Have a bad manager? Science explains why.

0:01NPR.

0:06Sierra Juarez:The entire world of work can basically be divided into two kinds of people, the managers and the managed. And those of us who've spent our days toiling in the managed class have probably experienced our share of bad managers. I think a lot of people secretly feel like their managers are sort of extraneous to what they do. Well, often they are. I mean, just because management is necessary doesn't mean that everyone who's doing it is doing it well. David Deming is a labor economist and dean at Harvard College. The reason why you say management can feel so bad sometimes is because bad coordination feels wasteful because it is wasteful.

0:40Sierra Juarez:Would you say you're a good manager? You know, it's funny. I would say that I'm average to below average manager unconditionally. I think I've worked hard to become average. David has also been working hard to understand what makes a good manager. Like, are there specific traits that can be measured in a scientific way that actually predict who will be a good manager? And in a study published earlier this year, David and his colleagues found the answer is yes, there are. And they aren't what you might think. This is The Indicator from Planet Money. I'm Adrian Ma. I'm Ricky Mulvey. How do you identify a good manager?

1:14Sierra Juarez:With science. That's after the break. Science. Science. This message comes from Mint Mobile. If you're tired of spending hundreds on big wireless bills, bogus fees, and free perks, Mint Mobile is for you. Shop plans at mintmobile.com slash switch. Taxes and fees extra. See Mint Mobile for details. This message comes from Edward Jones, where they believe rich means opening yourself to new possibilities. That's why your dedicated financial advisor meets you where you are, helping you move forward with confidence. Let's find your rich. Edward Jones, member SIPC.

2:25Sierra Juarez:For businesses, managers can mean the difference between profit and loss. And for employees, a manager can make work a great place to be or a terrible one. That's why there's that saying that people don't leave bad jobs, they leave bad managers. Yeah, and for all that's at stake, David Deming argues that a lot of companies really are not that great at picking managers. When a firm has a manager role to fill, David says they usually default to a couple different approaches. They might promote someone who is a good frontline worker. The people who are good on the first rung of the ladder, who are good individual contributors, automatically get thought of as management material.

3:03Sierra Juarez:The problem with that is that people who are great individual workers aren't always the best at running teams. Another way companies try to identify good managers is through interviews. But David says this is full of problems. The job interview is a pretty terrible technology for figuring out what people can do. You know, it's like we sit here, we talk, I ask you a few stock questions about, you know, tell me about a time when, and people kind of know what to expect. That's probably a bad way of figuring out whether somebody's good at anything, including management. Because I think it loads too heavily on, do I like this person, and is this person the kind of person that feels to me like a manager?

3:38So it introduces bias? It could introduce gender bias, it could introduce, you know, all kinds of biases. but it also is just a bad measure. If you and I bond at the end of the meeting over whether we like to play tennis at the same club, that might make me even unconsciously think of you as a better manager because you're more like me and I think I'm a good manager and so you should be like me, you know? And so there's all kinds of like mood, you know, kind of affiliation sense that people get that I think tricks them.

4:02Sierra Juarez:When you think about it, a lot of hiring and promotion is just going on vibes. So is there a less squishy, more objective way to try and identify people who could be good managers? That was the question David and his colleagues set out to answer with an experiment. So they started by recruiting a few hundred people and having them take a series of tests, which were designed to assess three types of skills. Economic decision-making, emotional intelligence, and fluid intelligence, which is just a fancy word for creative problem-solving skills. And after these skills assessments, participants were divided into three-person teams, with half of the teams being randomly assigned.

4:43We said, okay, there's three people coming in. We randomly assigned you. You two, you're the workers. You, you get to be the manager.

4:47Sierra Juarez:For the other half of the teams, participants were actually given a choice. They were asked on a scale of one to 10, how much do you want to be the manager? The person who gave the highest answer, the one who most wanted to be a manager, got to be the manager. Then all the teams were given a variety of puzzles and problems to solve. The manager was in charge of delegating tasks and motivating the workers. So it's like, you know, Adrian, I need you to pull your weight here. Thank you.

6:00I make you the manager of four or five different teams, and you are always making the team worse, or you're always making it better.

6:06Sierra Juarez:So, reveal time. Which traits ended up being the most predictive of managerial performance. For instance, did the people who were most eager to lead make good managers? Turns out, nope. On average, self-promoted managers did worse than managers who were randomly assigned. You know, Ricky, I think it was Plato who said that people who really want power are not fit to wield it. I think that makes a lot of sense. Me and Plato, We're on the same wavelength. What can I say? Maybe you're hearing this and thinking about every bad manager you've ever had. And congratulations. Now you have some scientific data to back it up.

6:46Sierra Juarez:What's going on here, David says, is a classic case of toxic overconfidence. We found that the people who really wanted to be managers were much more likely to overestimate their own abilities. So they thought they were better at the individual tasks than they were. And they thought they were better at management than they were. And so they were just overconfident. You know, there's people who are more likely to say at 9, 10, I definitely want to be a manager, just think they're better than they really are. They also tended to be men. So, you know, make of that what you will. These self-selected managers also tended to score lower on a test of emotional perceptiveness.

7:18Sierra Juarez:Basically, how good they were at reading other people's emotions. So, what traits made for good managers? You know, the ones who made every team they were on better. Well, it wasn't a participant's age or their gender, education, or work experience. It wasn't their confidence or their personality. The best predictor of a high-performing manager was a high score on their initial tests of economic decision-making and fluid intelligence. Which makes sense because basically it's saying they were good at deciding how to allocate resources and creative problem-solving. Now, of course it's one thing to find these results in a lab experiment, But David wanted to test this idea in the real world.

7:58Sierra Juarez:So he reached out to a large South American grocery store chain, which gave its store managers the same tests. And we found, yes, that basically people who score higher on our management test, when they move to a different store, that store's sales and profits go up. Really good managers were better at keeping checkout lines moving and making sure they didn't run out of certain items. They also increased sales by about 5 % per month, which he figures adds about$200 ,000 a year to a store's bottom line. David's study, by the way, was published in the Quarterly Journal of Economics. And he says the big takeaway is that you can predict who will likely be a good manager based on measurable traits that are often overlooked.

8:41Having a disciplined and careful way of selecting managers in your organization really matters. Like if all you're doing is picking the people who always raise their hand for opportunities, you're not necessarily getting the best people. In fact, you may be getting worse people than average. And also there are a lot of people who are totally happy to stay in their lane and be an individual contributor, but might actually be a good manager if given the chance. So reading eagerness to serve as a signal of skill is a mistake.

9:07Sierra Juarez:Does this mean companies should start giving like a manager version of the SAT? I was just imagining a world where the next time that I go to seek a promotion, I'm given a test to like identify which shapes don't belong in a pattern or something. I might feel kind of insulted. I'm like, wait, I'm trying to do this job and you're like showing me triangles. Like I don't know. So that's why. Yeah, no, you're right. And that's why we gave the IQ test almost like a like something to compare our other tests to. Like I don't actually think that employers should be giving IQ tests. I mean, I think you can do better.

9:40I would give a test that's more related to the thing you have to do.

9:43Sierra Juarez:Okay. And what about the emotional intelligence? Like, would you support that? I would, but that's for a different reason, which is I think that emotional intelligence, what I would call social skills, like ability to work well on a team and work with others, is the most underpriced skill in the entire world, basically. I think it really matters for being a good worker, being a good manager, being a good leader, being a good person. So, Ricky, have you ever had any bad managers? So before we started recording, I said I've never had a bad manager. But then I realized that I just had a trauma compartment of my brain that I didn't want to revisit.

10:19Sierra Juarez:You've repressed the one bad manager in your whole work history. This episode was produced by Cooper Katz McKim and engineered by Jimmy Keely. It was fact-checked by Sierra Juarez. Kickin' Cannon is our editor and the indicators are production of NPR. This message comes from Capella University. That spark you feel? That's your drive for more. Capella University's FlexPath Learning Format lets you earn your degree at your pace, without putting life on pause. Learn more at capella.edu. This message comes from Mint Mobile. If you're tired of spending hundreds on big wireless bills, bogus fees, and free perks, Mint Mobile is for you.

10:58Shop plans at mintmobile.com slash switch. Taxes and fees extra. See Mint Mobile for details.