UK management’s crisis of confidence

2002

Recent research suggests that UK workers have little confidence in their managers. The findings are another blow to the self-esteem of British managers still wincing from the government’s decision to appoint a US consultant to examine how poor management performance is undermining UK competitiveness.

A poll of more than 3,500 UK employees by Mercer Human Resource Consulting found that fewer than 4 in 10 trust their management, and less than half believe their organisation is well managed. A separate survey by the recruitment group Reed also suggests that workers’ confidence in their bosses has plummeted. Of 2,600 workers surveyed by Reed, nearly two-thirds said they trust their managers less now than they did two years ago. Morale has also fallen steeply.

These are just the latest concerns to be raised about British management. Recent reports from the consulting firms McKinsey & Company and Proudfoot Consulting identified weak management skills as a key factor in the disappointing performance of UK-owned companies. And in October, the DTI appointed Professor Michael Porter of Harvard University to examine the link between poor management and low UK productivity.

Many UK companies claim to be deploying best practice, but few really are So what does all this say about the state of British management circa 2002? Before we get too downcast, the Reed results are probably a sign of economic uncertainty rather than anything else, a point acknowledged by Reed CEO James Reed. The Mercer findings are similar to recent survey findings in the US. They confirm what most people already knew – workers on both sides of the Atlantic have a deep-rooted distrust of management.

What may be significant is that a larger proportion of UK managers polled by Mercer were skeptical about their own bosses. British management seems ill at ease with itself. Professor Porter, when he makes his report in early 2003, is unlikely to offer reassurance. UK managers may resent the intrusion from an American business guru, but UK plc has some issues to face up to.

According to McKinsey, British productivity lags behind other leading Western economies, and the gap is widening. UK manufacturing - which still accounts for 19 per cent of GDP and 63 per cent of exports - now trails the US by 55 per cent, Germany by 29 per cent and France by 32 per cent.

In its report Reviving UK Manufacturing, McKinsey places the blame squarely with British management. It points to the productivity of foreign-owned plants in the UK, which - despite drawing from the same pool of workers - are 50 per cent more productive than British owned plants. Workers in US-owned plants in Britain are up to 90 per cent more productive. McKinsey’s chief criticism of UK management is that it has failed to keep up with the latest management techniques. "Many [UK] companies claim to be deploying best practice”, it says, "but few really are."

For British management which thought it had reinvented itself in the 1980s and 1990s, this is not good news. The days when the rest of the world referred to strikes and low productivity as "the British disease", may be over, but we are not yet world beaters. So has the British disease been replaced by a management malaise?

To take the patient’s pulse I asked some non-American experts. Professor Manfred Kets de Vries of the international business school INSEAD has worked with senior managers from all over the world. "Internally, there may be some soul-searching and beating yourselves up", he says, "but the general perception in Continental Europe is that British management is pretty good. The British disease was a long time ago now. The UK business environment is much more entrepreneurial than say France or Germany."

Dutch business author and consultant Fons Trompenaars is an expert on the differences between management cultures. He, too, is generally positive about UK managers. His main criticism is that they are too influenced by the Americans.

"There is nothing fundamentally wrong with British management. Where the British are weak is in the American side of their culture. There is a tendency among British managers to think in terms of shareholder, rather than stakeholder, value. This is a principle that is short-termist."

Closer to home, Professor Andrew Kakabadse of Cranfield School of Management has researched the performance of top management teams around the world. He believes comparing management across nationalities is unhelpful. "The British manager is no better or worse than anyone else", he says. "My database of over 12,500 organisations very strongly suggests that the critical factor is organisation not country. Certain British organisations are very well run and others are poorly run."

From an entrepreneur’s perspective, Professor Gordon Edge, chairman and founder of the technology and consulting company Generics, sees pockets of excellence. “There are many industries where the UK has world class management”, he says. "UK strengths, are flexibility, resourcefulness, creativity and innovation. Weaknesses are low R&D investment, risk aversion and short termism."

No one I spoke to said that British management is perfect. Far from it. But the urge to call in US physicians for every management ailment indicates a lack of self-confidence. As Professor Kets de Vries observes: "Europe has an inferiority complex that all the best management ideas come from America." That is part of the problem.

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