Management team study: The positive spiral of common working rules

The work practices of management teams have extremely positive effects on their organisations’ financial success. The clearer the common rules for the work of management teams are set, the more productive their decision-making is.

“Common working rules defined in writing give the work of management teams an internal form and positive discipline. When the management team is founded it is a good idea to agree on working rules for meetings straight away: how often it meets, when the meeting officially begins or how speaking turns are shared. These can sound like obvious things, but if they are not agreed on the management team’s work can drift into a very mixed-up state of mind, meetings can be unstructured and decisions can remain unmade,” says Research Director Mikko Luoma from the Department of Management at the University of Vaasa.

Prioritising matters is also a key part of management teams’ work. Management teams’ work is made easier when people know before meetings whether the meeting is about taking decisions, discussion or distributing information.

“At the end of the day, management teams seldom take decisions. When they are taken, it is important to make sure the news of the decision-making is passed on. News about the decision should be communicated at the very least to the people whom the decision concerns,” Mr Luoma says.

The outcomes of management teams’ work are also part of a second area that has an extremely positive affect on organisations’ financial success.

“From the viewpoint of financial success, the management team’s ability to take decisions which support strategy and to impassion staff to get on board with that strategy are particularly important. The members of a leading organisation’s management team also see the defects and strengths in their own work in a coherent way,” Mr Luoma says.

General operational requirements are the best known

The Department of Management of the University of Vaasa, in collaboration with HRM Partners Oy, carried out a Management Team study in the autumn. It examined the profile of management groups and the links between management teams’ work and organisations’ success. The study examined the effectiveness of management teams in four areas: (1) the general functional requirements of the management team; (2) the work practices of the management team; (3) the dynamics of the management team, and (4) the outcomes of the management team’s work.

According to the study, a management team’s work practices and the outcomes of its work have an extremely strong and positive effect on the organisation’s financial success.

“In these areas, management teams also have the most room for improvement. A management team’s work practices and the outcomes of its work make a successful organisation stand out from the rest. On the basis of the study outcomes we can say that management groups’ general operational requirements are in the best shape of all the areas we examined. Management teams have enough skills at their disposal, a clear role in their organisations’ hierarchies and well-functioning co-operation with boards of directors and owners, for example,” Mr Luoma says.

Room for expanding study of work dynamics

Of the four areas under examination, the link between management team dynamics and financial success was found to be the weakest. Mr Luoma finds this outcome surprising, as assumptions would lead one to believe that trust between management team members and their interaction were important factors in strengthening organisations’ success.

“Does this mean that points of style don’t mean so much in management teams’ work after all? Leading by fear and a bullying attitude in meetings do not necessarily mean that an organisation will not succeed,” Mr Luoma reflects. In his opinion, it would be worth studying management team dynamics in the long term to determine whether a short-term or long-term phenomenon is at play.

“This kind of research outcome is interesting in any event because it gives food for thought and a basis for further studies,” Mr Luoma says.

Quality research material

Research Director Mikko Luoma is impressed by the materials gathered by HRM Partners Oy in its Management Team study and thinks that they are of very high quality. He has not, in the Finnish context, come across such a wide and varied concept in which such wide-ranging views of management teams were gathered.

“Studies of management teams usually only examine the team leader’s view of work or, sometimes, compare matters between several companies. Almost all members of management teams participated in this study, thanks to which the study outcome are objective,” he says.

In international management team studies, the significance of “hard variables” for management team work is examined: age, gender, work experience, education and job description.

The quality of the research materials is also attested by the fact that the research outcomes come to the fore clearly from the outcomes.

“Usually, a researcher has to look for perspectives or tensions in research materials. In this research, the outcomes were instantly visible. A strong correlation between management teams’ practices and organisations’ financial success was very statistically significant, as was the correlation between management work outcomes and organisations’ financial success,” he says.

Tips for developing your own skills

HRM Partners Oy’s Account Manager Jari Taipale says that the Management Team study was enthusiastically received in the autumn. Busy management team members answered the questionnaire, which had been expected, actively. A couple of years had already passed since HRM Partners Oy’s previous management team study.

“The high level of response to the study speaks to the desire of management teams for new, research-backed data about the effects those teams have on organisations’ financial success and about ways in which they can react to changes in the business environment. As for us, the outcomes of the study will help us to develop our skills and services in the area of management training and in supporting our clients’ business growth,” Mr Taipale says.

 

What was studied?

The aim of the study was to clarify the profile and effectiveness of management teams and the possible links between management team work and organisations’ success. The study was a continuation of HRM Partners Oy’s 2013 management team study.

The study examined the effectiveness of management teams in four areas: (1) the general functional requirements of the management team; (2) the work practices of the management team; (3) the dynamics of the management team, and (4) the outcomes of the management team’s work.

Who participated?

In autumn 2015 HRM Partners Oy got management teams’ contact persons’ approval to carry out the study, after which management team members answered research questions online. The study consisted of both multiple-choice questions and open questions.

A total of 609 people from 105 management teams took part, of which 84.7% were from private companies, 12.4% from the public sector and 2.9% from non-commercial organisations. Of the organisations, 41% were large companies, 36% were medium-sized and 23% employed fewer than 50 people. In total, the organisations surveyed employed more than 40,000 people. Of the respondents, 84% were members of management teams.

Management team profile

Management teams had an average of seven members (actual numbers varied between three and 15). Public sector organisations had an average of nine management team members. The average share of women in management teams was 35%, and 53% in the public sector.

The most common functions represented by women in management teams were HR, finance and marketing. If a staff representative was present, this person was most often a woman.

Of management team chairpersons, 18% were women.

Among the respondents, 82% had been in the management team for up to five years. Just 6% had over ten years’ experience in the same management team.

Many respondents had experience working in more than one management team.

In terms of age, 41% of the management team members studied were aged 41 to 50. People aged under 30 made up no more than roughly 1%.

 

Author: Olli Manninen

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