The UK suffers from a 30 percent productivity gap with the U.S., which translates into 85 working days per worker. Research has shown that up to half of that gap is due to how U.S. competitors deploy resources within their businesses, which in turn is traced to different management and leadership practices.
Kieran Mannion (Dept. for Employment and Learning, Belfast) wanted to figure out why U.S. managers seemed to be more productive than their British counterparts. He discounted the usual reasons trotted out, such as cultural differences or the fact that American managers work longer hours.
Instead, Mannion conducted interviews with 45 American HR managers and leadership development practitioners with first-hand experience working in both the U.S. and the British Isles. And what did he learn?
Higher instance of degree-level education among managers in the U.S.
Most respondents said business leaders in the U.S. were generally better qualified than their counterparts in the UK. “In the private sector, managers expressed surprise that so many of their UK colleagues had not been to university, pointing out that a degree, or even an MBA, was simply the starting point in the recruitment process in the U.S.”
More focus among students on business as a career
Again most interviewees said business management was more highly regarded as a mainstream profession in the U.S. “The perception was that European business was dominated by professional accountants rather thabn marketers or other generalist leaders. . . On the other hand, fewer people in the UK enter directly into management.”
Greater mobility among U.S. managers
Many of the managers interviewed from multinational corporations said American leaders were more mobile compared to colleagues in the UK and Ireland. “In the U.S, business leaders tend to take a much greater level of personal responsibility for the management of their own careers. This leads to much more proactive job searching and generally lower tenure in any one job.”
More flexible employment laws allow for non-performing managers to be weeded-out
While the HR specialists interviewed recognized that labour laws in the UK and Ireland were among the most flexible in Europe, the predominant view was that it was difficult to terminate the employment of a non-productive manager.
Greater use of leveraged compensation packages and stock options
Variable pay schemes, including bonuses and profit sharing, form a much larger proportion of the US managers’ overall compensation package than is the case in the UK.
Greater development and adoption of business strategy theories
“The sheer volume of research into business strategy and management techniques and practices in the U.S. had created a clear role for business process engineering that had given the U.S. a competitive advantage.” Factoid: As recently as the 1980s, UK universities had little involvement in the business world.
More prevalent geographically distributed management teams
American corporations could pioneer standardized management practices because the U.S. is a single large marketplace with no currency, language, or cultural barriers. This encouraged much higher growth levels and more widely distributed management teams. This, in turn, forced U.S. companies to find ways “to ensure consistency across widely geographically distributed managers to replicate the same standards of performance across different regions and markets. In turn, the development and adoption of standardized management practices helped these companies to achieve higher productivity, better returns on capital and even more robust growth.”
“Leadership. . . for success”, by Kieran Mannion; Leadership and Organization Development Journal (Vol. 30 No. 7, 2009; pp. 639-648)
photo credit: R4vi
