Managerial competence is a better predictor of business success than corporate strategy. This is the conclusion of a comprehensive study by Raffaella Sadun, Nicholas Bloom, and John Van Reenen. The three recently authored an article published by the Harvard Business Review entitled, “Why Do We Undervalue Competent Management?”
The authors argue that operational effectiveness is the key to competitive success. The article states, “Managers should certainly dedicate their time to fundamental strategic choices, but they should not suppose that fostering strong managerial practices is below their pay grade. Just as the ability to discern competitive shifts is important to firm performance, so too is the ability to make sure that operational effectiveness is truly part of the organization’s DNA.”
The authors’ conclusions echo the points emphasized in What I did not learn in B-School. Efficient execution of fundamental tasks such as streamlining workflow processes and training employees is key to running a successful company. Successful companies, in turn, boost the national economy. As stated in What I did not learn in B-School, “Great managers improve their team’s productivity, leading to greater company profits and increased employee wages. In this way, improved management practices offer an opportunity to better the quality of life in India and lift the nation’s economy.”
Improved management practices boost employee morale, increase organizational competitiveness, and—when applied across industries—have the power to affect the national economy in a positive way. Corporate strategy is important, but true competitiveness relies on a foundation of strong management practices.