes towards AI. While there’s increasing conversation on the technical accuracy, potential value, and data availability with respect to AI, we don’t know enough about the mental makeup of the human actors who are supposed to use this powerful tool.

There is very limited empirical research focusing on understanding managers’ attitudes and behavioural intentions towards using AI from a human-centred perspective, Cao et al write. We lack clarity on if and when people are willing to cooperate with machines, although conditions favouring IT acceptance have long been seen as a central pillar in research into IT innovations.

The researchers point at the obvious reason this is perilous: The potential benefit of human-AI symbiosis in organisational decision-making can only be fully realised if human decision makers accept the use of AI. 

You could argue that AI is an unstoppable force, and ultimately everyone will have to make peace with whatever it brings. But in the ideal world, no organisation should have their people fall in line kicking and screaming (an area where far too many businesses have an inglorious track record). To avoid causing mass distress and creating pandemonium, it is essential to closely understand people’s mindsets and design compassionate, human-centred interventions.

The “AI will steal jobs” narrative

In the absence of granular insights, the media and popular culture have remained saturated with the same old stereotype: of people terrified that AI will ‘steal their jobs’.

This is a valid concern, of course. “Work will get reorganised, and roles will change,” says Dr Krishnan. “It is reasonable to expect that at least in the short run, the number of jobs will go down, including certain kinds of managerial jobs.” Some comfort comes from the prediction that new jobs will also get created, but the dominant narrative is one of fear.

However, this is a simplistic and one-dimensional reading. It prevents us from getting a nuanced picture of sentiments on the ground. In fact, it could be leading us astray by glossing over crucial contradictions.

In June 2023, BCG published results from one of the few comprehensive surveys of workplace attitudes towards AI. It reached 13,000 people, from executive suite leaders to middle managers and frontline employees, in 18 countries to understand their thoughts, emotions, and fears about AI.

The big revelation? Fifty-two percent of respondents were optimistic rather than concerned about AI, a significant bump up from 35% last year.

Time to throw caution to the winds? Not so fast.

The same survey discovered that leaders were much more optimistic about AI than frontline employees (62% vs. 42%). Also, regular users of generative AI (ChatGPT being the most common example) were a lot more bullish than nonusers (62% vs. 36%).

Let’s zoom in a little. The dissonance between managers’ and frontline employees’ attitude to major work trends isn’t new. Most recently, we have seen it play out in the work from home debate, with bosses being gung-ho about the return to office and issuing unilateral diktats to this effect, and employees feeling understandably bitter and let down. What can this ‘optimism gap’ teach managers about AI adoption at scale? Will it push them to be more collaborative in policy decisions to minimise friction?

In their paper, Cao et al hint at a deeper reason to be conservative about managers’ apparent optimism. Citing research led by Professor Aaron C Elkins, an expert on management information systems, they argue that this optimism may be punctured when human experts feel threatened by AI systems that contradict their own judgements:

“When asked about new technologies, experts in deception detection are very enthusiastic and interested in new tools and technology. However, when confronted with the actual technology, they reject its use and ignore it all together.”

The second data point from the BCG survey, on the difference in optimism between users and nonusers, raises other critical questions — such as who has the privilege to get ‘regular’ access to generative AI tools in the first place, and who doesn’t? What socioeconomic factors determine this access? And what role do leaders have in mitigating this gap and creating more egalitarian access?

If we don’t engage with these questions, we run the risk of perpetuating the digital divide we saw in earlier eras that kept out historically marginalised groups, this time with potentially more damaging implications.

Responsible use of AI — the big, understated worry?

Even as mainstream narratives make it seem that workers are only preoccupied with the impact of AI on their livelihoods, the BCG survey indicates that they care about something bigger: responsible and ethical use of AI.

While 71% of respondents believe that the rewards of generative AI outweigh the risks, 79% support AI regulation.

“This represents a marked shift in attitude toward government oversight of technology,” BCG says. “During the early days of the Internet, a laissez-faire, light-touch ethos prevailed. Today, employees are more willing to acknowledge that government can play a constructive role in overseeing a relatively new commercial technology.” (Whether governments will do their job well is another story.)

Many companies claim that they are taking AI safety seriously. But once again, not everyone within organisations is buying it: Among leaders, 68% believe that their organisation has an adequate responsible AI program in place. The figure among frontline employees is a measly 29%, underscoring an alarming trust gap.

Conversations on AI in the workplace will remain shallow and misleading as long as we don’t ask questions about these fundamental issues, how leaders are responding to them, and how those responses are shaping the future of this wondrous “techno-capital machine”.

Using AI for decision making: Three elements to remember

  1. Human centred approach: Humans and AI form a unique partnership and cannot be treated as separate entities in order to make the partnership work. Human perceptions, concerns, and attitudes must be front and centre in policy design.
  2. Inclusion of both technology acceptance and avoidance factors: As using AI for organisational decision-making has the potential to create both positive and negative impacts, that could influence managers’ attitudes and behavioural intentions to either accept or avoid using AI.
  3. Factors related to personal concerns: Using AI for organisational decision-making may raise serious concerns among managers about their personal development and well-being, which could significantly influence their attitudes and behavioural intentions towards using AI. Thus, any policy must factor in personal well-being and development concerns as well.

Source: Guangming Cao, Yanqing Duan, John S. Edwards, Yogesh K. Dwivedi; ‘Understanding managers’ attitudes and behavioral intentions towards using artificial intelligence for organizational decision-making’; Technovation, Volume 106, 2021*

*This paper proposes the three elements above in the context of academic research, but they could be just as relevant for any workplace.

Why more money will not help you retain talent?

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The you-live-only-once generation counts money as important in their quest for a meaningful career and life. Money alone, however, is not enough to appease the new generation of employees, managers, and founders.

The new-age employee is increasingly seeking a “sense of purpose” in their careers.

Consider the not-yet-25 Zepto founders, for instance. In their interviews, the Zepto founders, often feted as among the wealthiest self-made young Indian entrepreneurs, recount how they dropped out of Stanford when they sensed an opportunity – and a need — to create “something unique for consumers” during the Covid-19 pandemic. Riding on the e-commerce boom, was thus born Zepto.

The pursuit of "something unique," “job satisfaction”, and the quest for “one's true calling” is on the rise.

This generation is marked by impatience, hunger, and a relentless drive to achieve their aspirations.

So, while money is definitely important, it’s not the most important driver in one’s career. The modern-day Manager today has come to realize, perhaps the hard way, that “more money will not help you retain talent”.

Money remains an important factor. It has always been. Today, however, there are other more important factors that make money, perhaps, an “important add-on”. The huge uncertainty and all-round churn triggered by the Covid-19 pandemic made this transition at the workplace all the more pronounced. The phenomenon where many sought to rediscover a sense of purpose and meaning in their career led many to quit, dubbed as the “Great Resignation”. Money, or the lure of lucre alone, will not help retain such driven employees.

So, more money alone then will not help you retain talent, dear new-age manager!

Our research shows that the top five drivers for managers to retain teams are “Career Growth”, “Reliability”, “Guidance”, “Work-Life Balance”, and “Feedback Sharing”.

5 Key Drivers for Employee Retention

It’s important to understand why and how the manager drives employees to stay on (or quit, for that matter).

A great manager ensures that team members find ample room for performance-based growth in the organization. Team members then often look up to the reporting manger as a “reliable reporting manager”. In other words, a great manager fulfills all the commitments, and thus is “highly reliable”. Of course, a great manager must always be a master of his craft, and should be able to chip in, in hours of need. So, a great manager guides team members in ensuring that they perform at their optimal levels. Great managers also share regular, reliable feedback and encourage a work-life balance for the workforce.

It’s the manager who often has a key role in retaining employees.

According to research carried out by us at Great Manager Institute®, Manager-induced retention is as high as 42%. In contrast, an Organization-induced retention is only 14%.

Of course, the manager can also be the reason why employees quit. According to GMI research, 25% of the employees who quit, do so because of the manager, while organization-induced attrition stands at 19%.

Manager Induced Attrition and Retention

Our findings at GMI are corroborated by other studies.

A 2021 McKinsey study, cited, said that “as many as 52% of employees left when they felt shortchanged by their managers” while “54% of employees quit when they didn’t feel valued by their organisations”.

The employee then plans a long-term career with the organisation, and remains aligned with its goals and objectives. It’s the “Great Manager” who develops this process into an organizational culture.

When the employee gets flexibility and freedom to perform, recognition at the workplace, and a sense of purpose, the employee experience and overall engagement become truly fantastic.

Of course, a good manager will have a price. Or, as a 2022 Harvard Business Review paper said, “the ability to extract value.

The paper, titled “The Real Secret to Retaining Talent” noted: “Nothing has matched topflight managers’ ability to extract value: Steve Ballmer made the vast majority of his $ 96 billion fortune by being Bill Gates’s first business manager. Eric Schmidt’s $ 2.4 billion net worth came from taking the reins of Google for a decade. Meg Whitman’s $ 5 billion (came) from serving as eBay’s CEO for 10 years,

A 2022 Harvard Business Review case study based on a case developed at MDI Gurgaon by Jyotsna Bhatnagar and Rakesh Bohra, said: “To keep pace with societal and technological change, companies today need to be flexible with – and offer flexibility to – their workforces.

The McKinsey article mentioned earlier said “If companies make a concerted effort to better understand why employees are leaving and take meaningful action to retain them, the Great Attrition could become the Great Attraction”.

It’s the Manager, then, who will have to step up and act as employees’ friendly stepping stone towards a fulfilling career.

The Manager — that crucial cog in the wheel-like organization — can then well and truly act as a catalyst to retain talent — by being flexible and firm, by being empathetic and farsighted.

So, yes, money is important. However, money is not the most important factor for the employee. And, to reiterate, more money alone will not help retain talent.

The modern-day Great Manager, then, will have to lead from the front, and act as the comrade-philosopher-guide to employees to help them perform at their optimal levels, while helping them lead purposeful careers and meaningful lives.

The message to promoters, founders and CEOs, then? While more money alone will not help you retain employees, a Great Manager will definitely be able to put together, and retain employees, committed towards long-term organizational objectives and values, and driven by excellence and meritocracy.

Your business won’t grow unless your managers do

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Since 2018 nearly all significant talent-related reports highlight the impending talent shortage that businesses face. These reports come from the likes of Korn Ferry, World Economic Forum, ManpowerGroup, Deloitte, McKinsey & Company, PwC, Gartner, Randstad, LinkedIn and Glassdoor. In fact, virtually all of them, based on an overwhelming quantity of employee coverage, predict that obtaining the right individuals will become increasingly harder in the coming years. An aging workforce, mismatch of skills and expectations of the new age workforce, increased reassessment of personal priorities in light of work obligations have all added to the problem.

But this is not limited to a straightforward quantity scarcity arithmetic issue. World Economic Forum 2023 report states that ‘Employers estimate that 44% of workers’ skills will be disrupted in the next five years.’ Therefore, businesses are also staring at a glaring issue of quality. It further states ‘A majority of companies will prioritize women (79%), youth under 25 (68%) and those with disabilities (51%) as part of their DEI programmes. This fundamentally alters the employer-employee dynamic.

Organisations are updating their talent pipeline strategies to find the sweet spot between build, buy, and borrow in order to stay competitive.

To keep pace organisations are reworking their talent pipeline strategy of the sweet spot between Build, Buy and Borrow talent. Acknowledging Build as the best financially and operationally viable approach. However, compared to past times, developing talent internally is now a more difficult task. Upskilling and attrition are widespread issues in practically every business.

What does our research say?

At Great Manager Institute®, our research reveals “the people manager’s” undisputed influence on Attrition, Accountability, Active Betterment and Ambassadorship in organisations. In one of our recent interventions with people managers of a leading Insurance Organisation we observed that when people managers invest in connecting with, developing and inspiring their team members, attrition fell by approximately 19%.

We looked at 4 engagement indicators to evaluate the impact of managerial effectiveness on employee engagement. These are.

  1. Ambassadorship: My manager is highly competent in their work.
  2. Accountability: Team members of My manager hold themselves accountable for their performance.
  3. Active Betterment: My manager guides me to get better at my work.
  4. Attrition: I want to work with this organization for a long time.

As expected, Effective People Managers outperform the others on all parameters. However, in a time when organisations are gearing to build talent from within and employ a more diverse workforce who will be expected to hit the road running, the influence of effective people managers on Active Betterment stands out.

4As

Next, we double-clicked on these elements to determine the significance of managerial seniority.

Ambassadorship: Strongly agree that my manager is highly competent in their work.

Ambassadorship - Strongly agree that my manager is highly competent in their work.

Only 10% of Top management is seen as competent with their team members don’t experience them as effective people managers. This percentage rises to a meagre 20% at the front line managerial levels. This can have various negative impacts on both individual employees and the overall work environment. Incompetent management can have an impact on job happiness, professional development, and overall work experience, all of which influence an employee’s decision to stay or quit. However, the specific percentage can vary across industries, regions, and organizational cultures. Conversely, when managers are viewed as competent, a positive and encouraging environment is fostered, allowing employees to reach their full potential and make valuable contributions to the team’s and the company’s overall success.

Accountability: Team members of My manager hold themselves accountable for their performance.

Accountability - Team members of My manager hold themselves accountable for their performance.

Managers who are seen to be effective people managers are 2X as likely to drive accountability within their team. Driving accountability at work is crucial for business success. Achieving Goals, Problem Resolution, Collaboration, Building Trust, Reducing Conflict, and Driving Continuous Improvement are closely linked with the degree of accountability within teams. Employees are more likely to seek feedback, learn from mistakes, and collaborate with each other to achieve better results. An interesting observation here is that being inconsistently effective as a people manager is not really better than an ineffective people manager when it comes to driving accountability.

Active Betterment: My manager guides me to get better at my work.

Active Betterment - My manager guides me to get better at my work.

Not being able to guide team members to get better extends beyond individual performance to affect team dynamics, organizational culture, and long-term success, especially at leadership levels. While individuals face the consequences of Stagnation of skills and performance levels, and missed opportunities to rise within the organisation. Organisations run the risk of an over reliance on hiring, missed opportunities for innovation, lethargy towards change, stagnation in productivity. Guiding team members and being seen as an effective manager have a cyclical relationship. One positively feeds the other. However, when team members endorse their manager as an effective managers they are more likely to consider and act on the guidance provided by the manager

Attrition: Don't feel positively about working with the organisation for a long time

Attrition - Don't feel positively about working with the organisation for a long time

Employees are five times more likely to desire to leave a company if they believe their people manager is ineffective than if they believe the people manager is effective. At the top the challenge is higher. While employee attrition can be influenced by various factors such as inadequate compensation, lack of career growth, mismatched job roles, inadequate benefits, market opportunities; poor people managers are a growing concern. To us at Great Manager Institute®, there is a visible relationship between retention and managerial style. Managers that make a deeper connection with employees, engage in individual’s development and progress, and motivate via purpose and recognition address elements that cause stress and burnout, a lack of job satisfaction, and hence inspire greater retention.

As organisations race to survive, expand, and grab more markets and consumers, the rules have changed in the middle of the game. Organisations are and will continue to need to race hard to retain talent that can expand, and grab more markets and consumers.

Companies that invest in their human capital deliver more consistent earnings through difficult times, according to a 2023 McKinsey Global Institute report. An investment both emotional and monetary in developing people management style at all levels is no longer optional. It is an indicator of organisations that are truly future ready.