How Do You Identify a Good Manager?
Year: 2026
Type: article
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.
DOI: 10.1093/qje/qjag004
Institutions: University College London, London School of Economics and Political Science, University of Gothenburg, Lahore University of Management Sciences, Institute for Fiscal Studies, University of Warwick, National Bureau of Economic Research, University of California San Diego, Abdul Latif Jameel Poverty Action Lab, University of Michigan, Harvard University
Language: English
Subfield: Safety Research
Field: Social Sciences
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $7,619
OpenAlex ID: W7125413930