CEO Group Challenge –  Getting Managers to Excel

Top managers achieve 2 – 3 times higher performance from their teams than the norm

Why are relatively so few New Zealand managers achieving at this level?

International research has for many years shown that the single greatest impact on the productivity and performance of a team is the leadership styles and behaviours of the team leader, the climate and culture this creates within the team, and hence levels of staff buy-in and engagement.  This is true for first level teams right through to Executive Leadership Teams.

Research by Towers Watson in 2011 focused on utilising their 8 million person and 700 organisation database to identify the absolute top performing teams and units.  Their results, based on factual operating margins, showed that while fully engaged teams delivered on average twice the performance of disengaged teams, the best teams were on average three times more productive.

Further research on these results by Gostick and Elton to understand the dynamics of these great teams identified that their managers create a culture of total belief with their people in the vision, purpose, values and goals for the team, and high trust in themselves as leaders.  As a result, people in these teams are inspired to “give their all” and willingly provide the discretionary effort and passion that delivers brilliant results.

People in these teams were identified as being high in the 3 Es – fully Engaged, Enabled, and Energised.


Staff who care about the organisation and its mission and values, who willingly give discretionary effort, who take pride in recommending the organisation to others, and who have a clear sense of their contribution’s value to the greater organisation.


Staff who feel they work in an environment that positively supports their productivity and performance.  They are provided the right tools, well defined processes, information, learning, clear direction and prioritisation of work, flexibility in how the job is done, and help with overcoming obstacles or challenges.


Staff who feel the organisation and leaders genuinely care about their physical, emotional and social well-being.  Staff have strong trust in their managers and feel regularly acknowledged and valued for their efforts and achievements.  They operate in a very open communication environment, within a positive supportive team culture.

Teams that achieved at the 3 times performance levels had all 3 Es sustained at a high level.  To further demonstrate the immense impact of the team leader on this, team leaders from the highest performing teams in a large health organisation who were put in charge of the lowest performing teams, lifted the low teams to high performance within one year.  Scarily, managers from low performing teams when put in charge of high performing teams reduced the performance of these high teams to low levels – also within 1 year!

Other international research adds to this picture –

  • The world’s longest running 360° Leadership Practices Surveys, by Kouses and Posner, has consistently shown that the competence that staff value and look for most in their manager is “forward looking, future focused” – this impacts positively on all 3 Es. The second thing they most want is a manager they can trust.
  • Research repeated annually at Harvard for 15 years by Amabile and Kramer has shown the single biggest impact on a person’s positive motives and job satisfaction at work is “a sense of making daily progress with meaningful work” – this again impacts on all 3 Es. This is further reinforced by Daniel Pink’s research that the three biggest drivers of a persons job satisfaction and engagement are
    • having a job that provides meaningful Purpose
    • being coached and developed to achieve real masters in this job
    • being given the Autonomy to get on and deliver
  • Research by John Kotter and James Heskett at Harvard over an 11 year period showed that organisations with a strong positive culture – a culture that facilitated adaptation to a changing world and valued employees – grew an average 682% compared with 166% for similar organisations with a weak culture, and share price growth was 901% vs  74%.  Again a culture that feeds the 3 Es.

 So … Why are not more of our managers creating this culture of belief, strength in the 3 Es, and sustained great results?

We recently posed this question to a forum of experienced OD and HR professionals.  We have combined their views with our own research findings, observations and experience.

  •  Failure to make the shift from being a successful technical / professional to an effective manager / leader
    • Not fully making the mindshift transition required from a focus on their own achievement and productivity levels to achieving through others.
    • It is easier to show progress in technical vs  managerial spheres.
    • Appointed to role without timely and effective managerial and leadership training.
    • Lack of highly effective role models.
    • Lack of effective coaching and mentoring.
  • Fear of failure
    • Risk aversion. While this is seen as common in the public sector and local government it is also obvious in many corporates as a result of continuous restructings.
    • Managers see stakes are too high if ‘I get it wrong’.
    • A mindset of ‘play to not lose’ vs  ‘play to win’.
  • Lack of vision clarity as to what great management and leadership involves
    • Not aware of the impact of the 3 Es, therefore don’t value them.
    • Lack of great leadership role models to provide a clear picture of what they could aspire to become.
    • Over focus on results and technical outputs vs  developing people capability and engagement and culture development.
  • Recruiting the wrong people
    • Selection based upon technical strengths and performance, rather than people leadership potential and strategic thinking capabilities.
    • A relatively small pool of people who have that mix of both technical / professional credibility, plus the emotional intelligence and people leadership capabilities, so we select the best available rather than holding out for what we really seek and need.
  • Ineffective management and leadership development
    • Too little too late.
    • Lack of effective on-the-job coaching by their managers.
    • Over concentration on long lists of competencies to be built, without building the necessary mindsets and context for effective leadership, or a clear understanding of what makes a real difference to get the best from others.
    • Lack of leadership transition development, targeted at helping managers make the focus, skills and values adjustments needed as they transition through each tier of management.
    • Neuroscience research shows that for us to commit to change and to rewire our brain’s thinking, we need to think things through for ourselves. Being told or given the answers gets in the way of developing this new thinking.  Yet most managers still do more telling than asking, rather than ask before tell.
  • Time and performance pressures
    • Most managers are time poor and hence focus on what they see are the priorities for their own manager. This often leads to an over-weighted focus on delivering upwards at the expense of growing and developing their people and culture.
    • Research has shown that under pressure the average New Zealand manager defaults to management (task and results focus) vs  leadership (people, future, culture, change).
  • A desire to be liked
    • Further research shows the average New Zealand manager has a high need to be ‘liked’ by their staff (more so than their Australian counterparts) and can put this ahead of being effective. This can detract from the courage and persistence needed to constantly improve performance.
    • While most managers accept they need to turn around under performers, the real challenge is often to inspire average performers to lift to their true potential, and not accept average as okay.
  • Courage
    • While courage is long accepted as a key element of leadership, our own leadership guru Peter Koestenbaum maintains that courage, or inner will, is fundamental to us growing as a leader – ie we need the courage to step outside our comfort zones, to push our boundaries, to ‘go there’ and deal with whatever is necessary, even when it causes anxiety.
    • Unfortunately CEO Group’s 360° Leadership Practices Survey involving over 8,000 New Zealand managers over 25 years shows courage to consistently be one of the lowest scoring competencies for New Zealand managers (pushing comfort zones, sustained initiative and risk taking).
  • Emotional intelligence
    • Daniel Goleman and others’ research shows emotional intelligence to be 85% of the difference between good and great leadership.
    • CEO Group’s 360° Emotional Intelligence Survey, involving over 6,000 New Zealand managers over 15 years shows the average New Zealand manager’s scores for Self Confidence, Achievement, Optimism and Adaptability are up with world best practice.
    • The research shows that while emotional intelligence can definitely be learnt and grown, it depends entirely on having good levels of Self Awareness (we can only change that which we are aware of). In this area of CEO Group’s 360° Emotional Intelligence Survey, New Zealand managers have consistently scored lowest on Emotional Self Awareness, and Self Assessment – ie of all the emotional intelligence competencies, New Zealand managers are rated lowest on understanding their emotional impact on others.
  • Leadership Styles
    • Goleman and others describe 6 leadership styles, and their research shows the best long term team productivity and performance results from a mix of four of these styles – Visionary, Coaching, Affiliative, and Democratic / Participative. Of these, Visionary is the most powerful.
    • CEO Group’s 360° Leadership Practices Survey again unfortunately shows that Visionary and Future Focused is the lowest scoring competency, and two other visionary elements – Change Leadership, and Innovation and Creativity, are also near the bottom.
    • The least effective styles are Pacesetting and Controlling, yet under pressure these are what many managers default to. Overused, they can come through as micro-management and produce a toxic culture.
  • Change Leadership
    • Our world is now constantly changing and change resilience is a key attribute and requirement for both managers and staff.
    • Research shows the level of resistance to change and the development of change resilience is primarily dependent upon the level of trust staff have in their change leaders, and the legacy left from previous changes.
    • Meaningful change with a clear vision and purpose that is well led leads to a positive legacy.  Change that has poor or confusing perceived purpose and benefits, that is pushed through with little regard for genuine people engagement will result in a legacy of enhanced resistance to future change, low discretionary effort, and disengaged people.
    • Change involving restructurings is particularly poignant. David Rock and the neuroscientists tell us that as human beings we constantly scan our world for perceived threats or rewards.  The SCARF mnemonic is used to capture the five elements having the greatest impact – Status, Certainty, Autonomy, Relatedness, Fairness.  Restructurings have the power to be perceived negatively on all five of these elements.  It is hence not surprising that teams, units, or organisations that are constantly restructuring will likely have their 3 Es in continual debit, and staff engagement and discretionary effort at a low ebb.
    • Change leadership is one of the lowest scoring competencies on CEO Group’s 360° Leadership Practices Survey. Likewise, our own research and experience suggests a key reason for lower than desired change results is the lack of truly effective change sponsorship.  This ties in with Daryl Conners research that ineffective change sponsors are the main reason for change failures.
    • While today most managers would say they are experienced with change, experience is different from being an effective change leader.
  • People development
    • Coaching has been shown internationally to be one of the most cost effective means of developing people, with returns on investment quoted of 700% plus. These days most organisations are seeing the value in coaching, are investing in it, and see it as a primary responsibility and activity of managers.
    • However, most coaching is organisation centric – aimed at extracting greater value and performance from an individual, and obviously is what is needed with lower performers.
    • The greater sustainable coaching breakthroughs are coachee centric – aimed at instilling greater value in the individual by enabling and inspiring them to achieve their true potential and their own aspirations. This is particularly true for average and high performers.
  • Our New Zealand culture
    • Our New Zealand culture is characterised by being left brain dominant (80 – 85%), task focused, a relatively low praise and acknowledgement environment, and not high on emotional connection.
    • CEO Group’s research on optimism vs  pessimism shows that within our New Zealand manager population, we score higher than, for example, Americans (+4  vs  +2).  Where we differ is while we get over bad events quickly and don’t allow them to pervade widely, we don’t do as well with good events – we don’t self praise or allow the good feelings to last long.
    • Hardly surprising then that a 2004 survey by Auckland University showed that 47% of people who left their organisation during that year did so because they felt “under-valued” – we suspect little has changed since then.
    • We believe this significantly detracts from the Energised element of the 3 Es.
  • And lastly Trust
    • The basis for any relationship and effective team is trust – this is the currency that leaders deal in.
    • Kouses and Posner’s Leadership 360° results show that Honesty and Trustworthiness is the second highest need by staff of their manager (after Forward Looking, Future Focused).
    • Lencioni’s research shows Trust to be the base requirement for a functioning team, and the root cause of a dysfunctional team.
    • In this respect, CEO Group’s 360° Leadership Practices Survey shows New Zealand managers score highest in these competencies – Trust, Integrity, Ethics and Values – ie New Zealand managers are basically highly trusted by their staff to be honest and act with integrity – they have earnt the right to be a leader for their followers!

So … what has the greatest potential to achieve organisational breakthroughs to greatness?

We don’t believe there is a single silver bullet, but here are some thoughts:

  • An organisation is a community of people brought together to achieve a common purpose and vision. We are clear from all the research that when they feel inspired by that purpose and vision, and engaged, enabled and energised by the way they are led and managed, then superior outcomes and greatness is possible, as a result of this culture of belief and belonging.  Conversely when these are absent, when people feel reduced to being an employee that must perform or else, then people become self focused, genuine commitment is reduced to compliance, discretionary effort wanes, and greatness becomes a forlorn wish.
  • To create a culture capable of generating sustainable greatness in an organisation, the single biggest impact will be the quality of the leaders and managers throughout. Many organisations are dependent upon great systems, CRM processes, products etc.  But all of these are dependent on brilliant people to create, enhance and maintain them.  And in turn the single biggest influencer on the level of engagement, productivity and performance of people and teams is their manager and leader.
  • So an organisation will only ever become as good as the quality of its managers and leaders – they can either be a catalyst to greatness, or a roadblock.
  • We have to fill our management pipelines with people who can both manage and lead: are technically credible and can inspire, are good decision makers and can engage emotionally, have both IQ and EI, are good strategically and tactically, are forward looking and can connect people with the vision, can manage the current reality and lead change, and are totally trusted.
  • It has to be led from the top – and the bottom.

From the top – because experience clearly shows that few if any organisations achieve greatness without great leadership at the top.

While we look to top leaders to provide the vision and strategic thinking necessary to ensure clear and successful direction, their most profound impact is to inspire and enable self leadership to flourish throughout the organisation, and particularly with the managers.

From the bottom – because if the single biggest impact on a person and team’s performance is their direct manager, and with 70 – 90% of staff in an organisation reporting to first line managers, then the impact of first line managers is huge.

While organisations depend upon the technical skills of their professional staff, it is their manager who will determine whether these are harnessed to their true potential, or not.

  • Leadership development needs to get beyond thinking it is about growing a long list of competencies, with the thought that if these are inherent, then great leadership will result, or that it is all about strategic thinking and good decision making.

Leadership development needs to firstly build a leadership mindset – an understanding that leadership and management’s primary focus is to create a culture and environment that inspires people to achieve to their true potential and deliver the desired organisational vision, results, and delighted customers – and what they may personally need to be to achieve this.

Also how to shift their mindset, values, time focus and skill sets as they transition up the management ladder.

  • Based on all the research of what impacts most on the performance, engagement and commitment of staff, we believe the competencies we need most in managers and leaders are –
    • Vision
      • Forward looking and future focused, an ability to articulate a clear purposeful direction and gain ownership from their people to it. Strategic thinking, whole brain thinking, and innovation.
    • Integrity, ethics and honesty
      • The cornerstones of trust.
    • Courage
      • The will to step outside their comfort zones, push their boundaries, deal with the tough stuff, continually grow.
    • Self Awareness
      • Of their emotional impact on others, and how to change this when necessary.
    • Emotional Intelligence
      • Especially the areas of empathy, self control, emotional energy.
    • Influence
      • The ability to build great relationships of influence.
    • Change Leadership
      • The ability to initiate and lead change in a manner that takes people with you, builds resilience to change, and leaves a legacy of trust.
    • Agility
      • The ability to adapt their thinking, communication, influence and leadership styles to suit the situation and people, and to change strategies and direction quickly when needed.
    • Coaching
      • The ability to help others unlock and achieve their own true potential.

And to have these competencies underpinned by a leadership mindset of achieving brilliant results by creating a culture that inspires and enables people to achieve their true potential, and deliver to their best, everyday.

  • Develop a coaching culture and practices within organisations that has managers seeing this as a critical activity and practice to enable others to achieve their true potential.

The coaching needs to be coachee centric and help them achieve their own true potential and aspirations, rather than the common ‘coaching for performance’ focus which leaves coachees feeling it is only about the organisation’s needs, and if I need coaching then I must have a problem and be under-performing.

  • Management structures need to ensure that managers have the time to deliver on the leadership mindset – it takes time to build the necessary relationships, build trust, coach, inspire, team build etc.

We can’t continue to let hard (results, KPIs, processes, systems, task) drive out soft (relationships, engagement, coaching, emotional intelligence, culture and team building), as currently occurs.  Hard delivers short term results to expectation, soft builds long term results beyond expectation.

  • We need to build cultures that embrace praise, encouragement, winning, feedback, and putting people and teams on pedestals.
  • Many current performance review systems that involve forced percentage rankings across a bell curve tend to motivate and encourage 10 – 20% of employees, and demotivate the rest.

We need performance management systems and processes that motivate and inspire people to want to lift their performance across the full spectrum from poor performers to super stars.

  • We need greater focus on succession planning – growing and advancing our own talent. It is both disheartening to current staff to see outsiders regularly preferred to themselves, and is an indictment on our internal coaching and developmental practices that we don’t have a pool of ready candidates for roles.

Maurice Batey & Jon Heslop

CEO Group