The signs of a good finance department are when invoices are paid on time, financial reports are on schedule, entries are always correctly posted first time and no-one ends up apologising to the chief executive and the board at the end of the year because the slight surplus they were forecasting has turned out to be a sizeable deficit that nobody saw coming.
When a finance team isn’t performing, failures in these areas are all signs of poor recruitment and lack of good performance management and teamwork – in other words,a failure of line management.
There are reams of research literature illustrating the straight line correlation between poor leadership and people management on the one hand, and lack of productivity on the other. Despite this, many organisations are still not careful enough about who is promoted to management positions. They persist in the belief that if someone has the higher-level technical skills, then the people management stuff will just follow on naturally. I still see job descriptions for managers that set out pages of technical and operational duties and have one line about managing people.
In reality, the quality of any service is absolutely all about how good the manager is at managing people. Even the most naturally self-motivated people begin to struggle when they are managed by somebody who just “lets them get on with it”, with no quality time spent tracking their goals, giving them constructive feedback and supporting the development of their skills.
Generally these good people move on, leaving their space to be filled on a hit-and-miss basis by the manager, who puts as little thought and time into good recruitment as they do the rest of their line management responsibilities.
Where an organisation – or a department – is getting this right, the following will lie behind that:
- There are no automatic promotions to line management positions. All external and internal appointments are made via an in-depth selection process which fully tests people’s willingness and ability to positively manage and motivate others. One of the things we do at St Mungo’s is use a role-play test at interviews to see if candidates can have a difficult conversation with someone without being either too soft and flaky or too intimidating and disempowering.
- The organisation sets clear written standards for managers’ performance against their people management responsibilities.
- There are robust and non-negotiable processes for managing staff performance and development, including appraisals and supervision.
- Managers are properly trained to do all the things required of them: being an authentic and inspiring leader; recruiting and selecting the best people; setting goals, giving feedback and supporting high performance and personal development; delegation and coaching skills; building teams and managing conflict; dealing with sickness and other attendance issues; managing disciplinary and capability issues; managing change.
- Managers are held accountable for their people management performance through 360-degree feedback into appraisals from those they manage.
Of course there is cost to this, particularly the training aspect. If there has been no leadership and management programme for the charity before, then everyone needs to participate.
It’s a mistake to omit more senior managers who say they don’t need to do it – this is about developing a shared ethos and capability around management. You’ll also need to budget for new managers to access training as they join.
Over time, this approach pays for itself many times over: lower staff turnover and sickness; higher levels of performance and greater efficiency; much higher beneficiary satisfaction levels; and cost-effective succession as staff grow their skills under good line managers and develop their potential for promotion.
It remains a truism that more people leave their bosses than leave their jobs – don’t be one of those bosses!