GTP20: Strong leadership and people management skills are more important than ever

Greater Birmingham Chambers of Commerce

How are Greater Birmingham’s business leaders leading their staff through COVID-19? The importance of effective leadership and people management has been accentuated by coronavirus related challenges. However, almost a third of the region’s leaders and people managers don’t feel adequately trained for their roles.

The Chambers’ annual Growth Through People campaign aims to boost productivity through encouraging the take up of best practice approaches to leadership and people management in SMEs across Greater Birmingham. This year, it ran between 2nd March and 2nd April 2020, unexpectedly spanning a period of unprecedented disruption to life in the UK. Physical workshops and the campaign’s first full-day conference were taken online as social distancing measures and later a nationwide lockdown began.

The campaign – much like in previous years – incorporated research into leadership and people management practices in organisations across Greater Birmingham. It should be noted that respondents to surveying and conference polling were a self-selecting group of individuals interested in improving leadership and people management skills. However, the results are interesting nonetheless.

While a lot has changed since the beginning of the campaign, it is the belief of the Chambers that now more than ever effective leadership and people management skills are key to employee engagement, productivity, resilience and growth.

Live polling at the Growth Through People Conference (2nd April) suggested that this is a belief shared across our region. 88% of (78) respondents thought leadership and people management skills are more important than usual amidst the current coronavirus (COVID-19) outbreak. The remainder believed that they were of the same importance as before the outbreak.

This anonymous conference polling also suggested, however, that leaders and people managers across the region have established a strong foundation of trust with their teams. 87% of (68) respondents trust their leader or manager during times of change such as those we find ourselves in presently. Just 3% reported that they don’t have such trust in their leader and/or manager (10% answered ‘not applicable’).

Surveying conducted throughout the March-April period will in many cases reflect circumstances now changed. However, there are some key considerations in this data for policymakers in our current circumstances:

  • There are gaps in leadership and people management training that stakeholders should be aware of when making policy changes and issuing guidance for businesses (e.g. guidance regarding returning to workplaces)

As above, 88% of Growth Through People Conference delegates believe leadership and people management skills to be even more important than usual amidst this crisis, where leaders and people managers are being tasked with additional challenges.

The coronavirus related challenges business leaders and managers are facing must not be underestimated. Managing remote working, supporting the mental health & wellbeing of a workforce transitioning from social distancing back to the workplace, managing individuals who have lost loved ones or otherwise experienced trauma, supporting employees with childcare requirements, supporting workforces through the likely workforce restructuring that’s to come…

Exacerbating the difficulty of these additional pressures on leaders and managers, 30% of Growth Through People survey respondents do not feel that they have had adequate leadership and people management training for their role.

SMEs in the UK are in fact less likely to use formal management practices than elsewhere (Bryson et al, 2018), and internationally a 2012 report by the Department for Business, Innovation and Skills (here) ranked management practices in the UK as only 5th in relation to the rest of the G7 nations.

When making policy changes and issuing guidance for businesses, stakeholders should consider signposting to comprehensive, practical advice and relevant support from organisations such as Acas, CIPD and Chambers of Commerce for leaders and managers who find themselves struggling, particularly where they have received inadequate training for their role.

  • As lockdown eases and focus is placed on revitalising the economy, stakeholder support will be needed to boost leadership and people management skills to fuel economic (re-)growth

96% of Growth Through People delegates surveyed believe that strong leadership and people management skills are essential for business growth, and 98% believe investing in improving leadership and people management skills has a positive impact, increasing organisational productivity.

Indeed, while the UK economy experiences major changes effecting businesses (at the time of survey writing, examples cited were Brexit and the transition period, and rapidly emerging new technologies), Growth Through People delegates most frequently (34%) believed investment in leadership and people management skills and capabilities to be the most important factor in business resilience and growth.

This reflects extensive research showing strong correlation between best practice leadership and people management and the firm-level productivity needed to drive regional and national productivity levels in the UK. The Impact of Management Practices on SME Performance (Byson et al, 2018) found that small improvements in management practices could be associated with up to a 5% increase in the growth rate of a business's productivity.

The government’s 2019 Business Productivity Review (here) also cites from collaborative work with the OECD that “good management is often the key enabler to driving up firm-level productivity and can be the stepping stone to businesses adopting other productivity improvements such as digital adoption and better working practices.”

We know, as above, that there are gaps in leadership and management training. However, Coronavirus-induced cashflow issues can be expected to exacerbate barriers experienced by organisations to investing in further training and addressing these gaps.

Almost all organisations provide some form of leadership and people management training to staff - Just 4% of survey respondents’ businesses do not offer any leadership and/or people management training to staff.

However, a lack of budget for training was the most frequently perceived barrier preventing organisations from increasing investment in leadership and/or people management skills and training (experienced by 49% of respondents).

With faltering cash flow and many businesses reliant on the government’s financial support mechanisms to stay afloat (see the British Chambers of Commerce Coronavirus Business Impact Tracker here), many businesses will need further stakeholder support if they are to boost leadership and people management skills and capabilities.

Whether effective leaders are born, trained or forged in crisis remains a contentious issue. 74% of Growth Through People delegates responding to the survey believed that anyone, with the right training and development could be an effective manager, but only 53% believed that anyone could be an effective leader. However, we can be certain that strong leadership and people management – however developed – will be crucial as we all weather the coming months of further losses, further uncertainty, and further challenges, economic and otherwise.

The following months will continue to be incredibly difficult for many businesses and individuals. Amidst this crisis, out of necessity, many leaders and managers will be working hard to learn, adapt and rapidly innovate. But this presents a key opportunity for businesses as we emerge from this pandemic, to harness and embed the lessons learned, the creative new ideas had and the innovative practices adopted, for recovery and growth.

Emily Stubbs
Policy and patron adviser
Greater Birmingham Chambers of Commerce