Managerial Capabilities Assessment

When new leadership takes over a company, particularly following an acquisition, the incoming CEO and executive team need to rapidly assess the organization's managerial capabilities to discover internal problems and opportunities both at the level of individual managers and managerial culture, habits, and processes.

I have worked on such projects in the quality of an external consultant brought in to help with the task, and here are some tips and tricks I’ve learned along the way.

First of all, what are Managerial Capabilities, and why are they important?

The term “Managerial Capabilities” refers to an organization’s ability to maximize employee effectiveness by developing internal talent, providing clear guidance, sustaining engagement and motivation, and effectively addressing underperformance. A Managerial Capabilities Assessment focuses on whether managers have the required competencies and whether the managerial culture and benchmarks across the organization are conducive to excellence or mediocrity. Its output is a set of recommendations on how to increase managerial capabilities by acting on both individuals and culture.

Managerial Capabilities are of paramount importance, for even a company with a perfect strategy and great product-market fit might only realize part of its potential if its employees are poorly managed. Similarly, even in more mature markets, how well managers run operations and develop talent is often the difference between survival and death, or between barely making it and becoming highly profitable.

After a change in top management, it is often tempting to focus on strategic efforts rather than on improving internal managerial capabilities, as everyone is busy and under the impression that there is not enough time to do both. But why is there so little time, and why do things take so long? Often, the reason is insufficient Managerial Capabilities, and improving them might actually be the fastest way to help achieve other strategic goals.

How do you measure Managerial Capabilities?

It is paramount to avoid using methods that scale, such as surveys or large data collection, for they are unreliable and suffer from the same blind spots you’re trying to uncover. For example, a common reason some team meetings are run poorly is that the people involved do not know what a well-run meeting looks like. In that case, a survey that asks how well meetings are run might collect positive feedback even in teams whose meetings have a large opportunity for improvement. A second reason that surveys are not very effective is that, when they surface problems, they do not reveal their root cause, with the risk that the findings are misinterpreted and the wrong solution selected.

A much better tool to measure Managerial Capabilities is to run a series of short one-on-one interviews with people at all levels of the organization: a few top managers, a few middle managers, a few line supervisors, and a few line employees. Only in a one-on-one setting can a competent interviewer dig deep enough to uncover root causes and receive honest answers with full context.

The main reason companies often prefer surveys to interviews is that the former are perceived as more time- and cost-efficient, and more comprehensive. But this is often not the case. Running a company-wide survey takes time to prepare, run, and collect the results, and requires the involvement of many people across the organization. It is faster and cheaper to task a single expert (such as myself) to run a few interviews with a few top managers, middle managers, supervisors, and line employees. Moreover, expert interviews can dig far deeper than a survey ever can, providing a more accurate assessment of root causes and thus becoming a more reliable base on which to take action.

Another reason companies often prefer surveys is that they are the only realistic way to achieve full coverage of the whole organization. However, this is often unnecessary. It only takes a few interviews for an expert to have a good idea of the most significant problems and opportunities affecting the organization. He might not discover all the problems affecting all locations of the company, but neither can a survey, because the most important problems and opportunities require digging deeper than a superficial survey could.

In addition to one-on-one interviews, a competent Managerial Capabilities Assessment Expert would also spend a bit of time attending internal meetings to see how they are run. Do progress update meetings help derisk projects? Do Monday Morning team meetings help attendees have a clearer idea of what to work on during the week? Are problems surfaced or hidden under the rug? Is everyone’s time used effectively? These are questions that can only be answered by observing such meetings directly.

What to look for during one-on-one interviews

First, a few things to keep in mind while planning the interviews:

Dig deep, not broadly. You don’t have to schedule many interviews (a solid starting point for a company of, say, a few thousand employees is 3-5 top managers, 3-5 middle managers, 3-5 supervisors, and 3-5 employees; three days should suffice), and you do not have to cover everything in each interview, but you do have to dig deep. Uncovering a single problem and understanding exactly what is going on is much better than uncovering ten problems superficially – the latter gives a larger impression of progress, but the change initiatives it sparks are less likely to be effective, whereas solving a single problem well often leads to many indirect improvements.
Discuss what does happen instead of what should happen. For example, do not discuss processes but what people do; and do not discuss theoretical organizational structure, but instead discuss actual interactions.
Focus on habits over people. Of course, during the interviews, it is important to uncover particularly dysfunctional people in the organization who should be terminated or particularly talented ones who should be given more responsibilities. That said, an excessive focus on individuals has limited effectiveness beyond these low-hanging fruits. Instead, a competent interviewer should surface not only people-related problems and opportunities, but also culture-related and process-related ones (and the latter should relate not only to product-related processes but also to how meetings are run and people are managed).
The point of these interviews is not to catch anyone wrong but rather to uncover structural problems and opportunities. The interviewer’s attitude should be collaborative instead of adversarial to reflect that.
During each interview, indirectly collect information about the layers above and below the interviewee. Do not ask about their boss directly, or at least do not rely on their answers in this regard, for they might be tainted by social considerations. Instead, use the interviewee’s answers about their own job to infer whether their manager provides them with enough clarity and whether they provide enough clarity to their subordinates (if applicable).

That said, here is a non-exhaustive list of some of the things a competent Managerial Capabilities Assessment Expert would look for during one-on-one interviews with managers, supervisors, and line employees.

Can they explain what doing their job well looks like? (Depending on their role, probe whether they are able to explain this for their own job and/or their subordinates.)
Can they explain who is impacted by them doing their job well, and do their eyes light up as they do so?
What tasks within their team seem to take unnecessarily long?
What does their boss not know that they should know about?
What do they wish their team understood that they do not understand yet?
When there is more to do than time to do it, how do they prioritize?
What was the last problem they escalated, and what happened as a result?
If they were in charge of their department, what changes would they make?

Of course, this list is non-exhaustive, and the interviewer should adapt what they ask on the fly based on the information uncovered so far and following the principle of “dig deep, not broad.”

Experience, experience, experience

It would seem that running the one-on-one interviews only requires good interviewing skills. However, an interviewer who is competent at interviewing but lacks direct management experience might not be able to spot mediocrity. For example, it is easy to notice a complete lack of clarity, but is the interviewer able to assess when a response merely indicates superficial clarity or a deep one? Similarly, is the interviewer able to assess whether Monday Morning meetings are run not merely well but also greatly (and do they know what it would take to transition to the latter?)

Hence, it is important to ensure that the interviewers have a good benchmark for what great management looks like and are able to dig beyond the surface.