Northern Ireland suffers from chronically poor economic productivity.
Academics at Queen’s University have been investigating whether bad management is part of the problem.
What is productivity?
It is a measurement of how much economic output is created by each job or each hour of work.
Over the long term, increased productivity is needed for an improvement in living standards.
Since the financial crisis of the late 2000s, the UK has suffered from weak productivity growth and Northern Ireland has usually been the least productive part of the UK.
Where do managers come into this?
The major drivers of productivity are workers’ skills, investment in the tools they need to work with, like IT systems or factory machines, and the adoption of the newest technologies.
The role of managers is to organise these things in the most effective way: recruiting and motivating the right people, giving them the right tools and introducing innovative technologies and processes.
The academics at Queens are trying to build up a comprehensive picture of why Northern Ireland has such poor productivity and their most recent research looks at the role of management.
What did the research involve?
Central to the research was a survey of more than 270 companies which were broadly representative of the Northern Ireland economy.
It was based on earlier work by the Office for National Statistics and asked firms about their management practices covering areas like employment practices, performance management, training and the use of key performance indicators.
It used those responses to calculate an overall management score for each of the firms.
It also looked at each of the firm’s publicly available financial performance as well as asking them about their use of digital technologies and the extent to which they trade outside Northern Ireland.
What did it find?
Perhaps unsurprisingly it suggests that good management matters.
Firms with higher management scores perform better, are more likely to be exporters and are more likely to have introduced digital technologies to their businesses.
Larger firms and those competing in markets outside Northern Ireland have better management practices, whereas poor management practices are typically found in firms which face a lack of competition and in second-generation family firms.
The research also finds that investing in management training is worth it: having well qualified managers who have undergone leadership training explains a lot of the variation in performance between firms.
What are the takeaways?
The researchers suggest that firms and government should focus attention on upskilling managers by putting them through appropriate leadership training.
It suggests that the biggest gains could come for firms which are small, second-generation family managed, with less qualified managers and primarily selling to the domestic market.
That could have implications for Invest NI which is currently overhauling its strategy to focus on improving Northern Ireland’s productivity.
Source : BBC
