Last week we observed that being a jack of all trades isn’t necessary to being a CEO. It may not hurt, we noted, but it isn’t what makes one successful in the generalist role that is necessary at the top.
Even broad experience – even merely knowledge – of an industry may not be specifically necessary for serving in it as a senior executive. Recently we have seen examples of this in action, such as in the American automobile manufacturing industry, as managers from one field are called in to head companies in another.
On the other hand, someone from within an industry might not be successful either, as we all well know. We saw evidence of this Friday in an item, passed along by Cam Beck of ChaosScenario, that speaks to it in a spectacular way. Interestingly, it is about a corporate insider who nevertheless also lacked insider-level experience in his industry (promoted to CEO from an advisory staff position, rather than from general management).
But what he also lacked is line-level experience in the one thing that really does count: decision-making. And this is not a new idea. The 19th century military thinker, Carl von Clausewitz, argued that a minister of defense need not be a military officer – a controversial idea at the time – he only need be an effective decision-maker.
And more recently the late Peter Drucker made this argument with regard to managers. In The Effective Executive, he identified 5 basic skills such a person should have. None of them had to do with master or jack-of-all-trade level technical or business-area experience, but rather with more central, vital skills related to time management and prioritizing. He concluded the list with this:
Effective executives, finally, make effective decisions. . . They know that an effective decision is always a judgment based on “dissenting opinions” rather than on “consensus on the facts.” And they know that to make many decisions fast is to make wrong decisions. What is needed are few but fundamental decisions.”
Neither Clausewitz nor Drucker suggested that knowledge of the field you are assigned in is necessarily harmful, nor that you can or should remain wilfully ignorant of it in order to be effective. They only proposed that the central role of a senior manager in any area is expressed through the making of decisions.
You should be neither swayed by nor dismissive of experience – whether you are building your own or reviewing someone else’s resume. What you really want, though – whether to hire or cultivate – is the ability to make effective decisions, which get the organization off the dime and advancing toward corporate goals.
This is a large topic – particularly as described by Drucker; it is much more than merely the decision-making process alone. And it spans the specialist, generalist, and stewardship phases of your career. We will return to it.
—
Today’s tip: Please see this Yahoo! News item about shareholder (pension funds) reaction to Yahoo‘s spurning of Microsoft‘s takeover offer. This is an interesting contest between owners and a board dominated by founders. It is specifically critical of the poison pill techniques being employed by the firm.
—
Did you know that as a subscriber to this blog (by either RSS reader or email), you are entitled to a free download (.pdf format, 344KB) of the first chapter from Jim’s critically-acclaimed book, Managing Leadership? Download your copy now! (Even if you haven’t subscribed, yet – download it anyway!)
—
Technorati Tags: CEO, generalist, executive, American, automobile, manufacturing, industry, manager, Cam Beck, management, decision-making, Clausewitz, effective, decision-maker, time management, prioritizing, judgment, shareholder, Yahoo, Microsoft, owner, board, Peter Drucker
Sphere: Related Content
Wow, Jim,
I never would have guessed that Clausewitz would have been in that corner. What great cocktail party trivia
On the serious side, you made me think about the CEOs and others that I’ve had the opportunity to work with over the years. And, indeed, the track record shows that, given an either/or choice between an effective decision maker and someone who really “knows” the business, the effective decision maker is the way to go.
The files show that high-level executives with great company/product/technical knowledge but ineffective decision skills did not fair well. On the other hand, execs brought in from the outside who were good decision makers succeeded.
There is something about the ability to discern well before “pulling the trigger” that makes these folks very effective. And they weren’t all trigger happy either. Just very, very good marksmen.
Enjoying the series, Jim. . .
Hello Steve,
I agree, and am not at all surprised that our experience in this regard is so similar.
When you talk about “ability to discern” before “pulling the trigger” – that’s a real key, and a vital precursor to and part of the decision-making process that doesn’t receive enough attention. Thanks for adding that to the mix. I like the metaphor for that: like picking your fights, you must pick your targets – and frame the selection criteria – for decision-making carefully.
Avoiding “trigger-happy” decision-makers, too – that’s a big theme for Drucker – Buffett has talked about it, too.
Thanks, as always, Steve, for stopping by with insightful observations like these!
Well, it was Clausewitz who said that war is politics by another means, and Lord knows politicians don’t have any sense.
Hello Cam,
That paints the military as a sort of political class, dooming us all! But that’s a perceptive insight, in that in those days those two classes were pretty much all that mattered, as the religious class was falling in influence, and popular sovereignty was still – French Revolution notwithstanding – essentially inconceivable. (And the wars Clausewitz observed while developing his theories were fought to suppress the rise of the influence in Europe of the American Revolution.)
Hopefully, we have some form of adult supervision in the process these days.