In times of crisis, employees look to their leaders for direction, reassurance, and a plan for moving forward into and through the unknown. The economic downturn that began in 2021 and its resulting fallout was no different. The change ushered in a confusing and complex business world for which most were unprepared. Little did we know we'd be digging out of that hole for some time.
Overnight, teams were dispersed, disruption was happening across industries, and transformation needs were taking shape. Leaders needed to get their people on board — and fast. In a matter of mere months, the management pendulum swung away from inclusivity and empathy toward a necessary crisis management response. It may have felt practical at the time to deal with uncertainty, but did it do your employees (and business) more harm than good?
Research shows that companies perform better when leaders empower, encourage, and coach employees instead of delivering orders and micromanaging. However, in the past few years, directive, top-down leadership approaches have remained popular in the push for profitability and efficiency. This management style certainly may have helped organizations get on steadier footing amid the tumult of the last couple of years, but will it prepare employees for the change that's still yet to come?
Our data say no. Since 2020, employee mindsets that are vital for innovation, productivity, and performance have all been in decline, and there is nothing to suggest they'll improve without changing course.
Mindsets and behaviors that drive performance in decline
Yet still, frontline managers may feel hesitant to let their guard down and keep orders flowing, as there is a genuine need to help their leaders deliver more shareholder value/EPS, and manage employee burnout and attrition – all while ensuring their teams are as productive as ever. After all, managers are a make or break factor in business performance.
Unfortunately, in the directive leadership environment we've observed, frontline employees lack the autonomy and authority to make decisions. This constrains people and eliminates the trust needed to innovate and navigate uncertainty.
As a result, employees in these environments are stuck in a skill-building inertia where they learn more about how to exist in a crisis management status quo, focused on doing whatever it takes to stay afloat. If you're navigating a complex business transformation or warding off disruption, you need your managers to help people do more than float. They need to learn how to respond (not just react), build resilience to adapt, and hone the agility to innovate and overcome whatever comes their way. That starts with managers who are more proactive and can anticipate when change is on the horizon.
In our inaugural issue of the BetterUp Briefing, we wanted to explore what it takes to be an effective manager in the face of so much change and uncertainty. Over the past year, we've studied 17,000 frontline managers and observed an emerging leadership profile driving higher business performance, revenue, and team performance.
We found that managers who can strengthen their coaching and problem solving skills, be more authentic with their teams, and work to recognize employee contributions are riding a wave of effectiveness to the bank: Their organizations experience a +400% return on assets, +30% EPS 5-year growth, +17% boost in innovation, and more.
Managers are connectors
It’s business canon now that frontline managers are responsible for most of the day-to-day impact across your organization. Managers are the conduit for change — the gatekeepers of information cascading, the alchemists between strategy and tactics, and the translators between the highest levels of decision-making and its meaning for individuals.
Manager effectiveness remains a top priority of investment among HR leaders, yet there is a sober acknowledgment that their organization’s development approach does not prepare managers for today’s workplace realities. The cost of manager ineffectiveness alone can have disastrous effects on day-to-day operations, with the least effective managers having three to four times as many employees in the “quiet quitting” category versus the most effective.
While it may be true that the skills that define effective managers are changing fast, strengthening their mindsets and capabilities will make the difference long-term for whether they can help their people adapt, be agile, resilient, and innovate. Even as the fallout from the pandemic is receding, new challenges and even more uncertainty await your workforce, be it continuous rapid change, acceleration in AI, return to office mandates, or a possible recession.
There are many ways to interpret whether a manager is effective, but in our latest research we define them by team performance since positive team outcomes are strongly linked to overall business performance.
We tracked these skills and behaviors of 13,000+ managers from the start of the pandemic to now and found that distinct skills have grown in importance relative to team performance in the last 3-4 years. Specifically, a manager's coaching skills' impact on team performance increased 157% pre- to post-covid, recognition increased 141.2%, authenticity increased 124%, and problem solving increased 121%.
Looking at this another way, pre-covid a manager’s coaching skills ranked #9 out of 15 on the items we measure that positively impact team performance. Post-covid, coaching skills are now ranked #2. Recognition made moves as well, going from #15 on our scale to #12, authenticity went from #13 to #8, and problem solving went from #11 to #3.
While we did not observe as much movement over the past few years in other vital manager skills such as strategic planning, focus, and alignment, they still matter for manager effectiveness and team performance since they help leaders articulate goals and set corresponding focus for their direct reports.
However, the four skills below have rapidly emerged as vital for team performance in the uncertainty of recent years because they are critical to motivation, inspiration, and helping team members become more effective themselves. Let’s take a closer look at what managers need to focus more on now to get higher team performance:
- Coaching skills - Being a “manager coach” means your leaders take an approach to communication and relationships where questions are asked instead of answers provided, support is offered without judgment, and development is facilitated rather than dictated or commanded.
- Recognition - Managers who make efforts to recognize others for their work and support their growth help promote a more inclusive workplace. This individualized recognition and support let other employees know that the skills and experiences they’ve contributed and the risks they’ve taken are seen and valued, which helps elevate their sense of personal accomplishment and belonging.
- Authenticity - Authenticity means showing up with empathy and respect, which engenders trust, psychological safety, and belonging. And these are all needed to create an environment for innovative, risk-taking teams that perform at much higher levels.
- Problem Solving - As things continually change, it’s vital that today’s managers know how to offer perspectives to help their teams with blockers, find creative ways to overcome challenges, and think outside conventional boundaries when faced with new problems.
What is the impact on organizations, teams, and individuals when managers rank highly for these four capabilities?
Shifting manager mindsets to win
What does behavioral science have to say about why these capabilities are so endemic to effectiveness? Let’s dive a little deeper into each one.
1. Acts as a “manager coach”
It’s time for organizations to fully embrace the idea of managers as coaches. Because of the changed nature of work, organizations need managers who can model behaviors and provide ongoing guidance as team members face a series of novel problems, tasks, and situations every day. Teams often rise and fall on a manager’s approach. Using a coaching leadership style helps empower employees to question, learn, challenge, and grow.
As roles, jobs to be done, organizational context, and the world change, organizations with managers with solid coaching skills can absorb and productively move forward. That is because the foundation is set up to handle change and new demands and maximize each person's contribution to the organization by developing their confidence and capabilities while also empowering and supporting.
Manager coaches provide a clear mission and encourage creativity and innovation when it comes to problem solving. They also inspire a growth mindset, helping individuals feel capable of conquering challenges and reaching for lofty goals, which is vital in times of uncertainty. And a leader who acts as a coach creates a psychologically safe space for employees to share their ideas, experiences, and concerns, which are all crucial elements of promoting belonging and inclusion.
What does this look like in action?
Manager coaching could look like a leader nottelling a direct report what to do or evaluating whether they’ve done what was expected, but rather helping them make sense of and reflect on their performance as well as their strengths, values, and aspirations within the context of the organization and its objectives.
Behaviors that strengthen your managers’ coaching skills:
- Guides others on specific ways they can individually learn and grow
- Asks team members questions that lead them to personal insights
- Helps team members set goals related to their job performance
- Makes introductions to help broaden the range of opportunities for their team members
- Presents new projects or tasks to the team as learning opportunities
- Uses thoughtful questions to help team members solve problems.
- Encourages their team to reflect on their strengths and weaknesses for self-awareness and future performance.
2. Makes recognition a priority
Managers who make a habit of recognizing their direct reports for their work and support their growth help promote a more inclusive workplace. This individualized recognition and support let other employees know that the skills and experiences they’ve contributed and the risks they’ve taken are seen and valued, which helps elevate their sense of personal accomplishment, autonomy, and belonging.
To help prevent the “us vs. them” mentality (especially in remote/hybrid workforce), managers must also foster a healthy participatory culture. When they solicit participation and recognition from across their teams, it makes it easier for employees to engage with others, feel more included, gain confidence to share, and push themselves.
Behaviors that strengthen your managers’ recognition skills:
- Compliments others not just on finished products but works in progress
- Is timely with positive feedback
- Surfaces the accomplishments of others to higher levels of leadership
- Regularly recognizes the contributions of others
- Finds ways to compliment individual team members for progress on tasks
- Praises effective performance on-the spot
- Points out the accomplishments of individual team members to higher management
3. Leans into authenticity
There may be a debate around what it means to bring your whole self to work these days, but at its core, doing so is just the extent to which your managers build and nurture trust through open and honest communication and create a psychologically safe space where their direct reports can be themselves, explore ideas, take risks, and innovate without fear of repercussion.
When managers approach work authentically and "show up" in their relationships in the workplace, their peers and direct reports feel a greater sense of social inclusion and cohesion. This is vital because self-worth is inherently tied to signals from our environment. So, our social ties and connections depend on how well we perform, how accepted we are in social groups, and how welcomed and appreciated we feel within our communities.
For managers, especially, being authentic under such conditions can be challenging, but bringing a sense of openness to their relationships is necessary.
Behaviors that strengthen your managers’ authenticity skills:
- Knowing their values, and sharing them
- Being trustworthy
- Not taking things too personally
- Having boundaries and saying no when needed
- Being ethical and transparent
- Being authentic in their interactions with others
- Expressing their true feelings to others
- Opening up to people
- Allowing people to know the “real them”
4. Improves problem solving abilities
To be effective at strategic planning in today’s unpredictable business environment relies on mastering two key components: alignment and strategic planning.
Strategic planning is vital, especially for new managers, because it creates a shared roadmap to the future for all team members, helps anticipate blockers, and develops contingencies. In fact, leaders high in strategic planning have direct reports which say their teams can handle change and be agile — 14X more than teams without a leader with this skill.
Alignment is the bridge between your organization’s strategy and how you execute day-to-day to achieve its goals. But in today’s hybrid work environment of distributed teams, a manager’s inability to align their team’s work and provide clarity can negatively impact employee engagement and performance. Sixty-one percent of workers say their organizations fail to bridge the gap between establishing a strategy and actually taking action to implement it day to day.
When managers align individual efforts and processes to create clarity and a shared vision and purpose, they create a cohesive, driven, well-guided team equipped to achieve organizational goals. Several studies found that employees who feel directly aligned with their company’s purpose are 3X less likely to seek a new job and have increased performance.
Behaviors that strengthen your managers’ problem solving skills:
- Provides a creative perspective to help the group problem solve
- Is good at finding creative ways to help their team solve problems
- Thinks outside conventional boundaries when solving problems
- Draws on the diverse perspectives of their team to identify problems and generate possible solutions
How to help your managers be more effective
Over the last ten years, we’ve gained incredible ground in understanding human behavior and deep insight into how people learn, grow, and change. Thanks to behavioral science, psychology, and neuroscience advancements, we better understand the inputs that foster real, long-term change by uncovering what is vital and detrimental to us in our personal and professional lives.
One key area for leaders to focus on is exploring the manager development status quo. While training can help new managers learn the technical skills they need to succeed, social-emotional skills are harder to develop in a one-time workshop. Studies show we can lose up to 75% of new information if we don't apply it within six days. But opportunities to practice and refine these leadership behaviors are highly situational and require ongoing accountability, feedback, and guidance to develop.
Developing social and emotional skills and capabilities like coaching, recognition, problem solving, and authenticity must be incorporated into your organization's DNA. That means leaning into a culture shift where risk taking and positive behavior are rewarded, where leaders model behaviors, and building a supportive environment where managers feel empowered to practice new learnings.
All this takes time, commitment, and dedication from you and your people, but the data paints a clear picture: it’s worth it.
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