Why Most New Managers Fail – And How to Be Among Those Who Succeed

Introduction

The transition to management represents one of the most challenging career moves professionals face today. Understanding why new managers fail is crucial, especially considering that, according to CEB Global research reported by Arruda in 2023, 60% of new managers fail within their first 24 months. When transitioning leaders struggle, their direct reports perform 15% worse on average than teams led by high-performing managers, and they're 20% more likely to leave or become disengaged, according to Gartner consulting firm.

However, there's encouraging news. Research from the US National Bureau of Economic Research (NBER) released in July 2024 shows that good managers can have almost twice the impact on a team's productivity compared to a top-performing individual (Weidmann et al, 2024). The question isn't whether good management matters—it's how to develop the right skills to succeed.

Understanding Why New Managers Fail: The Science of Management Success

Why Traditional Management Selection Fails

Recent research from the NBER reveals several critical flaws in how organizations typically select managers, shedding light on why new managers fail:

1. The Peter Principle Problem: Companies often promote based on performance in non-management roles, even though these skills don't necessarily translate to management success (Weidmann et al, 2024).
2. Self-Promotion Pitfall: Harvard Skills Lab research demonstrates that companies would achieve better results choosing managers randomly than selecting those who most actively seek management roles. Self-promoted managers often perform worse due to overconfidence, particularly about their social skills (Weidmann et al, 2024).
3. Time Management Challenges: Middle managers spend 35% of their time in meetings, while upper managers spend 50% of their time in meetings (Kaplan, 2017).

The Impact of Effective Management

The research quantifies the real value of good management:

• According to the Australian HR Institute, just 14% of employers are prioritizing training spend for management and leadership programs in 2024, despite clear evidence of its importance (Black, 2024).
• NBER research shows that managers who excel at economic decision-making improve team performance by 0.7 standard deviations compared to those selected through self-promotion (Weidmann et al, 2024).
• Teams with optimal initial task assignments score 0.52 standard deviations higher than those without (Weidmann et al, 2024).

Key Skills to Prevent Why New Managers Fail

1. Economic Decision-Making and Resource Allocation

Harvard Skills Lab research identifies economic decision-making as the strongest predictor of management success, addressing a key factor in why new managers fail. The NBER study found that selecting managers based on economic decision-making skills yields managers who are 0.6 standard deviations better in terms of their management effects (Weidmann et al, 2024).

Key components include:

• Understanding comparative advantage
• Making optimal resource allocation decisions
• Avoiding common decision-making biases
• Managing complex numerical environments

2. Active Monitoring and Performance Optimization

The NBER study revealed that top-performing managers:

• Reduce wasted effort by half compared to average managers
• Ensure team members focus on high-impact tasks
• Maintain clear visibility of progress without micromanaging
• Achieve 50% better performance in final work periods

3. Communication and Clarity

According to research from CEB Global cited in Kaplan (2017), successful managers excel at:

• Driving toward clarity in expectations
• Practicing nonjudgmental communication
• Managing up and filtering down information
• Building trust through consistent communication

Avoiding Common Pitfalls

The Overconfidence Trap

The NBER research identified several key findings about overconfidence:

• Self-promoted managers typically perform worse than randomly selected ones
• Overconfidence particularly affects self-assessment of social skills
• There's a strong negative correlation between self-reported people skills and actual emotional perceptiveness (Weidmann et al, 2024)

The Boundary Challenge

Kaplan's research (2017) emphasizes the importance of:

• Maintaining professional boundaries
• Being "friendly" without trying to be friends
• Creating mentor-mentee relationships rather than peer relationships
• Setting clear expectations and accountability measures

Building a Path to Success

The Dual Track Approach

Recent research from Atlassian, highlighted in Black (2024), reveals an innovative approach to management development: the dual career track system. This approach, which has been adopted by several leading organizations including Telstra and Rolls-Royce, offers two key insights for developing managers:

1. Equal Value Paths: Technical expertise and management skills are valued equally, removing the pressure to pursue management solely for career advancement
2. Flexibility in Choice: Employees can switch between tracks without stigma if they find management isn't the right fit

Fundamental Skill Development Framework

According to the Center for Creative Leadership, cited in Arruda (2023), there are four essential skills every new manager must master:

1. Self-Awareness

• Only 10-15% of people are truly self-aware, despite 95% believing they are (Eurich, 2018)
• Impact: Self-aware managers make sounder decisions and build stronger relationships
• Development Method: Engage in regular self-reflection and seek candid feedback

2. Communication

Key areas identified by Weidmann et al. (2024):

• Clear task delegation
• Performance expectations
• Strategic updates
• Team motivation
• Cross-functional collaboration

3. Influence

Research shows effective managers:

• Build credibility through consistent performance
• Develop trust through transparent decision-making
• Create buy-in for team initiatives
• Navigate organizational dynamics

4. Agility

The ability to:

• Adapt leadership style to different situations
• Respond to changing business needs
• Adjust strategies based on team feedback
• Navigate uncertainty effectively

Personalized Development Approach

Melissa Janis, former VP for leadership at McGraw Hill (Arruda, 2023), recommends several key elements for successful management development:

1. Choice-Based Learning

• Allow managers to select relevant content based on immediate needs
• Offer multiple learning modalities (e-learning, instructor-led, microlearning)
• Provide flexibility in timing and pace of development

2. Assessment-Driven Focus

• Use targeted assessments to identify specific development needs
• Create personalized learning paths based on assessment results
• Regular progress evaluation and adjustment

3. Practice-Oriented Development

• Incorporate real-world application opportunities
• Include role-playing and simulation exercises
• Provide structured feedback on practical applications

Creating a Support System

The Weidmann et al. research (2024) emphasizes the importance of building a robust support network:

1. Mentorship Structure

• Connect with experienced managers
• Regular check-ins and guidance sessions
• Specific situation-based advice
• Career development planning

2. Peer Learning Networks

• Form cohorts of new managers
• Regular peer discussion sessions
• Shared problem-solving
• Best practice exchange

3. Professional Development Resources

• Access to training programs
• Industry conferences and seminars
• Management literature and case studies
• Online learning platforms

Measuring Progress and Success

Based on Black's (2024) research, successful management development programs include:

1. Performance Metrics

Track:

• Team engagement levels
• Project completion rates
• Employee retention
• Team productivity metrics
• Quality of deliverables

2. Feedback Mechanisms

Implement:

• Regular 360-degree feedback
• Team satisfaction surveys
• Peer manager reviews
• Self-assessment tools

3. Development Milestones

Monitor:

• Skill acquisition progress
• Leadership capability growth
• Team performance improvements
• Strategic initiative success

Creating an Action Plan

Research from KPMG Australia, cited in Black (2024), suggests a structured approach to management development:

1. Immediate Actions (First 90 Days)

• Complete leadership style assessment
• Establish regular team meeting cadence
• Set up one-on-ones with team members
• Define clear team goals and expectations

2. Short-Term Development (3-6 Months)

• Participate in formal management training
• Build peer network
• Develop team processes and systems
• Establish performance monitoring frameworks

3. Long-Term Growth (6-12 Months)

• Take on strategic initiatives
• Mentor others
• Contribute to organizational planning
• Develop advanced leadership skills

Success Indicators

Based on the Weidmann et al. research (2024), key indicators of successful management development include:

1. Team Performance Metrics

• Improved productivity
• Reduced wasted effort
• Better task allocation
• Higher engagement scores

2. Personal Growth Indicators

• Enhanced decision-making capability
• Improved emotional intelligence
• Better strategic thinking
• Stronger communication skills

3. Organizational Impact

• Higher team retention
• Improved cross-functional collaboration
• Better resource utilization
• Stronger team culture

Remember, as highlighted by Dorothy Hisgrove, KPMG's national managing partner of people and inclusion (Black, 2024), "Leadership is far more complex than it was even a few years ago, pre-COVID." Success requires a commitment to continuous learning and development, with a focus on both technical and interpersonal skills.

Conclusion

While the 60% failure rate for new managers is daunting, research shows clear paths to success. The Weidmann et al. NBER study demonstrates that focusing on developing the right skills—particularly economic decision-making and fluid intelligence—significantly improves management outcomes. Organizations that select managers based on these criteria rather than self-promotion or technical expertise see substantially better results.

Most importantly, good managers aren't born—they're developed through deliberate practice and skill building. The key is focusing on the right capabilities and maintaining a commitment to continuous improvement.

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Looking to further develop your management skills? Consider working with a mentor, joining management training programs, or exploring additional resources through your organization's leadership development initiatives.