· 2 min read · News

CMI report identifies ‘crisis in management’

Published:

UK businesses are facing a “crisis in management” and are at risk from a “ticking time bomb of myopic management”, an independent commission has warned.

The Commission on the Future of Management and Leadership, founded by the All-Party Parliamentary Group on Management and the Chartered Management Institute (CMI), calls for UK businesses to focus on purpose, people and profit to help the UK economy achieve its full potential.

It issued the warning in the report Management 2020: Leadership to unlock long-term growth, which features testimonies from more than 60 individuals and organisations (including John Lewis Partnership chairman Charlie Mayfield and Thomas Cook CEO Harriet Green), plus a survey of more than 2,000 business leaders and managers. 

Regarding purpose, the commission proposes companies should define long-term aims beyond hitting financial targets. 

According to the research, 57% of leaders surveyed admit that their organisation performs poorly or could do better on key measures. Only 37% of respondents say their CEO is rewarded for delivering value for all stakeholders, rather than just for meeting financial targets. 

When it comes to the people element, 71% of leaders admitted they either don't train first-time managers or could do better training them. This means up to 150,000 employees take on management roles without training every year. 

The report also suggests employers are neglecting coaching and mentoring, with only 24% saying their organisation does it 'well' or 'very well'. 

No investment in potential

On potential, the commission claims UK business is not investing enough in developing the next generation of managers and leaders. 

More than half (57%) of managers surveyed said their organisation does not offer young people work experience and a further 64% said their employer does not report on how it is working with schools, colleges or universities, or does so poorly. 

Barry Sheerman MP, commission co-chair and chair of the All-Party Parliamentary Group on Management, said employability needs to be embedded in education. 

“Government should work with partners to build exchange networks, helping employers to set up work placements and share ideas with each other and with schools, colleges and universities,” he said. 

He also called on the Government to encourage businesses to report on how they are working with communities and developing their people.

Peter Ayliffe, CMI president and co-chair of the commission, said the UK is facing “widespread under-investment in the next generation of leaders”.

“Unless all of us responsible for leading businesses, public services and charities acknowledge that we are at a tipping point and commit to being part of a better managed Britain, the nation's sustainable long-term growth opportunities will not be fulfilled,” he said. 

“Without a genuine focus on the three critical areas of purpose, people and potential, we cannot hope to build a sustainable economy – nor a cohesive and prosperous society from which everyone benefits." 

Further reading 

Read HR magazine’s in-depth look at integrated reporting, the next evolution in management reporting.