Fix Your Management System, and You Might Realize You Have More Good Managers Than You Think

There are seven brutal truths that separate good managers from bad—trust, clear boundaries, courage under pressure, and so on, according to a recent Fast Company article. Helpful, yes. But here’s the bigger truth leaders often miss: Great management systems turn mediocre managers into good ones—and good ones into great ones. 

This matters because the manager is the single biggest lever on engagement. Gallup has long shown that managers account for the majority of variance in team engagement. 

Look at Toyota. Decades of analysis point to a disciplined management system—clear standards, fast feedback loops, and structured problem solving—that produces reliable performance across plants and leaders. The excellence isn’t a personality. It’s a process, as touted by this Harvard Business School perspective on TPS resilience. It’s not unlike the Southwest Airlines I knew. 

Beyond the manager 

If one team is bleeding talent, then you probably have a manager problem. That is something you can deal with in a pointed way—the exit interviews should give you some direction. However, if many teams show similar turnover patterns, you likely don’t have many bad managers. You have one weak system. If your management system is bad, you can hire all the good managers you can find, but your results won’t change. 

That’s the distinction I see repeatedly in our economic engagement work. Systems that align everyone around customers, transparency, and shared success raise the ceiling and the floor of managerial performance.  

A real-world turnaround 

Consider a company I helped lead out of bankruptcy—a South Carolina manufacturer that recycled nylon from used carpet into pellets for automotive parts. The fundamentals looked promising (rising oil prices and sustainability tailwinds), but the business was failing when it was acquired out of bankruptcy in 2008. 

This was the “before” picture: Commercially, the sales group had no shared focus. In one egregious case, a salaried rep spent much of his time selling for a competitor. We changed personnel, but the deeper issue was no system—no unified strategy, no clear customer or employee voice, no operating rhythm. It was a company of hired hands. 

First, we divided responsibilities—operations drove throughput and cost discipline; sales and marketing drove customer value and product approvals. We installed an annual strategy cycle, monthly operating reviews, and transparency scoreboards. This way, managers could see and understand cause‑and‑effect and act fast. 

Bottlenecks surfaced quickly. Upstream, our collection partner couldn’t scale reclaimed carpet volume. Instead of squeezing them, we partnered with them. We let them focus on collection, while we built and staffed regional distribution centers and ran logistics to the plant. Each party played to their strengths. It all came down to system design. 

Downstream, approvals from big automakers, especially Ford, were slow. So, we extended the same partnering approach. We invited Ford’s engineering, quality, and purchasing leaders to tour our 600‑acre site and then join our weekly strategic planning meeting that afternoon. They saw our capabilities firsthand, told us exactly what mattered, and helped shape priorities for our highest-value product line. Their leader closed by saying he’d never been invited into a suppliers’ strategy session and that Ford needed more partners like this. 

Now for the “after” picture: With clarity on what customers valued most, transparent key metrics, and aligned incentives, line managers began making better decisions. Operations could respond to demand in real-time, and commercial teams targeted the right accounts. After five years, the company sold for more than five times the purchase price. We also shared value with employees because they were true partners in the system. 

Systems that work 

A strong management system, like economic engagement, can engage every leader in the same mission: serving customers profitably. Here’s how: 

1. Customers define a company’s value, so managers don’t manage by personal opinion. To drive customer engagement, consider what your customers are thinking right now.
2. Economic understanding—how we make money, what drives profit—aligns all employees in a common understanding of what defines winning for the company, making management easier and more effective. It is critical to empower employees to think like owners. 
3. Transparency reinforces good behavior and exposes bad behavior early.  
4. When compensation ties to performance outcomes, managers and employees are economically aligned, and everyone has a stake in the company’s success. Empirical work on profit‑sharing shows measurable boosts.  
5. Employee participation leads to lower turnover, better relationships, and shared learning. 

The manager uplift 

In 30 years of doing this work, I’ve watched three predictable paths unfold when you solve the management system problem: 

• Good managers get even better, because the system amplifies their strengths. 
• OK managers level up, because the system teaches what true engagement looks like and rewards it.
• Poor managers either improve or opt out because the system won’t tolerate persistently bad behavior. 

Before you blame your managers for dwindling engagement or results, examine the management system you’ve placed them in. Fix the system, and you’ll likely discover you already have more good managers than you think. Managers will come and go. Great management systems endure—and compound greatness. 

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