Front-line bosses may be far more valuable for an organization than has been previously thought. According to research from Stanford Graduate School of Business, good as opposed to poor line-managers and supervisors can increase organizational productivity by as much as 11% — or the same amount as adding an additional worker to a nine-member team!
CEOs are often put under the spotlight, with everything from how they spend their time to their leadership style closely scrutinized. But what about managers and supervisors lower down in organization hierarchies? These are the people that most employees directly work with, yet their ‘value’ is less discussed, which is surprising considering more often than not, supervisors are the ones that hire, fire, instruct and reward workers. How much of an overall impact do these bosses have on an organization? More specifically, how much does it matter if a line manager is a good one or a bad one?
New research based on the study of a large company has revealed that a very good front-line boss can increases the output of his/her supervised team by up to 11% more than a bad one. As for what makes a boss a good one, the researchers single out that the ability to teach is necessary to fall under this category; employees that have been taught better work methods by their bosses are the ones that demonstrate improved productivity, which is something that lasts even when their boss changes.
Focusing on strengths is important, so assigning the best workers to the best bosses was found to be the most efficient way of structuring an organization, rather than assigning the best bosses to the weakest workers. Finally, replacing a boss who is in the lower 10% of boss quality with one who is in the upper 10% increases a team’s total output by approximately the same amount as adding one worker to a nine-member team.
Methodology: These findings were based on daily output measurements for over 23,000 workers matched to nearly 2,000 bosses. The study took place over five years, from 2006–10.
According to this research, the difference between a good boss and a not-so-good one lies in their ability to teach their workers — not, as is usually assumed, in their quality of supervision or ability to motivate, though these are also important. As such, senior leaders should encourage supervisors in their organization to focus on teaching more. This might involve skill transfer or teaching employees good work ethics and work habits; ensuring that the skills taught should be persistent. Here is where teaching differs from motivation; the latter might affect performance today, but will lose its impact more quickly.
Sorting is also key; assigning better bosses to better workers provides greater leverage, as good bosses increase the productivity of high quality workers by more than that of low quality workers.
Finally, line-managers should note that these findings show the exit rate of bad bosses is almost twice the exit rate of the average quality boss!
The Value of Bosses. Edward P. Lazear, Kathryn L. Shaw & Christopher Stanton. Stanford Graduate School of Business Working Paper (June 2014).
Ideas for Leaders is a free-to-access site. If you enjoy our content and find it valuable, please consider subscribing to our Developing Leaders Quarterly publication, this presents academic, business and consultant perspectives on leadership issues in a beautifully produced, small volume delivered to your desk four times a year.
For the less than the price of a coffee a week you can read over 650 summaries of research that cost universities over $1 billion to produce.
Use our Ideas to:
Speak to us on how else you can leverage this content to benefit your organization. firstname.lastname@example.org