Benchmarking study of Australian Management

A reserch project has just been released by the Department of Innovation, Industry, Science and Research benchmarks management practices in Australian manufacturing firms against the global best. The project was undertaken by a research team from the University of Technology Sydney, Macquarie Graduate School of Management and the Society of Knowledge Economics, and is part of a world-wide study led by the London School of Economics, Stanford University and McKinsey & Co. The findings suggest that while some of our firms are as good as any in the world, we still have a substantial ‘tail’ of firms that are mediocre, especially in their approach to people management.

This is a key differentiating factor between Australia and better performing, more innovative countries.

The research also finds that there is a clear link between the quality of management – scored across 18 dimensions of people, performance and operations – and enterprise productivity.

Link to the report

The report finds that the quality of managment has a measurable impact on labour productivity as will as sales and the number of employees in firms.

As a result, a single point increase in the management score – a measurement derived from the 18 management characteristics in our scoring grid – is associated with an increase in output equivalent to a 56% increase in the labour force or a 44% increase in invested capital.

The report goes on to list a number of key findings including:

• Flexible people management is shown to be a key element of successful management, and well-managed firms tend also to exhibit superior innovation capabilities
• High management scores are positively correlated with various measures of success including: sales, productivity, employee numbers and market valuation
• Just as in other countries, Australian management tends to overrate its own performance against the benchmarks
• While the findings relate to manufacturing firms, there are implications also for services-based firms and organisations, which reflect their growing significance in the economy.

It appears from the study that many Australian enterprises are stronger in operations management than people management. While they are able to link employee performance with clearly defined accountability and rewards, they lag in their deployment of advanced people management practices.

These include attracting, developing and retaining talent, and identifying innovative but practical ways of developing human capital to improve performance and add value to organisations. To improve, Australian managers must give more attention to building their people management skills and the relationships within their organisations

The report is worth a look. I'm particularily interested to see that it includes not just the adoption of Lean Manufacturing but also the the rationale for the adoption as two of the 18 management dementions.

The dimentions are grouped into 3 areas.

• Are we good at managing the operations of our business?
• Do we mange business targets proactively?
• Are we good at managing the talent of your people?

How well would the leaders in your business rate?

The LEAN Rt competitive manufacturing program covers these three areas so get in contact if you'd like to talk about us helping you to implement lean manufacturing and lift the management performance in your business.