The Indicator from Planet Money
The Indicator from Planet Money

Aug 19, 2026 · 9 min

Science finds better signals for choosing managers

Have a bad manager? Science explains why.

Companies often promote managers using familiarity and frontline performance, even though those signals may miss the abilities that improve employee and business outcomes.

3 key takeaways
  1. 1Economic decision-making and fluid intelligence predicted management performance better than confidence, experience, personality, or ambition.
  2. 2People most eager for managerial power performed worse than randomly assigned managers, partly because they overestimated their abilities.
  3. 3Job-relevant assessments can uncover strong managers among employees who do not volunteer for leadership roles.

Don't miss

The study finds that participants most eager to become managers performed worse than randomly assigned managers.

The brief

The episode asks why companies so often elevate ineffective managers, then turns to labor economist David Deming for evidence about what management actually requires.

Deming argues that promotions and interviews overvalue frontline performance, personal affinity, and bias—signals that can reward familiarity without measuring managerial potential.

In an experiment, participants managed teams through delegation and motivation tasks; the strongest predictors were economic decision-making, fluid intelligence, and social awareness.

The sharpest finding cuts against ambition: people who most wanted power performed worse than randomly assigned managers and tended to overestimate their abilities.

Tests in a South American grocery chain linked higher-scoring managers to better operations, sales, and profits, supporting more disciplined, job-relevant selection.

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Science finds better signals for choosing managers | PodLume