Those Who Manage, Teach

There’s an old saying that those who can, do and those who can’t, teach. But in business, as it turns out, those bosses who can, in terms of generating higher productivity, are in fact teachers.

According to a study by economics researchers from Stanford and the University of Utah, replacing a low-performing boss with a high-performing one boosts productivity by 12 percent, which is better than adding a 10th worker to a nine-person team. The researchers call it the “boss effect,” and they identified it by examining the productivity of workers who change bosses.

“If the worker’s skills don’t really change with the move, then you see that there’s a productivity gain or loss that can be attributed to the change in bosses,” said Kathryn Shaw, a professor of economics at Stanford University and one of the study’s authors.

About two-thirds of the productivity boost workers generate from working with a good boss persists even after they switch to a new boss, according to the study, which examined 23,878 workers matched with 1,940 bosses in a technology-based business over a five year period. The effect on a worker’s output does eventually depreciate, but it can last up to several months, Shaw said.

What Makes a Good Boss?
The differentiator between a poor boss and a good one isn’t necessarily the quality of supervision or ability to motivate. Instead, the researchers say it’s the ability of the boss to teach a worker.

“If he leaves a good boss, we looked to see how long his productivity remains high … and if that productivity gain he gets from working for a good boss is persistent, we believe that’s teaching,” said Shaw, who co-authored the study with Stanford colleague Edward Lazear and Christopher Stanton from the University of Utah.

Shaw said teaching can be a combination of things, such as teaching about a product, instruction and advice on how to work better with customers and peers, or guidance and coaching toward individual career goals and promotion.