in Innovation

Better management at younger, more competitive, freer companies

Management Practices across Firms & Nations is a survey of management practices in over 700 firms in France, Germany, the UK and the US with interesting results and implications for innovation capabilities…

…We also find a surprisingly large dispersion of management practices across firms with a long ‘tail’ of poorly managed firms. This presents a dilemma – why do so many firms continue to exist while apparently deploying inferior management practices? Our analysis suggests that this is due, in part, to a combination of: (i) competition, with tougher product market competition fostering better management practices; (ii) firm age, with younger market entrants utilising better management techniques; and (iii) regulation, with stronger labour market regulation apparently inhibiting the deployment of best practice management.

  1. That is an amazing set of findings. I am not surprised by the labor market or by the competition findings, but as a young-ish manager I have always assumed that older managers had better management techniques gleaned through years of experience and training. Unfortunately, I have never actually MET these managers, which I chalked up to the fact that I always have worked in smaller software companies.

    What does this say about our confirmation bias when it comes to management? Without prior confirmation of our management techniques, we will rely on outside experts… but WITH prior confirmation (or at least non-nullification) of perhaps poor techniques, we can become dangerous to our companies and actually destroy value.

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