Magazine article New Zealand Management

Future Indicators: Research Starts on Next Capability Index: The New Zealand Institute of Management Has Long Believed That Individual Management Performance Is a Major Factor When It Comes to Influencing the Nation's Economic Performance. That Is Why It Created the NZIM Management Capability Index. It Is Time to Update

Magazine article New Zealand Management

Future Indicators: Research Starts on Next Capability Index: The New Zealand Institute of Management Has Long Believed That Individual Management Performance Is a Major Factor When It Comes to Influencing the Nation's Economic Performance. That Is Why It Created the NZIM Management Capability Index. It Is Time to Update

Article excerpt

When the national debate escalated as the nation's economic fortunes fell, at least in terms of our sliding OECD performance ranking, the New Zealand Institute of Management made a strategic decision to act and find out more about the management capability of its members and New Zealand managers in general. The NZIM Management Capability Index (MCI), released for the first time at the end of last year, was the outcome of that action.

Now, NZIM is back in the market collecting data from managers around the country to compile the Index for a second year. The process will be the first measure of progress or slippage against changes over the past 12 months, allowing us to build a database and to start tracking trends that will provide invaluable indicators for the future.

NZIM developed the Index because, quite frankly, we did not know much about the long-term effectiveness of New Zealand's training and development programmes and how they contribute to raising management competency levels.

The problem at the outset was just how to define capability and, in particular management capability. The Concise Oxford Dictionary defines capability as: "ability, power--the condition of being capable; an undeveloped or unused faculty". In another context, it refers to it as an ability to undertake specific tasks and operations. The problem, therefore, was to agree on how we could measure capability if we could not satisfactorily define it. Some researchers have defined management capability as the skills, knowledge and personal attributes required by a manager to effectively perform the functions associated with management in a workplace situation.

Key practices

NZIM decided that management capability was demonstrated in business and/or organisation performance and was the result of management leadership and competence in the key management practices that lead to sustainable business performance and business growth. The measurement of management capability must therefore link the application of management skills and abilities (management practice and competencies) to the results achieved and which reflect performance.

As far as we know, no other country yet attempts to measure management capability. But they are interested in doing so and that interest has us talking with other management organisations in America, Australia and a number of Asia/Pacific countries.

The primary value of the NZIM MCI for any enterprise that takes part in the evaluation process is firstly in identifying where improvements can be made, and then comparing those results or trends against other organisations, both in New Zealand and internationally. Improving management capability, and through that the performance of the organisation must, ultimately, result in the organisation achieving its true potential.

Since release of the Index, the Government has moved to look more deeply at the issue of management capability and development. It allocated funding in the Budget through the Ministry of Economic Development to improve understanding and support action in the private and public sectors to improve management capability, particularly among the nation's many small to medium sized enterprises. The funding will be used, in part, for research to develop indicators to assess capability over the longer term including the types and quantity of management skills businesses need.

Government support

The Minister of Economic Development, Jim Anderton, recently said in an article written for an NZIM newsletter, that to become a higher value economy New Zealand needs a well-educated and adaptable workforce. …

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