New Plan: Be Competent

You go out with people sometimes, and you’re just like “Hold up, you’re a person?!? How? How are you– how do you pay rent? How do you have a job? How are you paying taxes? How is the world not crumbling around your idiocy?!?” You meet people so dumb that you get scared for their safety. Shit, I better walk this person home, they might just walk out into the street and get hit by a bus! They can’t even have a conversation! They’re just texting and Instagram-ing pictures of salt shakers – what happened to people?!?

– Aziz Ansari, Buried Alive (2013)

Aziz may be telling a joke, but that frustration feels awfully familiar. Haven’t we all struggled to cope with a clueless manager, or been trapped on the wrong end of a customer service call with a support rep who can’t do basic math? On some days, it can truly feel like incompetence is everywhere. Well, get ready to add some scientific research to that pile of anecdotal evidence! While they may not have his comic flare, Raffealla Sadun, Nicholas Bloom, and John Van Reenen provide real data to support the outlook expressed in Aziz’s tirade.

Why Do We Undervalue Competent Management?, published in the September 2017 edition of the Harvard Business Review, presents research which reveals just how rare basic managerial competence really is. The study is based on interviews with managers from over 12,000 companies and 34 countries. These managers were rated on a 1-to-5 scale based on their performance of core management practices – things like monitoring employee performance or setting clear goals (unfortunately, key skills like visualizing data or communicating simply and clearly were not evaluated). This study was not a test of brilliance or innovation; no one was asking these managers to craft the next great American novel. All we wanted to know was if these managers knew their ABC’s.

Yeah, you know exactly how this turned out.

Only six percent of companies averaged a score of 4 or higher on the 1-to-5 scale, while almost double that – 11% – averaged a 2 or lower. Scores of 2 or lower indicate “very weak monitoring [of performance], little effort to identify and fix problems within the organization, almost no targets for employees, and promotions and rewards based on tenure or family connections [rather than merit].” While the majority of scores fell in the middle ground (don’t knock it, sometimes being average pays off) it is worth repeating that only 6% of 12,000 companies truly perform well at core management, while nearly twice that amount fail to deliver on the basics.

What should we take away from this “shocking” data? First of all, don’t be shocked. Aziz Ansari hit the nail on the head – incompetence is everywhere. Just beyond the sad reality that the world around us really is that stupid, however, is an opportunity.

The management skills that so many companies fail to deliver on – monitoring performance, setting goals, documenting processes – are not rocket science! You don’t have to reinvent an industry to excel at basic management, but the payoff may be just as great. The data indicates that moving a firm from the bottom to the top 10% of managerial competence is correlated with a $15 million increase in profits, 25% faster annual growth, and 75% higher productivity. In corporate terms, that is a Scrooge-McDuck-level-shit-ton-of-money just for knowing your ABC’s.

Not everyone can be named one of TIME’s most 100 influential people, be the highest paid actor in the world, or eat 821 pounds of cod in a calendar year. Only the Rock can do those things. All of us, however, can take the time to learn and excel at the ABC’s of our own chosen fields – and by doing so, you too can move into that top 6%. What’s the difference between the comedian on-stage making the joke, and the salt-shaker-Instagram-ing punchline? More often than not, it’s all about the basics.

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