Axiom: People join companies, but leave managers

I’ve had reason to use this phrase a few times recently, but it occurred to me that I didn’t really know where it had come from.

Like many axioms it feels correct, but does it really work out in practice? More specifically; does it work out in practice today?

In 2013 and the age of the Free Agent Nation what does it mean to leave a manager, or perhaps more interesting, what does it mean to join a company?

Doing a bit of research in this area it looks like the phrase became popular from 1998/99 on the basis of an article published by Gallup and the popular management book First, Break All the Rules by Marcus Buckingham and Curt W. Coffman.

The Gallup article is titled: How Managers Trump Companies – People join companies, but leave managers

It concludes like this:

An employee may join Disney or GE or Timer Warner because she is lured by their generous benefits package and their reputation for valuing employees. But it is her relationship with her immediate manager that will determine how long she stays and how productive she is while she is there. Michael Eisner, Jack Welch, Gerald Levin, and all the goodwill in the world can only do so much. In the end, these questions tell us that, from the employee’s perspective, managers trump companies.

The book – First, Break All the Rules – is still a very popular management book and has been used as a source of training in all sorts of organisation.

The basis of the book is a lot of research undertaken by Gallup through their world-renowned ability to find information through surveys. It’s this book that is the basis for the Gallup Q12 approach which utilises 12 questions to ascertain the level of employee engagement and from that the organisation’s performance.

In the book it states “the manager – not pay, benefits, perks or a charismatic corporate leader – was the critical player in building a strong workplace.” Which doesn’t quite roll off the tongue like people join companies, but leave managers but it makes the same point.

The fundamental point is that managers can make or break your organisation.

Has the world moved on since 1998/9 when the book and article were written?

On one side of the equation it looks like things haven’t changed much at all. According to Gallup, the findings still hold true for the organisation that they work with. The last set of research published in 2012 states that the correlation between engaged employees and productive workplaces continues. If that correlation is true then people will choose to stay at organisations where they are engaged in meaningful work by good managers.

There’s another side to the equation, though, are people still joining companies? Do people still want to be employees?

In the UK, at least, there’s been quite a shift in employment. The following chart comes from a Department for Business Innovation and Skills report Business Population Estimates for the UK and Regions 2012:

This chart, and the report, show that the number of sole-traders and self-employed businesses (shown as businesses without employees) has massively grown over the last 10 years while larger businesses (business with 250 or more employees) are down significantly. These businesses with no employees now account for nearly 75% of all businesses and provide employment for nearly four million people. While 9.8 million people work in companies of larger than 250 employees, over 14 million work in no employee, small and medium-sized businesses (there’s also millions more people employed in the public sector).

So while it can be said, with a reasonable level of confidence, that people leave companies because of poor management, it’s no longer clear that people choose to join companies in anything like the volume that they used to.

So I think I’ll keep using this axiom, but it looks like it’s going to get less relevant as the make-up of the workforce changes.