How do you identify a good manager?

Ben Weidmann, Joseph Vecci, Farah Said, Sonia Bhalotra, Achyuta Adhvaryu, Anant Nyshadham, Jorge Tamayo and David Deming

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We introduce and validate a novel approach to identifying good managers. In a preregistered lab experiment, we causally identify managerial contributions by randomly assigning managers to teams and controlling for individual skill. We find that manager contributions are crucial for team success, and that people who self-select into management roles perform worse than randomly assigned managers. Managerial performance is strongly predicted by economic decision-making skill but not by demographic characteristics. Two validation studies support our experimental results. Participants who succeed in the lab receive more real-world promotions and, in a separate study of retail store managers, skill measures strongly predict store sales. A one standard deviation increase in manager quality increases annual per store sales by US$4.1 million (25% increase). Selecting managers on skills rather than demographic characteristics or the desire to lead could substantially improve organizational performance.

Keywords: management; treamwork; skills; measurement; experiment (search for similar items in EconPapers)
JEL-codes: C90 C92 J24 M54 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2026-05-31
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Published in The Quarterly Journal of Economics, 31, May, 2026, 141(2), pp. 1581 - 1633. ISSN: 0033-5533

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:137018

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