By Lori Riordan and Bill Hawkins
Technological advantage is fleeting. Rapid advancement in communications and technology in the last decade has virtually assured organizations that any technology advantage enjoyed today will be quickly copied (and most likely improved upon) by the competition within the year. Intellectual assets provide the greatest long-term strategic advantage.
Skilled people – especially at senior management levels – provide a competitive edge that is hard to duplicate. Recognizing this, you would think that companies would focus a lot of attention on selection, development and retention of this key asset, particularly those in management positions.
In our experience, companies don’t give the focus or attention to this asset they do others deemed important to the daily management of the business. It is not unusual to see a company take months and do extensive analysis researching a new inventory system. Then promote someone to run this system simply because he or she has been with the company the longest and has demonstrated technical competency. Little attention is paid to what skills are actually needed in this new role. Managers promoted because of “tenure” are frequently “unskilled” in their new role.
Although promotion of unskilled managers can occur in any organization regardless of size, age or stage in the life cycle, it most frequently occurs in start-up and high growth companies. In these organizations, the pace of change is fastest and the pool of available talent just isn’t as big. There is a particular appreciation for technical competence and an allegiance to people who were there through the difficult and turbulent times. This tenure is translated into knowledge of “how things are done here.”
Technical proficiency translates into the ability to address the current crisis quickly — often without regard for anything other than achieving results. Of course, this skill was highly valued in the start up mode but may not be optimally effective,in a midsize company and might actually be counterproductive in specific situations (during a merger, for instance).
What is happening in Companies
Failure to recognize the combination of unique skill sets (by position and by level) can derail a carefully planned reorganization or promising career. Obviously, technical skills are critically important for first level management, but not so important at the top. People and conceptual skills dominant the needs list at the executive level. Placing unskilled people into new positions might be all right if the critical competencies and skills were identified and the newly promoted people developed to improve them. Research shows that is not what is happening.
Michael Lombardo and Bob Eichinger surveyed 3,000 people in over 130 companies comparing multi-rater feedback on 67 competencies of individual contributors, managers, and executives. What they found was troubling. The transition moving from individual contributor to manager is considerable. Results, however, showed little change occurs in the actual skills demonstrated on the job. With a few small differences, the multi-rater results of managers looked like the individual contributors (differing on only 8 of the 67 competencies).
It appears that those with awful people skills or a serious lack of technical skills do get weeded out at the individual contributor level (or at least not promoted), but no new skills are developed. The people who are promoted arrive in the management role prepared to do what they have always done. Although success in the new role always requires new skills (build effective teams, develop direct reports, deal with conflict), as a group they are no more skilled at doing this than individual contributors.
Although success in the new role always requires new skills (build effective teams, develop direct reports, deal with conflict), as a group they are no more skilled at doing this than individual contributors. It gets only slightly better looking at the change from manager to executive. Skills that are absolutely essential at the executive level, such as dealing with ambiguity and paradox, motivating others, managing vision and purpose are in the bottom half of all competencies for managers. They are also in the bottom half of skills ranked for executives.
It gets only slightly better looking at the change from manager to executive. Skills that are absolutely essential at the executive level, such as dealing with ambiguity and paradox, motivating others, managing vision and purpose are in the bottom half of all competencies for managers. They are also in the bottom half of skills ranked for executives.
Even though the skill and competency requirements change rather dramatically with level, few people are developed on much besides technical job skills in most organizations. Managers and executives, who were originally hired to be software engineers, sales people, or financial analysts, get promoted.
In this new role, they find themselves in situations where they must lead unenthusiastic people through complicated change processes that impact nearly every area of the organization. Many fail because they simply don’t have the skill set to achieve success in the new role. It is little wonder that studies estimate executive failure rates at between a third to one-half.
Lori Riordan has over ten years of hands-on experience managing high growth organizations through the transition from small entrepreneurial companies to mid-size high-growth corporations. She was responsible for the start-up of the Human Resources function for both Martha Stewart Living Omnimedia and Bloomberg Financial in New York. An HR council member of The Conference Board, Lori is currently an independent consultant advising Fortune 500 organizations.
Bill Hawkins is an independent consultant specializing in leadership development, performance management, and organizational change. In association with The Alliance for Strategic Leadership and Innovative Resources Consultant Group he has worked with and conducted leadership training in over twenty Fortune 500 companies in 17 countries. Listed in Who’s Who in International Business, Bill was a contributing author in The Peter Drucker Foundation book The Organization of the Future, 1997. He also contributed in the book coaching for Leadership, 2000.