New research provides evidence of a link between investing in management capabilities and business profitability.

The report from Cranfield School of Management confirms the positive impact of Investors in People on management and business performance.

The analysis, conducted by the Centre for Business Performance at Cranfield, found a clear link between good management and improved business performance, in spite of the challenging economic context and the wider impact of the recession on business success.

The study, which combined case studies, a survey of over 400 employers and analysis of financial performance information from Companies House, found working with Investors in People increases profitability by enhancing managerial skills, knowledge and experience, improving the effectiveness of management development practices and increasing the performance of managers.

It also inspires a high-performance management culture and an effective learning environment, both of which help to improve business performance.

Mike Bourne, professor of business performance at Cranfield School of Management, conducted the research.

He said: "The link is clear. Build management skills and you will drive up business performance. We had an open mind when we conducted this research but the empirical evidence is: Investors in People is the foundation of effective management practice and working with it is a clear route to success. Given the tough economic environment during which the research was conducted, this is especially significant."