The Three Ps: The Key to Unlocking Long-term Growth?

As discussed in a previous article the Commission on the future of management and leadership published, “Management 2020: Leadership to unlock long-term growth” in July 2014. The report highlights the issues facing British business, outlining that business has lost sight of the fundamental tenets of great management: Purpose, People and Potential (the three Ps).

Research shows the proportion of employers who think a lack of leadership and management skills are holding back business growth is 64%, yet the proportion of employers who provide management training is only 34%. This would indicate that there are opportunities being missed due to the lack of direction, drive, oversight and forward thinking. On this basis, there is an argument that businesses must go back to basics in respect of their management training. Managers are being bogged down with a deluge of short-term financial targets, and too much emphasis is being placed on the quick win. As such, the recommendation from the Commission is to refocus on the aforementioned three Ps:

  • Purpose: Company values must be exemplified in management working practice, there should be a clear direction which builds sustainability for the long term, rather than always focusing on short-term financial targets.
  • People: Management must start to address the skills gap, it is estimated that the UK needs approximately 200,000 new managers every year leading up to 2020. There needs to be a clear investment in training and development, or business will face a talent crisis (which many businesses are expressing concern over now).
  • Potential: Managers and leaders alike should champion their staff, and ensure that more senior staff within the company know what their teams are capable of. It is also important that the status quo is challenged, as well as the suffocating bureaucratic hierarchy that some businesses hang on to.

The Commission is basing the recommendations on evidence which shows that the UK is lagging behind many competitors on key economic indicators, productivity is 21% lower than the rest of the G7. This is compounded when the measures of management are similarly lower than that of rivals (Statistical Bulletin: International Comparisons of Productivity – Final Estimates, 2012, ONS, 20 February 2014). Furthermore, it is estimated that time wasted by poor management is costing as much as £19bn a year (Leadership and management in the UK – The key to sustainable growth, Department for Business, Innovation & Skills, July 2012).

The emphasis on adequate training for managers comes from government data which indicates that approximately one million new managers will be needed by 2020. Yet despite clear evidence, 71% of leaders surveyed by the Chartered Management Institute (CMI) indicated that they could have done more in respect of training first time managers, if they even trained them at all. This suggests that 150,000 employees a year are undertaking a management role without adequate training or preparation.

Fundamentally, managers need to think long-term rather than focusing on short-term fixes. This would also allow for the utilisation of an organisations long-term purpose to be incorporated into an effective business growth plan, creating the need for managers and leaders to ensure that the organisations purpose, vision and mission are defined. In turn, this should promote more innovations that lead to growth in revenue, profits and jobs.

Training and development will be key to this process; individuals and organisations that take advantage of the opportunities ahead will be the leaders who unlock long-term growth.