Have a bad manager? Science explains why.

**Adrian Ma** (0:00)
N-P-R. The entire world of work can basically be divided into two kinds of people, the managers and the managed.

**Ricky Mulvey** (0:12)
And those of us who've spent our days toiling in the managed class have probably experienced our share of bad managers.

**Adrian Ma** (0:20)
I think a lot of people secretly feel like their managers are sort of extraneous to what they do.

**David Deming** (0:24)
Well, often they are. I mean, just because management is necessary doesn't mean that everyone who's doing it is doing it well.

**Ricky Mulvey** (0:30)
David Deming is a labor economist and dean at Harvard College.

**David Deming** (0:33)
The reason why you say management can feel so bad sometimes is because bad coordination feels wasteful because it is wasteful.

**Adrian Ma** (0:40)
Would you say you're a good manager?

**David Deming** (0:43)
You know, it's funny, I would say that I'm average to below average manager unconditionally. I think I've worked hard to become average.

**Adrian Ma** (0:49)
David's also been working hard to understand what makes a good manager. Like, are there specific traits that can be measured in a scientific way that actually predict who will be a good manager? And in a study published earlier this year, David and his colleagues found the answer is yes, there are. And they aren't what you might think.
This is The Indicator from Planet Money. I'm Adrian Ma.

**Ricky Mulvey** (1:11)
I'm Ricky Mulvey. How do you identify a good manager with science? That's after the break.

**Adrian Ma** (1:17)
Science.

**Ricky Mulvey** (1:18)
Science.

**SPEAKER_4** (1:22)
This message comes from Betterment. You know when you sell a stock or any investing asset and start to feel the dread of getting a surprise tax bill? Betterment's Tax Impact Preview Tool shows you the estimated tax impact of the sale, so you can make informed tax smart investing decisions. Get started today at betterment.com. Investing involves risk, performance not guaranteed. Betterment is not a tax advisor, nor should any information herein be considered tax advice. Please consult a qualified tax professional.
This message comes from NPR sponsor Charles Schwab with its original podcast On Investing. It's hosted by Lizanne Saunders, Schwab's chief investment strategist, and Colin Martin, head of fixed income research and strategy for the Schwab Center for Financial Research. Each week, Lizanne, Colin, and their guests analyze economic developments and bring context to conversations around stocks, fixed income, the economy, and more. Download the latest episode and subscribe at schwab.com/oninvesting or wherever you get your podcasts.

**Ricky Mulvey** (2:23)
For businesses, managers can mean the difference between profit and loss.

**Adrian Ma** (2:27)
And for employees, a manager can make work a great place to be or a terrible one.

**Ricky Mulvey** (2:32)
That's why there's that saying that people don't leave bad jobs, they leave bad managers.

**Adrian Ma** (2:37)
Yeah, and for all that's at stake, David Deming argues that a lot of companies really are not that great at picking managers.

**Ricky Mulvey** (2:45)
When a firm has a manager role to fill, David says they usually default to a couple different approaches. They might promote someone who was a good frontline worker.

**David Deming** (2:54)
The people who were good on the first rung of the ladder, who were good individual contributors, automatically get thought of as management material.

**Ricky Mulvey** (3:00)
The problem with that is that people who are great individual workers aren't always the best at running teams.

**Adrian Ma** (3:06)
Another way companies try to identify good managers is through interviews. But David says this is full of problems.

**David Deming** (3:13)
The job interview is a pretty terrible technology for figuring out what people can do. It's like we sit here, we talk, I ask you a few stock questions about, tell me about a time when, and people kind of know what to expect. That's probably a bad way of figuring out whether somebody's good at anything, including management. Because I think it loads too heavily on, do I like this person, and is this person the kind of person that feels to me like a manager?

**Adrian Ma** (3:35)
So it introduces bias?

**David Deming** (3:37)
It could introduce gender bias. It can introduce all kinds of biases. But it also is just a bad measure. If you and I bond at the end of the meeting over whether we like to play tennis at the same club, that might make me even unconsciously think of you as a better manager because you're more like me and I think I'm a good manager, and so you should be like me. So there's all kinds of mood, kind of affiliation sense that people get that I think tricks them.