Leading Clever People

30. September 2016

Führungsstile, Strategie

by Rob Goffee and Gareth Jones

The Idea in Brief

Who most determines your company’s success? Clever people—employees whose knowledge and skills enable them to produce disproportionate value for your firm. Think the pharmaceutical researcher who formulates a new drug, or the programmer who creates a new piece of code. Their single innovation may bankroll their entire organization for a decade.

To make sure clever people do their best work at your company, you must harness their talents. But that isn’t easy: Clever people don’t want to be led. They don’t care about titles or promotions. And they’re easily bored.

What to do? Goffee and Jones suggest leading this crew differently. Be a benevolent guardian, not a traditional boss—by protecting them from complex rules and politics. Create a safe environment where they can experiment—and fail. Respect their expertise while quietly demonstrating your own.

Lead your clever people the right way, and you unleash their full potential. They and your organization win.

The Idea in Practice

To get the most from your clever people, understand what makes them different. Unlike typical employees, they:

* Know their worth

* Know how to get funding for pet projects

* Expect instant access to higher-ups

* Are plugged into extensive knowledge networks

* Won’t thank you for leading them well

To increase clever people’s value—and prevent attrition:

* Reduce administrative distractions. Protect clever people from rules and politics associated with big-budget activities. For example, at a newspaper, the editor lets an investigative reporter skip editorial meetings. In a big consumer goods company, a leader filters requests for information from the head office so a consumer profiler can experiment with a new marketing plan.

* Maintain diversity of ideas. Avoid centralized management structures that stifle innovative thinking.

Example:

Swiss pharmaceutical giant Roche encourages the clever people in its three companies to pursue different projects as they see fit. CEO Franz Humer tells them, “You do what you want [at Genentech], and we will do what we want at Roche, and in five years’ time we will know. Sometimes you will be right and sometimes we will be right.”

* Make it safe to fail. Effective leaders know that for every successful product, many will fail. Ideally, the successes will more than recover the costs of the failures. By helping your clever people live with their failures, you boost the chances of more successes.

Example:

When three of Glaxo’s high-tech antibiotics all failed in the final stages of clinical trial, chairman Sir Richard Sykes sent letters to the team leaders. He thanked them for their hard work but also their decision to kill the drugs. He then encouraged them to move on to the next challenge.

* Let clever people pursue private efforts. These efforts may generate new business opportunities for your firm.

Example:

Google lets employees spend one day a week on Googlettes—their own start-up ideas. Result? Innovation at a speed that puts large bureaucratic organizations to shame. For instance, the Google-affiliated social networking Web site Orkut began as a Googlette.

* Demonstrate you’re an expert in your own right. Show how your expertise complements or supports your clever people’s expertise. You’ll establish credibility with them.

Example:

A marketing director at a brewer knew little about traditional brewing techniques. But he could quote details about his company’s sales performance. His clear mastery of the business side gave him authority and credibility, so brewers respected his product development opinions.

Franz Humer, the CEO and chairman of the Swiss pharmaceutical giant Roche, knows how difficult it is to find good ideas. “In my business of research, economies of scale don’t exist,” he says. “Globally today we spend $4 billion on R&D every year. In research there aren’t economies of scale, there are economies of ideas.”

For a growing number of companies, according to Humer, competitive advantage lies in the ability to create an economy driven not by cost efficiencies but by ideas and intellectual know-how. In practice this means that leaders have to create an environment in which what we call “clever people” can thrive. These people are the handful of employees whose ideas, knowledge, and skills give them the potential to produce disproportionate value from the resources their organizations make available to them. Think, for example, of the software programmer who creates a new piece of code or the pharmaceutical researcher who formulates a new drug. Their single innovations may bankroll an entire company for a decade.

Top executives today nearly all recognize the importance of having extremely smart and highly creative people on staff. But attracting them is only half the battle. As Martin Sorrell, the chief executive of WPP, one of the world’s largest communications services companies, told us recently, “One of the biggest challenges is that there are diseconomies of scale in creative industries. If you double the number of creative people, it doesn’t mean you will be twice as creative.” You must not only attract talent but also foster an environment in which your clever people are inspired to achieve their fullest potential in a way that produces wealth and value for all your stakeholders.

That’s tough. If clever people have one defining characteristic, it is that they do not want to be led. This clearly creates a problem for you as a leader. The challenge has only become greater with globalization. Clever people are more mobile than ever before; they are as likely to be based in Bangalore or Beijing as in Boston. That means they have more opportunities: They’re not waiting around for their pensions; they know their value, and they expect you to know it too.

If clever people have one defining characteristic, it is that they do not want to be led. This clearly creates a problem for you as a leader.

We have spent the past 20 years studying the issue of leadership—in particular, what followers want from their leaders. Our methods are sociological, and our data come from case studies rather than anonymous random surveys. Our predominant method consists of loosely structured interviews, and our work draws primarily from five contexts: science-based businesses, marketing services, professional services, the media, and financial services. For this article, we spoke with more than 100 leaders and their clever people at leading organizations such as PricewaterhouseCoopers, Electronic Arts, Cisco Systems, Credit Suisse, Novartis, KPMG, the British Broadcasting Corporation (BBC), WPP, and Roche.

The more we talked to these people, the clearer it became that the psychological relationship leaders have with their clever people is very different from the one they have with traditional followers. Clever people want a high degree of organizational protection and recognition that their ideas are important. They also demand the freedom to explore and fail. They expect their leaders to be intellectually on their plane—but they do not want a leader’s talent and skills to outshine their own. That’s not to say that all clever people are alike, or that they follow a single path. They do, however, share a number of defining characteristics. Let’s take a look at some of those now.

Understanding Clever People

Contrary to what we have been led to believe in recent years, CEOs are not utterly at the mercy of their highly creative and extremely smart people. Of course, some very talented individuals—artists, musicians, and other free agents—can produce remarkable results on their own. In most cases, however, clever people need the organization as much as it needs them. They cannot function effectively without the resources it provides. The classical musician needs an orchestra; the research scientist needs funding and the facilities of a first-class laboratory. They need more than just resources, however; as the head of development for a global accounting firm put it, your clever people “can be sources of great ideas, but unless they have systems and discipline they may deliver very little.”

That’s the good news. The bad news is that all the resources and systems in the world are useless unless you have clever people to make the most of them. Worse, they know very well that you must employ them to get their knowledge and skills. If an organization could capture the knowledge embedded in clever people’s minds and networks, all it would need is a better knowledge-management system. The failure of such systems to capture tacit knowledge is one of the great disappointments of knowledge-management initiatives to date.

http://hbr.org/2007/03/leading-clever-people/ar/1

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