MIT Sloan Management Review: The Downstream Damage of the Leadership Skills Gap | Burning Glass Technologies

“Companies are struggling with a critical problem — finding managers with the right skills to lead their organizations. This problem not only has damaging downstream effects for businesses, but it’s also hurting the global economy.

An analysis by job market analytics company Burning Glass Technologies found that management skills “represent one of the biggest skills gaps in the job market” and that managers have larger skills gaps than the people they manage. The Bank of England’s chief economist has argued that poor management is the principal cause of the U.K.’s stagnant productivity. Studies indicate that “bad management could be an important factor behind the lower levels of productivity and development of many countries,” according to the International Growth Centre. A major reason is that people commonly advance into managerial positions before acquiring the requisite skill set for effective leadership. Indeed, the Peter Principle in organizational behavior states that employees are promoted to their level of incompetence — and there is evidence that this may actually be true.So what’s happening to the billions of dollars that companies spend on leadership development each year? Managers take plenty of time out of busy schedules to sit in classrooms and attend residential business schools. But these efforts often fail.

And unfortunately, managers often don’t realize that they need to engage in development. Gallup research has found that “most managers believe they are doing their jobs well and don’t see the need for change.”

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