How Managers Become Leaders

Here is an excerpt from an article written by Michael D. Watkins for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

Credit: Artwork: Adam Ekbergs Country Roads 2005, ink-jet print

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Harald (not his real name) is a high-potential leader with 15 years of experience at a leading European chemical company. He started as an assistant product manager in the plastics unit and was quickly transferred to Hong Kong to help set up the unit’s new Asian business center. As sales there soared, he soon won a promotion to sales manager. Three years later he returned to Europe as the marketing and sales director for Europe, the Middle East, and Africa, overseeing a group of 80 professionals. Continuing his string of successes, he was promoted to vice president of marketing and sales for the polyethylene division, responsible for several lines of products, related services, and a staff of nearly 200.

All of Harald’s hard work culminated in his appointment as the head of the company’s plastic resins unit, a business with more than 3,000 employees worldwide. Quite intentionally, the company had assigned him to run a small but thriving business with a strong team. The idea was to give him the opportunity to move beyond managing sales and marketing, get his arms around an entire business, learn what it meant to head up a unit with the help of his more-experienced team, and take his leadership skills to the next level in a situation free from complicating problems or crises. The setup seemed perfect, but a few months into the new position, Harald was struggling mightily.

Like Harald, many rising stars trip when they shift from leading a function to leading an enterprise and for the first time taking responsibility for a P&L and oversight of executives across corporate functions. It truly is different at the top. To find out how, I took an in-depth look at this critical turning point, conducting an extensive series of interviews with more than 40 executives, including managers who had developed high-potential talent, senior HR professionals, and individuals who had recently made the move to enterprise leadership for the first time.

What I found is that to make the transition successfully, executives must navigate a tricky set of changes in their leadership focus and skills, which I call the seven seismic shifts. They must learn to move from specialist to generalist, analyst to integrator, tactician to strategist, bricklayer to architect, problem solver to agenda setter, warrior to diplomat, and supporting cast member to lead role. Like so many of his peers, Harald had trouble negotiating most of these shifts. To see what makes them so difficult, let’s follow him through each of them, as he confronts unnerving surprises, makes unwarranted assumptions, encounters entirely new demands on his time and imagination, makes decisions in ignorance, and learns from his mistakes.

Specialist to Generalist

Harald’s immediate challenge was shifting from leading a single function to overseeing the full set of business functions. In his first couple of months, this shift left him feeling disoriented and less confident in his ability to make good judgments. And so he fell into a classic trap—overmanaging the function he knew well and undermanaging the others. Fortunately for Harald, this became crystal clear when his vice president of HR gave him some blunt feedback about his relationship with his sales and marketing VP: “You are driving Claire crazy. You need to give her some space.”

Harald’s tendency to stay in his functional comfort zone is an understandable reaction to the stresses of moving up to a much broader role. It would be wonderful if newly appointed enterprise leaders were world-class experts in all business functions, but of course they never are. In some instances they have gained experience by rotating through various functions or working on cross-functional projects, which certainly helps. (See the sidebar “How to Develop Strong Enterprise Leaders.”) But the reality is that the move to enterprise leadership always requires executives who’ve been specialists to quickly turn into generalists who know enough about all the functions to run their businesses.

What is “enough”? Enterprise leaders must be able to (1) make decisions that are good for the business as a whole and (2) evaluate the talent on their teams. To do both they need to recognize that business functions are distinct managerial subcultures, each with its own mental models and language. Effective leaders understand the different ways that professionals in finance, marketing, operations, HR, and R&D approach business problems, and the various tools (discounted cash flow, customer segmentation, process flow, succession planning, stage gates, and the like) that each discipline applies. Leaders must be able to speak the language of all the functions and translate for them when necessary. And critically, leaders must know the right questions to ask and the right metrics for evaluating and recruiting people to manage areas in which they themselves are not experts.

The good news for Harald was that, in addition to assigning him to a high-performing unit, his company had strong systems in place for evaluating and developing talent in key functions. These included well-crafted systems for performance reviews and 360-degree feedback, and for collecting input from corporate functions. His heads of finance and HR, for instance, while reporting directly to him, also had dotted-line reporting relationships with their respective corporate departments, which assisted Harald with their evaluation and development. So he had plenty of resources to help him understand what “excellence” meant for each function.

By investing directly in creating standardized evaluation schemes for each function, companies can ensure that new enterprise leaders get the lay of the land faster. But even if their firms don’t have such systems, aspiring enterprise leaders can prepare themselves by building relationships with colleagues in other functions, seeking to learn from them (perhaps in exchange for insight into their own functions) so that they can develop their own templates.

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Here is a direct link to the complete article.

Michael D. Watkins is Professor of Leadership and Organizational Change at IMD. He has spent the last two decades working with leaders as they transition to new roles, build their teams and transform their organizations.

Watkins is author of the international bestseller The First 90 Days: Proven Strategies for Getting Up to Speed Faster and Smarter, which The Economist recognized as “the on-boarding bible.” With more than 1,000,000 copies sold in English, and translations in 24 languages, The First 90 Days has become the classic reference for leaders in transition and a standard resource of leading change. In 2011, it was named one of the best 100 business books of all time 800-CEO-Read. Amazon declared it “one of the 100 best leadership & success books to read in your lifetime.”

There is no other business thinker I now hold in higher regard.

 

 

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