Magazine article New Zealand Management

Measuring Our Managers: NZIM's Global Research Initiative: Just How Capable Are New Zealand Managers? How Do Our Chief Executives and Managing Directors Rate Their Organisation's Current Management Position? A New Executive Performance Index Reveals the Facts

Magazine article New Zealand Management

Measuring Our Managers: NZIM's Global Research Initiative: Just How Capable Are New Zealand Managers? How Do Our Chief Executives and Managing Directors Rate Their Organisation's Current Management Position? A New Executive Performance Index Reveals the Facts

Article excerpt

The New Zealand Institute of Management has created the NZIM Management Capability Index. In management research terms it is a world first. It could become a global executive performance benchmark with a number of countries already committed to adopting the methodology. And the first set of research findings will be released this month.

The Index suggests that New Zealand managers are performing at only two thirds of their potential. These findings are based on a survey of 403 chief executives and managing directors. So when it comes to measuring Kiwi managers' capability "there is considerable opportunity for improvement", says Doug Matheson, NZIM's immediate past national chairman and architect of the Index.

NZIM has been grappling with the problem of how to proceed with plans to help New Zealand enterprise lift its management performance. Like the Chartered Institute of Management (CIM) in Britain, NZIM believes that improved individual management capability is the best way to lift a country's total economic performance.

The United Kingdom government has bought into this argument and chipped in to help CIM promote British management upskilling. NZIM decided to establish a capability index and create a yardstick against which to measure progress once a local equivalent of the British 'Raising our Game' management skills programme started.

"We need to know where we stand" says Matheson. "It is difficult to make a point without compelling evidence to support the case. This research will also help us identify the best ways forward and simultaneously help organisations identify their management weak spots:"

Until now no other country currently has measured management capability. The United States-based Baldrige Performance Excellence programme is the most used international performance measurement system, but it doesn't measure management practice and competence or management capability. And while organisations such as IMD International and the World Economic Forum survey and rank countries in terms of their economic environment, these surveys do not focus on individual managers.

"NZIM and the American Management Association (AMA) appear to be leaders in surveying management practices and competence but even though we do more than others, no country has regularly surveyed management capability in this way," Matheson adds.

Because this is the first time management capability has been measured there are no trends to consider or compare the findings with. NZIM's Index is based on eight major drivers of management capability. "These drivers deliver profitable business growth, or the equivalent in non-commercial organisations," Matheson explains.

The drivers, and the weightings they are given in compiling the Index include:

1. Visionary and strategic leadership        5%
2. Performance leadership                   10%
3. People leadership                        10%
4. Financial management                     10%
5. Organisation capability                   5%
6. Technology and knowledge                  5%
7. External relations                        5%
8. Innovation--products & services          10%

A ninth collective category, 'results and comparative performance', gets a 30% weighting.

New Zealand managers rank their 'financial management' capability highest at 74.42 on a scale of 100. The 'organisation capability' rates lowest at 62.63.

In descending order after 'financial management' the Index ranks 'external relationships' 72.79; 'performance leadership' 69.11; 'application of technology and knowledge' 67.15; 'visionary and strategic leadership' 65.27; 'people leadership' 64.94; 'innovation--products and services' 63.69; 'results and comparative performance' 63.75 and last 'organisation capability'. These rankings give an overall capability index of 66.23.

"The overall assessment of 'results and comparative performance' is low at 63. …

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