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Archive for April 8th, 2010

Why Those with the “Right Stuff” Are Often the Wrong People

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We suspect that the mistakes happen when firms choose managers at any level – from CEO to business unit head to project manager – based on what we call “right stuff” thinking…

Many search committees and hiring executives classify candidates by right-stuff attributes.  The often look for an uninterrupted string of past successes to predict that more successes are in store.  The theory in use is that if you find someone with a track record and with the right-stuff attributes, then he or she can successfully manage s new business venture..

Managers who have successfully worked their way up the ladder of a stable business unit… are likely to have acquired the skills that were necessary to succeed in that context.

When a slow-growing firm’s leaders decide they need to launch a new growth business to restore their company to vitality, who should they tap to head the venture?  A talented manager from the core business who has demonstrated a record of success?  An outsider who has started and grown a successful company?  The school-of-experience view suggests that both 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 [any experience ] 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 next time around.

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.

The above is a common sentiment based on examining the tenure of CEO’s.  Many CEO’s don’t have a “Second Act”.  A CEO brought in to turnaround a company sometimes does not have the skills to run the company after the turnaround.  A CEO that can run a company in predictable economic  times may not have the skills to deal with hyper-competition and an economic downturn – so s/he’s out.  Ever wonder why CEO tenures are so short?  External environments may just change faster than a CEO can adapt and individual CEO’s simply don’t have an infinite portfolio of skills to match the rates of external change.

Read more –  The Innovator’s Solution: Creating and Sustaining Successful Growth

Read about Ed Zander and the Motorola Turnaround –

And Zanders exit and severance package –

Written by frrl

April 8, 2010 at 4:51 pm

Posted in Uncategorized

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