Via Harvard Business Review as linked by Business Insider:
First, according to our criteria, many organizations throughout the world are very badly managed. Well-run companies set stretch targets on productivity and other parameters, base the compensation and promotions they offer on meeting those targets, and constantly measure results—but many firms do none of those things. Second, our indicators of better management and superior performance are strongly correlated with measures such as productivity, return on capital employed, and firm survival. Indeed, a one-point increment in a five-point management score that we created—the equivalent of going from the bottom third to the top third of the group—was associated with 23% greater productivity. (See the exhibit “The Return on Good Management.”) Third, management makes a difference in shaping national performance. Our analysis shows, for example, that variation in management accounts for nearly a quarter of the roughly 30% productivity gap between the U.S. and Europe.
