The question every CEO eventually asks
“If I could improve just one thing in my organization, would better management really make that much difference?”
It’s a fair question.
Organizations succeed or fail for many reasons. Markets change, competitors emerge, technology evolves, customer expectations shift, and economic conditions can change almost overnight. Against all of that complexity, it’s reasonable to wonder whether improving management really has a significant impact.
There is no question in my mind that it does. Not because good management eliminates uncertainty. It doesn’t. Good management determines how well an organization responds to uncertainty.
That, in my experience, is where the real return on investment comes from.
Leadership and Management Are Not the Same Thing
Leadership has become a very popular topic in books and articles written about business. We talk about vision, inspiration, culture, purpose, motivation, and engagement. Every one of those subjects is important, and every leader needs to be able to inspire people to do their best work.
But inspiration alone doesn’t build a high-performing organization.
Someone still has to translate that vision into meaningful work. Someone has to establish priorities, create clarity, coach people, monitor progress, and make sure work flows effectively across the organization.
That’s management.
I’ve never believed leadership and management compete with one another. In fact, I think that’s the wrong way to look at them. Every person who is accountable for leading a team needs to be capable of doing both.
Leadership answers the question, “Where are we going?”
Management answers the equally important question, “How are we going to get there?”
The most effective leaders understand that those two responsibilities are inseparable.
The CEO Sets the Standard
One of the unintended consequences of becoming the head of an organization is that it’s very easy to drift toward leadership and away from management.
As organizations grow, CEOs naturally spend more time thinking strategically. They work with customers, boards, investors, government, industry partners, and other external stakeholders. Their role becomes increasingly focused on the future of the organization.
All of that is appropriate. What sometimes gets overlooked is that the CEO is still a manager. The CEO’s team happens to be the executive team.
If the CEO stops having meaningful one-to-one discussions, the executives gradually stop having them with their own teams. If the CEO doesn’t spend time creating context, clarifying accountability, or coaching performance, those practices slowly disappear throughout the organization.
This isn’t because people don’t care. It’s because every organization takes its cues from the behaviour of its leader.
The standards the CEO demonstrates become the standards the organization adopts.
I’ve often said that culture isn’t created by what leaders say. It’s created by what leaders consistently do. The same is true of management.
What My Research Taught Me
Several years ago, while conducting research with the Telfer School of Management at the University of Ottawa, I was looking for a better understanding of what really drives organizational performance.
The research reinforced something that had been growing in my own thinking for many years.
Organizations become effective when accountability is clear. That sounds simple, but it’s remarkably difficult to achieve as organizations become larger and more complex.
Every new role, every new department, every new reporting relationship introduces another opportunity for confusion. Unless accountability is continually clarified and reinforced, uncertainty begins to creep into the organization. Decisions slow down. Collaboration becomes more difficult. People spend more time negotiating responsibilities and less time creating value.
That realization fundamentally changed the way I thought about management.
I came to understand that improving organizational performance wasn’t simply about improving individual leaders. It was about helping every manager become more effective at creating clarity for the people they lead.
That’s one of the reasons my company is called Effective Managers™.
I genuinely believe that organizations improve one manager at a time.
Management Is How Strategy Becomes Reality
Throughout this series we’ve explored a number of different ideas.
We’ve talked about organization design, accountability and authority, delegation, creating context, feedback loops, systems thinking, and strategy execution.
They’re often discussed as separate management topics.
I don’t see them that way. To me, they’re all different expressions of managerial leadership.
Managers create plans that establish direction. They create context so people understand the purpose behind the work. They delegate appropriately so capability grows throughout the organization. They establish feedback loops that test assumptions rather than simply exchange information. They clarify accountability so work flows smoothly across functions.
None of those activities is particularly dramatic.
Collectively, however, they determine whether an organization consistently delivers on its strategy or continually struggles to achieve its potential.
This is also why I often say that strategy isn’t implemented through projects. It’s implemented through managers. Every day, managers influence hundreds of decisions that either move the organization closer to its strategy or further away from it.
That influence compounds throughout the organization in ways most CEOs never fully appreciate.
The Return on Better Management
When people ask me about the return on investment of management, they’re usually expecting a financial answer. Certainly, better management contributes to stronger financial performance.
But that’s only part of the story.
Better management produces better decisions because people understand what they’re accountable for. It improves collaboration because departments know how work should move between them. It increases engagement because employees understand how their work contributes to something larger than themselves. It strengthens succession because managers spend more time developing capability than solving problems.
Over time, those improvements reinforce one another. The organization becomes more resilient. Execution becomes more consistent. Managers become more confident. People spend less time working around the system and more time benefiting from it.
Financial performance eventually reflects those improvements, but profit is really the outcome, not the starting point.
The Investment That Multiplies
One of the reasons I enjoy working with CEOs is that they have the opportunity to improve not just their own effectiveness but the effectiveness of every manager in the organization.
Think about the leverage that creates.
When a CEO becomes a better managerial leader, the executive team benefits. As the executive team improves, directors begin managing more effectively. Directors influence managers, managers influence supervisors, and supervisors influence every member of their teams.
Very few investments create that kind of multiplier effect. That’s why I don’t think of management as an operational cost. I think of it as one of the highest-return investments an organization can make.
The quality of an organization rarely exceeds the quality of its management.
That has been one of the defining lessons of my career.
The longer I work with organizations, the more convinced I become that sustainable performance isn’t created by a single strategic decision or a charismatic leader. It’s built gradually through thousands of management conversations, decisions, and coaching moments that take place every day throughout the organization.
As the head of the organization, you have the opportunity to influence every one of those conversations, not by having them yourself, but by setting the standard for how management is practiced throughout the business.
In the end, I believe that’s one of the greatest responsibilities and one of the greatest opportunities of every CEO.
Learn More
If these articles have encouraged you to think differently about the role of management, you’ll find the complete framework in my book, The Effective CEO: The Balancing Act that Drives Sustainable Performance.
The book brings together the ideas we’ve explored throughout this series, including organization design, accountability and authority, managerial leadership, talent management, strategy execution, and the practical disciplines that help organizations achieve sustainable performance.
Learn more about The Effective CEO here:
