Bad Managers are Hurting Your Bottom Line

Despite being the founder and CEO of a restaurant company, Cameron Mitchell does not believe the customer comes first. Instead, it’s the employees (or associates) who do, he says.

“Restaurants often expect their staff to take care of guests, without taking good care of them first,” he says. “We put the associates first, and the results have been spectacular.”

Mitchell’s company, Cameron Mitchell Restaurants, has grown from one location in Columbus, Ohio, in 1993 to 33 restaurants in 12 states today, with brands including Ocean Prime, Molly Woo’s Asian Bistro and Harvey & Ed’s. Mitchell credits much of his success (his company has a 4.5 rating from current and former employees on Glassdoor and has a turnover rate far below the restaurant-industry average) to an “associates-first” culture, in which managers who mistreat the staff are quickly shown the door.

“I had a chef who yelled at a female colleague–I fired him on the spot, even though he was a really talented chef,” says Mitchell, author of Yes is the Answer! What Is the Question?: How Faith in People and a Culture of Hospitality Built a Modern American Restaurant Company. When a company’s leadership insists on respect for others, he says, it sets a clear tone for how managers are expected to behave toward their direct reports.

Setting a positive example is important for managers, who are often the key to retention. A recent survey from Teamblind Inc. finds that the No. 1 cause of employee burnout is poor leadership and unclear direction from managers, cited by 23 percent of the 9,000-plus respondents, ahead of factors such as work overload or low pay.

Managers who are poorly trained, ineffective and (in some cases) abusive are a drag on a company’s competitiveness in a tight labor market.

“A bad manager can absolutely cause employees to not only become disengaged, but eventually leave the organization,” says Sari Wilde, managing vice president at Gartner, who oversaw a recent study on managerial effectiveness.

The Importance of Being a “Connector”

What are the characteristics of a bad or ineffective manager? Well, he or she tends to badmouth colleagues, play favorites among their direct reports and focuses on proving themselves right above all else, according to a recent survey conducted by The Predictive Index. However, their very worst trait, according to the survey, is a failure to communicate clear expectations–58 percent of respondents cited this as a trait of bad managers.

Another potential issue: a lack of respect from managers to employees. Fifty-four percent of Americans would consider finding a new job if their manager showed a lack of respect for employees in lesser positions, according to a new survey from Harris Poll conducted on behalf of outsourcing firm Yoh. The same survey finds that 40 percent of Americans would consider leaving their job if their manager played favorites.

Behaviors such as these typically occur when managers have been promoted into their jobs without proper training, says Matt Rivera, Yoh’s vice president for marketing and communications.

“What’s happened in the past 10 years is that managers were forced to work with less and, in the process, some things were cut–like managerial training and development,” he says.

Indeed, many managers are burdened with too many responsibilities and not enough resources. HR can unintentionally add to the problem by encouraging managers to be “always-on” coaches, says Wilde.

Despite the trend for managers to serve as coaches to their direct reports, expecting them to provide continuous coaching can exhaust them, she says. A better approach, she says, is to encourage them to be “Connectors.”

Wilde oversaw a Gartner survey that queried 7,000-plus managers and employees and 300 HR executives on managerial effectiveness.

The survey identified four managerial approaches to employee development: Connector, Teacher, Always-On and Cheerleader. The Connector Manager approach is ideal because it’s more focused on assessing the skills, needs and interests of employees than the other approaches, according to Gartner. Managers who use this approach recognize that expertise can lie in other areas of the organization, not just with them, says Wilde.

Connectors are successful because they do three things well, says Wilde. First, they build strong one-on-one connections with their direct reports, which enables them to better understand why, for example, an employee might be disengaged or performing poorly. Second, they build trust with and within the teams they manage, which tends to foster the type of intrateam environment that promotes collaboration and skill sharing. Third, they connect their employees with developmental opportunities within the larger organization, such as matching them with others who may be better equipped to provide coaching and mentorship, says Wilde.

Connectors will often prepare employees to make the most of these connections by advising them on, for example, the right questions to ask, she says.

“These are simple tools that a lot of managers probably don’t use, but they embody the Connector approach,” says Wilde.

Managers in the survey are split fairly evenly between the four different categories, with Connectors making up about a quarter of the population, says Wilde. In the most recent data, Connectors are a bit more likely to be in more senior roles and have longer tenure than other managers, she says.

Many Connectors learned from observing their own managers, says Wilde. “Having a Connector earlier in your career makes it more likely you’ll be one,” she says.

HR can help foster more Connectors by building a Connector organization, she says, where people are encouraged to seek expertise from colleagues and share their own. This can be helped along by tech tools that make it easier to identify and connect with others in the company who have skills and experience in certain areas, says Wilde.

Screening for Culture Fit

Exemplis, a fast-growing company based in Orange County, Calif., is one of the largest office-furniture manufacturers in the U.S. The company has a 4.2 Glassdoor rating.

“We’re very entrepreneurial in spirit,” says Karen Robinson, vice president of human resources.

Four years ago, the company’s leadership sought to define what distinguished Exemplis from other organizations and what sort of managers it wanted to help reinforce that culture. They devised nine core leadership values against which to measure that.

“We’re very competitive–we want people to come in each day ready to hit the ground running, focused on beating the competition and meeting customers’ needs,” says Robinson. At the same time, the internal focus is on creating a team-based, collaborative environment. Managers must be able to embody all of that, she says.

The key to sustaining this culture is to focus on recruiting, says Robinson.

“We look for two key things in our managers: people who are results-driven yet humble,” she says. “The CEO has little tolerance for people with big egos who are non-team players.”

Exemplis has been successful in finding managers who embody this, she says. “We’ve spent a lot of time cultivating our recruitment processes, trying to determine the best way of assessing those qualities in candidates.”

Candidates complete a culture screen before they even get to an assessment of their technical abilities, she says.

“We ask a lot of questions designed to determine whether they’ll be a good cultural fit,” says Robinson. The questions are based on an internally created assessment put together in part by benchmarking companies such as Netflix and Zappos that are well known for assessing candidates via a culture screen, as well as expertise within the HR department.

“We have a lot of expertise in our HR team around IO psychology and assessment,” she says.

Although technical skills are important, HR can’t afford to ignore the other qualities that make good managers, says Robinson.

“When you go to hire leaders, assess them as much for core values and culture as well as their experience and technical skills because those things are very important and it’s a lot easier if people come in with that already,” she says. “Once they’re here, recognize them for embodying those values as much as performance.”

Avoiding Perceptions of Favoritism

For employees, favoritism–or the perception of it–is one of the biggest concerns about managers. Chris Dyer, founder and CEO of background-checking firm PeopleG2 and host of the popular Talent Talk podcast and radio show, says employees often end up convinced their managers are playing favorites. The real problem, he says, is a lack of transparency.

“Every employee wants very much to be heard,” says Dyer. “If a manager can be transparent about certain things–the organization’s standards and goals, rules and processes–and talk about them honestly, openly and on a regular basis, then it will eliminate the perception of favoritism.”

Managers who can clearly explain to employees why they didn’t get a promotion they thought they deserved or the rationale behind certain company policies will be less likely to have employees who disengage–and contemplate exiting–because of perceived favoritism, he says.

“If employees don’t understand the criteria, they’ll make up their own truths,” he says.

Most important is to hire (or promote) the right people into management jobs, says Dyer. There are certain qualities that good managers have–a bit of charisma, a willingness to admit mistakes, transparency–that can prevent problems from cropping up in the first place.

“If someone has those, then I can teach them the rest of what they need to know,” he says.

Mitchell says the most important piece of advice he’d offer is to create a culture that prioritizes employees and their needs. Leaders, he says, must set an example for managers and supervisors to follow.

“When you have leadership that takes a stand in favor of associates, it becomes part of company lore–those become moments that define your culture,” he says.

Andrew R. McIlvaine
Andrew R. McIlvaine is former senior editor with Human Resource Executive®.