I was stunned to read The Huffington Post's headline last week that "Great Companies Don't Require Good Management."  The site was referencing a May 2010 interview with billionaire investor Warren Buffett, picked up by Bloomberg on February 17, 2011, in which the Berkshire Hathaway CEO said he weighed companies' pricing power more heavily than their management effectiveness when considering whether to invest in them.  He sometimes "doesn't even consider the people in charge," Bloomberg reported.

Maybe you could make the case that with large, public companies this investment approach holds – although personally I think the management team and strategy are important no matter the size and type of business entity.  However, with smaller, private firms – which as we have often written based on our own employee engagement research, must compete on quality rather than on price – not only is good management a required element of great companies, but these companies' long-term sustainability and growth hinges on it.

The small firms that apply for Winning Workplaces' Top Small Company Workplaces award are quite conscious of the equation through which investing in your workplace to improve the training and development of folks at management level helps the bottom line.  There is a causal relationship, as the five examples below show.  They represent selected 2011 award applicants' responses to our application question "Describe a management development or training strategy that has been particularly effective." 

Note the varied forms of ROI a focus on strengthening their management have yielded (which I've bolded):

Related: Our profile of success on Merkle Inc., the database marketing agency run by our Best Boss award winner David Williams, shows how they use learning-oriented team building strategies to increase management effectiveness.  Read it here.