How prepared are your people to become effective managers? The data is mixed.

Introduction by Laszlo Bock, BetterUp’s newest advisor, co-founder of Humu, and former CHRO of Google.

When I led People Operations at Google, we set out to understand manager performance, and what we learned became known as Project Oxygen. Our findings led us to learn that specific behaviors make managers great...at Google. But a question nagged at me: what about every other company?

BetterUp has, at long last, answered that question. They initially developed their Whole Person model to identify what makes managers great at any organization, and the latest research applies this model and builds on it to help leaders understand where their new managers are most lagging — and what to do about it. I was moved by three of their findings in particular:

Read the full study and what they mean for your business below.

In these leaner times, looking internally for new managers may be attractive (or your only option). While external candidates can offer a fresh perspective for your organization, there are widely perceived benefits to promoting your existing individual contributors into management positions.

For one, it will save you upward of 2X the departing manager’s salary to replace them internally over an external candidate. Not to mention that offering upward mobility to your top performers is likely to engender trust and commitment, driving retention. 

But more importantly, you may want to promote your individual contributors to management roles because you understand what they're capable of. You've seen them in action. You know what you're getting and may deduce that their functional success and historical knowledge of the business could parlay nicely into management success. There is plenty of precedent for this across functions (think: the rockstar salesperson turned sales manager). 

But does it work? Do some IC functions have an inherent readiness to lead? Or are you just setting your people and teams up for failure without the right development?

Nature vs. nurture: what’s at stake for your business?

Across industries, studies show manager effectiveness has a huge impact on team performance, affecting engagement, creativity, productivity and retention. Strong managers boost team performance and retention, and poor managers hamper it.

A recent study by The Chartered Management Institute found that although one in four people in the workforce have management responsibilities, very few have been trained to do their jobs. The impact of this is that employees who described their manager as ineffective feel seriously less satisfied in their job (27% vs. 74%), valued (15% vs. 72%) and motivated (34% vs. 77%) than those who described their managers as effective. 

Laszlo Bock has done the work to help put this in clear monetary terms as well; he estimates that bad managers cost US companies at least $960 billion per year. 

Yet, still, we’ve all heard, or even been guilty of uttering, a variation on the line before: “They’re just a natural leader,” or “they were born to do this.” It’s a familiar notion from locker rooms to the boardroom — that certain inherent factors define whether someone is suited to become a leader. That leadership contains plenty of intangibles. You either got ‘em or you don’t. 

There’s also plenty of anecdotal evidence about individual contributors easing into management roles and crushing it with little training and development, but is there data to back it up? 

We studied over 63,000 employees (including a subset of top performers on the verge of promotion) across all industries and functions, ranging from Engineering to Marketing and everything in between. We compared these employees to what we rate as “average” managers (those who rank somewhere in the middle of scale for the four key capabilities that help define effective management today: coaching skills, recognition of their teams, authenticity, and problem solving) and “great” managers (those who rank in the top 25th percentile for those same capabilities). 

We found that while there are qualities that some employees may find easier to naturally activate in a management capacity than others due to the nature of their work (good communication, strategic thinking), employees lack in one or more core capability essential for effective management, and all of them lag behind significantly to your great managers.

Being a people manager comes with different stressors and necessary mindsets or skill sets than simply mastering the skills of their previous IC role. So, how do you cultivate greatness for your next wave of frontline leaders when there’s so much at stake for your business?

1. Functions with least manager readiness 

Technical roles tend to be the least ready to step into management roles without additional significant development, as they have the largest gaps across the board in the key capabilities we found are now responsible to drive effectiveness for their teams.  
Top-performing Engineering, Product, and Customer Service employees may seem ideal to promote because they excel in their functional abilities and can model preferred working behavior and norms for their teams. However, the reality is that technical ICs on the verge of promotion lag considerably when it comes to a key component of effective management: coaching skills. 

Coaching skills are extremely important for managers because they promote communication and relationships where questions are asked instead of answers provided, support is offered without judgment, and development is facilitated rather than dictated or commanded. 

2. Functions with most manager readiness

On the other side of the coin, employees in Community Services, Program Management, Consulting, and similar roles are more prepared to step into management (meaning they have the smallest overall gap when measured against average managers in these core capabilities). 

These employees are likely used to working cross-functionally and influencing others, so they rank highly in social and emotional skills. In addition, their day-to-day management of strategy allows them to zoom out and look at the big picture, a valuable trait needed to be skilled at problem-solving. 

In particular, Healthcare Practitioners and Community/Social Services employees are on par with average managers in 3 areas: authenticity, recognition, and problem solving. Manufacturing and Production employees are on par with managers in two areas: authenticity and problem solving.

3. Stuck in the middle

Sales, Human Resources, Legal, and other functions fall between these groups. These functions may benefit from their respective roles' teamwork and external facing aspects. However, they typically trade in repeatable tasks and tend to assess situations and solve problems by applying rules or standard methodologies accordingly. Across the board, they are behind average managers in coaching skills, authenticity, and in most cases, problem-solving abilities. 

The “greatness gap”

In some cases, if you squint, it may make sense to go ahead and promote internal candidates from certain functions into open managerial roles. Maybe you don't have the budget, resources, or time for proper management training and development. Backfilling a vital managerial role often cannot wait. The odds are decent enough that through trial and error and on-the-job training, they may become average managers in your organization. 

But what if we zero in further on only your top performing employees across functions? What if you promote that rockstar engineer or customer service rep? Will their functional success set them up to succeed as a new manager? We looked at a subgroup of top individual contributors on the verge of promotion and measured how they stack up against both your average managers and your best ones.

In a survey of 80,000+ frontline managers, Marcus Buckingham notes that “while good managers use the skills of the workforce to move in a common direction toward shared goals, top performers leveraged the individual skills of each employee for the best possible performance. Top managers take a win-win approach, looking to make the best match of human resources and company strategy for the ultimate competitive advantage.” Sounds about right. 

While average managers tend to look for quick fixes to problems and give up when they experience setbacks, great managers will tend to take more of a long-term view of success for their teams and the organization. Meaning they possess the critical skills and capabilities needed to examine what's not working and help future-proof operations. 

So, how wide is the skills gap between a top employee on the brink of promotion and one of your great managers — the ones driving high team performance and contributing to organizational success? It’s a lot wider than you’d likely want it to be.

Greatness isn't preordained or inherent. In the words of Good to Great author Jim Collins, “greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.” 

Greatness takes work, dedication, and the opportunity to put in the time needed to develop yourself into a better leader. For this to happen, there needs to be an organizational terra firma of "greatness culture," and that starts with the programmatic investments you make in learning and development.

Develop, develop, develop

Newly promoted managers, whether they are top performers or not, need many new mindsets and capabilities to succeed in a whitewater world. While training seminars and boot camps can equip new leaders with information and technical skills, the ongoing development of critical interpersonal skills to inspire, coach, and lead teams is proven to pay mor significant long-term dividends. 

An estimated 50% of new managers fail within their first year on the job. Of the 50% who don’t outright fail, most “flail”— learning by trial and error to move slowly up the competency curve. However, we know that through ongoing training and development, managers new and experienced alike can learn in the flow of work (where it is more relevant, contextual, and easily absorbed).

At BetterUp, we found that with one form of ongoing development—personalized learning with the help of a coach—all managers not only gained the accountability and self-reflection needed for change and growth to occur but that they were capable of strengthening the core mindsets needed to be great. 

When it comes to newly promoted managers in particular, after 6-12 months of coaching, they surpass average managers without coaching in these four skills. In addition, they also report 12% greater productivity than the average frontline managers without coaching.

And that's only the start because, with ongoing development via coaching, we found that they are well on their way to greatness. Within 12 months of coaching, those newly promoted managers are closing the greatness gap of your best managers by 31-63% across all core capabilities. These capabilities will only strengthen over time.

What about employees in technical roles?

At the aggregate level, the type of development via coaching we see above is promising. But what about the employees in technical roles we examined at the beginning of this post? With just 6-12 months of coaching, they also grew considerably across all four key capabilities of effective management.

The stressors of frontline managers have been well-documented — not only do they have more on their plate than ever before, they’re burned out and making plans to quit in droves. Backfilling these roles can become a precarious tightrope for leaders as headcount budgets shrink and the market for top talent remains tight despite the economic downturn.

When looking to promote your people into management roles or even boost the capabilities of your average managers, all roads lead to development. After all, as Hall of Fame football coach Vince Lombardi famously quipped, "leaders are made, they are not born."