Thursday, November 27, 2014

The Experts’ Advantage

LONDON – Nearly everyone who sits on Google’s board of directors has at least one computer science or engineering degree or doctorate. There are two university presidents and eminent scholars – Stanford University’s John Hennessy and former Princeton University President Shirley Tilghman – and several members of the National Academy of Engineering and other illustrious organizations. For Google, it pays to have technical expertise at the top.

But Google is an unusual corporate giant in promoting those with scientific prowess to the top of the management ladder. Beyond Silicon Valley, few senior corporate executives boast technical expertise in the products that their companies produce. American boardrooms are filled with MBAs, especially from Harvard, while firms in the rest of the developed world (with the possible exception of Germany) seem to prefer professional managers over technical or scientific talent.

Nowadays, it seems as anomalous to have knowledge workers serve as professional leaders as it once did to have scientists in the boardroom. It was previously thought that leadership is less necessary in knowledge-intensive organizations, where experts were assumed to be superior because they were motivated by intellectual pleasure rather than such extrinsic motivations as profit growth and cost targets.

This difference in attitude is evident in many areas of society, not least in hospitals in the United States and the United Kingdom, where knowledge-intensive medical practitioners operate separately from managers. Hospitals used to be run by doctors; today, only 5% of US hospitals’ CEOs are medical doctors, and even fewer doctors run UK hospitals. “Medicine should be left to the doctors,” according to a common refrain, “and organizational leadership should be left to professional managers.”

But this is a mistake. Research shows that higher-performing US hospitals are likely to be led by doctors with outstanding research reputations, not by management professionals. The evidence also suggests that hospitals perform better, and have lower death rates, when more of their managers up to board level are clinically trained.

We see similar findings in other fields. My research shows that the world’s best universities, for example, are likely to be led by exceptional scholars whose performance continues to improve over time. Departmental-level analysis supports this. A university economics department, for example, tends to perform better the more widely its head’s own research is cited.

With experts in charge, it may not always look like there is an effective reporting structure in place. But, as the academic saying goes: just because you cannot herd cats, does not mean there is not a feline hierarchy. As with cats, academics operate a “relative hierarchy” in which the person in charge changes, depending on the setting.

Even in the world of sports, where success is not an obvious preparation for management, we see interesting linkages between experience and organizational performance. The very best NBA basketball players often make top coaches, while former Formula 1 champion drivers are associated with great team performance. Of the 92 soccer clubs in the English football league, club managers played an average of 16 years in senior clubs. Alex Ferguson, arguably Britain’s best manager, scored an average of one goal every two games in his professional career.

But where the pattern does occur, especially in the business world, we should take note. The senior partner of any professional services firm is likely to have been a top performer during a long career with the firm. This might be because experts and professionals in knowledge-intensive organizations prefer a boss who has excelled in their field. The leader’s credibility is vital: if she sets high standards, it seems only right that she should have matched or exceeded them herself. In short, she must lead by example.

This sort of leadership arrangement creates a virtuous circle. A leader with prior experience knows how her subordinates feel, how to motivate them, and how to create the right working environment. She probably makes better hiring decisions, too – after all, the best scientist or physician is more likely than a professional manager to know which researchers or doctors have the greatest potential.

The problem, however, is not simply that today’s leaders lack technical knowledge; it is that experts are often reluctant to lead. But that can change. By communicating the importance of management and leadership early in a specialist’s career, and by offering tailored, digestible, and jargon-free training, we could bridge the gap. Many medical schools are already considering including management education as part of the curriculum.

The trick is to get experts, who are trained to go ever deeper into their specialization, to step back and view the big picture. With the right preparation, there is no reason why a leader cannot specialize and manage. The results could be remarkable. Think of how governments run by scientists with management skills might respond to climate change. Top minds should be put to top use.

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    1. CommentedStamatis Kavvadias

      That's great, but management persistence in optimizing management is so pervasive that the actual problem is the opposite: researchers, start to care about management, long before they have a fruitful scientific career, or exactly because of it. They engage in management, and are almost as bad, in managing knowledge intensive institutions, as MBAs, managing research instead of coordinating, causing conflicts, and, certainly, providing nothing as motivative as leadership by example.

    2. CommentedNathan Coppedge

      Obviously, the catch-all with this article would be computer programmers. Whenever computer-programming is implicated, it is obvious that technical know-how is required. Although, as the second argument goes, it would help to have some people skills or marketing ability. It is difficult to overestimate how socially dysfunctional some people are (I include myself in this). I have heard in many articles that programmers are often thankful that there is someone "in management" above them, meaning by this that they wouldn't know what to do without them. There is a similar case with other types of engineers, although I can guess that some industrial engineers become architects of one type or another. It is easy to be led by stereotypes, and I can see that the article responds to that. In general I agree with the message that technical expertise can help management, although in another way, there may be many unseen hurdles. Who am I, or anyone, to disagree with what appears already to be natural leadership, mostly by non-experts? Of course, some of these beings really are experts, relatively speaking. So, (A) Are they experts? Relatively, they already are, (B) Can an industry be led by experts? Relatively, yes, but (C) Isn't leadership for natural leaders, who already have the aptitude? Possibly, but (D) Aren't industries apparently more often than not concerned with technical fields these days? They are.

      So, the conclusion in my view is that technical leadership is now the going trend, not because it's a good idea, but because its required. And not that it requires any additional expertise than any given manager happens to have, but that the pre-requisites for being a manager IN GENERAL have increased. But that may be a spurious point. But it gets to the conclusion, specialization may be necessary for leadership. I don't entirely disagree, but I think there are multiple ways around it. Military strategy says that over-commitment may be more costly than bad training, when a standard is already met. That may overrule this entire discussion. As soon as it's about people skills, different people win, regardless of training. Spooky, but true. And it can affect products drastically. Some people might even know that it does damage. But it takes a lot of research. Maybe that's the point to focus on in the future, is bad products. Where is the evidence? From the technical side, it may be hard to believe in disasters.

    3. CommentedTim Chambers

      With so few women in leadership positions in any place but academia, it seems like female chauvinism here to use she in place of he. That is not to say that women should not be in leadership positions, it is just to acknowledge the facts of life. I would otherwise agree with the author7s points, and believe that expertise in the main pursuit of any organisation, as a opposed to managerial know how, is vital to the long terms interest of any organisation.

    4. CommentedDavid Donovan

      The trick is to get experts, who are trained to go ever deeper into their specialization, to step back and view the big picture.

    5. CommentedDouglas Costello

      Often we become mesmerized by perceptions of capability that are not correct. If we are lucky it becomes constrained to one enterprise and if unlucky everyone jumps in as if the ship was sinking and we had but one lifeboat. Much later on when the analyses begin the ship is found not be sinking then but it is now. There is something of the snakeoil salesman and carpet baggers about these economic theories.