How to Pick Managers for Disruptive Growth: Part 1

Sometimes the right stuff is the wrong stuff.

Many hiring executives assume that successful managers can be identified using phrases such as "good communicator," "results oriented," "decisive," and "good people skills." And they look for an uninterrupted string of past successes to predict that more successes are in store.

The theory is that if you find someone with a track record and with the right-stuff attributes, then he or she can successfully manage the new business venture. But there's a more reliable guide.

The management skills and intuition that enable people to succeed in new assignments were shaped through their experiences in previous assignments.

A business unit therefore can be thought of as a school, and the problems that managers have confronted within it the "curriculum" that was offered in that school.

The skills that managers can be expected to have and lack, therefore, depend heavily upon which "courses" they did and did not take as they attended various schools of experience.

Managers who have worked their way up the ladder of a stable business unit—for example, a division that manufactures standard high-volume electric motors for the appliance industry—are likely to have acquired the skills that were necessary to succeed in that context.

The "graduates" of this school would have finely honed operational skills in managing quality programs, process improvement teams, and cost-control efforts. Even the most senior manufacturing executives from such a school would likely be weak in starting up a new plant, because one encounters very different problems in starting up a new plant than in running a well-tuned one.

When a slowly growing firm's leaders decide they need to launch a new-growth business to restore their company's vitality, who should they tap to head the venture? A talented manager from the core business who has demonstrated a record of success? Or an outsider who has started and grown a successful company?

The school-of-experience view suggests that both of these managers might be risky hires. The internal candidate would have learned how to meet budgeted numbers, negotiate major supply contracts, and improve operational efficiency and quality, but might not have attended any "courses" on starting a new business in his or her prior career assignments.

An outside entrepreneur might have learned a lot about building new fast-moving organizations, but would have little experience competing for resources and bucking inappropriate processes within a stable, efficiency-oriented operating culture.

In order to be confident that managers have developed the skills required to succeed at a new assignment, one should examine the sorts of problems they have wrestled with in the past. It is not as important that managers have succeeded with the problem as it is for them to have wrestled with it and developed the skills and intuition for how to meet the challenge successfully the next time around.

One problem with predicting future success from past success is that managers can succeed for reasons not of their own making—and we often learn far more from our failures than our successes.

Failure and bouncing back from failure can be critical courses in the school of experience. As long as they are willing and able to learn, doing things wrong and recovering from mistakes can give managers an instinct for better navigating through the minefield the next time around.

See here via BusinessPundit

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