A new study reveals that companies are picking managers in the worst possible way.
The Lede
How do you choose the right people to be in charge? It's a question that businesses have wrestled with for as long as corporate hierarchies have existed. The days of blatant nepotism have been replaced, for the most part, by a system that strives for meritocracy. But what if we're still going about it all wrong? That's the conclusion of a new study published by the National Bureau of Economic Research.
Key Details
- Self-promotion is one of the primary ways companies select managers. However, the study found that the groups in which managers were selected by self-preference performed worse than those in which managers were chosen by lottery.
- Good supervisors have nearly twice as much impact on team performance — which means companies are losing out on productivity by choosing the wrong managers.
- What was much better at predicting good managers measuring one's competence at decision-making?