General Management Assignment_rituraj Singh.pdf

DEPARTMENT OF COMMERCE, DELHI SCHOOL OF ECONOMICS UNIVERSITY OF DELHI

SUBJECT: General Management CASE STUDY: LEADING CLEVER PEOPLE Under the guidance of: Dr. Urvashi Sharma Submitted by: Rituraj Singh MBA - HRD

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Case Study: Leading Clever People This case study explains that how clever people can be leaded in any organization. It is a very common characteristic of clever people that they do not like to be leaded by any person and demand their own space. In such cases it becomes very difficult for the leaders to ensure a right mix of authoritative and supportive leadership in which the clever people can thrive. Top executives today nearly all recognize the importance of having extremely smart and highly creative people on staff. But getting people on board is only half the battle won and it takes huge amount of effort to retain this talent. It further explains that not only organizations require clever people badly but the clever people also require the organization, because the amount of resources or the security in terms of financial stability which these organizations provide to clever people is also necessary. Another aspect about clever people is that they see an organization’s administrative machinery as a distraction from their key value-adding activities. They feel that all this organizational hierarchy works as a road block in their process of achieving their goals. It also states that the organization must provide due support and freedom to the clever employees in order to help them develop new product and innovative ideas which will eventually help the organization in the longer run. They should be given the freedom and support to try and fail for plenty of times. It also makes us understand that clever people acts as a magnet in any organization and recruiting clever people makes way for more such people in the organization.

1. Understanding the mind and thought process of clever people: Clever people are the need of the hour. Today, in the era of creative destruction, companies are looking for creative people so that they can come up with some great ideas that can be introduced in the market. But CEOs also understand that with such clever people comes their behavioral traits as well which can be difficult for a team to manage. Generally, it is seen that these people lack certain discipline and do not believe in following rules and regulations which can be detrimental for the team performance. In most cases, however, clever people need the organization as much as it needs them. They cannot function effectively without the resources it provides. On the part of the organization, the problem lies in the fact that all the resources and systems in the world are useless unless you have clever people to make the most of them. Worse, they know very well that you must employ them to get their knowledge and skills. If an organization could capture the knowledge embedded in clever people’s minds and networks, all it would need is a better knowledge-management system which is a bleak possibility in the current scenario and hence the reliability on such individuals increases for a company. Any sizable company produces some number of strategies, projects, processes, promotions, and other activities that don’t make sense. No large organization achieves perfection. As a 2

result, a company needs lots of smart, super engaged employees who can identify its particular weaknesses and help it improve them. However, sometimes really smart employees develop agendas other than improving the company. Rather than identifying weaknesses, so that he can fix them, he looks for faults to build his case. Specifically, he builds his case that the company is hopeless and run by a bunch of morons. The smarter the employee, the more destructive this type of behavior can be. Simply put, it takes a really smart person to be maximally destructive, because otherwise nobody else will listen to him. In Drive: The Surprising Truth About What Motivates Us, Daniel Pink highlights the importance of creating an environment where people can develop personal mastery in their work, which he says is one of the core elements of intrinsic motivation. Peter Senge in The Fifth Discipline calls such an environment a “learning organization.” It’s one of the key differences that sets apart high performing teams and companies. This means the whole organization relies upon the knowledge of individuals, where teams learn from each other and learn together with every project. This also means hiring the smartest people — smarter than their managers even — you can find to set a learning organization in motion. Some real icons in the business world agree: Eric Schmidt, the executive chairman of Google, states that you should never hire “people you can’t learn from or be challenged by.” Sheryl Sandberg, on the podcast Master’s of Scale, said “you do want to hire people who are better than you are.” Steve Jobs famously quipped, “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.” Lee Iacocca once said, “I hire people brighter than me and get out of their way.” Jeff Bezos swears by this hiring approach: “every time we hire someone, he or she should raise the bar for the next hire, so that the overall talent pool is always improving.” The problem is that these people know their self-worth and hence feel their talent is not restricted to a particular job. These types of employees should be reminded from time to time that how much they also require the job so that they follow certain rules and frameworks. This is the first issue of concern for the leader that how the behavior of these employees should be controlled.

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2. Managing Smart employees: Smart people are often scornful of the language of hierarchy. Although they are acutely aware of the salaries and bonuses attached to their work, they often treat promotions with indifference or even contempt. So don’t expect to lure or retain them with fancy job titles and new responsibilities. They will want to stay close to the “real work,” often to the detriment of relationships with the people they are supposed to be managing. This doesn’t mean they don’t care about status—they do, often passionately. The same researcher who affects not to know his job title may insist on being called “doctor” or “professor.” The point is that clever people feel they are part of an external professional community that renders the organizational chart meaningless. Not only do they gain career benefits from networking, but they construct their sense of self from the feedback generated by these extra-organizational connections. Given their mind-set, clever people see an organization’s administrative machinery as a distraction from their key value-adding activities. So they need to be protected from what we call organizational “rain”—the rules and politics associated with any bigbudget activity. When leaders get this right, they can establish exactly the productive relationship with clever people that they want. In an academic environment, this is the dean freeing her star professor from the burden of departmental administration; at a newspaper, it is the editor allowing the investigative reporter to skip editorial meetings; in a fast-moving multinational consumer goods company, it is the leader filtering requests for information from the head office so the consumer profiler is free to experiment with a new marketing plan. One of the biggest benefits to hiring smarter people is that they don’t require you to micromanage everything that they do. Phil Libin, CEO of Evernote, wrote a guest article in Inc. stating that he became severely overwhelmed early in his career, because he believed that he could do all of his employees’ jobs much better than them. He tried to handle all of their tasks on his own, but eventually accepted that his employees were much better at their jobs than he would ever be. He also realized that allowing gifted employees to do their jobs without micromanaging is necessary to maintaining employee satisfaction. This is an important lesson in the modern world, where 75% of employees voluntarily leave their organizations due to friction with controlling managers. Libin’s post should be eye-opening for the many entrepreneurs that are pushing themselves to the brink of exhaustion. Managers often believe that they’re the only person in the organization that’s qualified to do the job properly. But think about it… If you burn yourself out, you’re going to wind up unable to do even your most important tasks effectively. Micromanaging can also quickly erode employee motivation. Christina Bielaszka-DuVernay wrote a blog post in Harvard Business Review detailing this very phenomenon. She stated, “Because a consistent pattern of micromanagement tells an employee you don’t trust his work or his judgment, it is a major factor in triggering disengagement.” 4

Of course, the organization can only grow if you hire people that are better at their jobs than you. Libin said that the quality of his team’s output was much higher after he ensured the best person handled every task. He even concluded his post by stating: “Many readers will have just realized that this means the CEO is the dumbest person at Evernote. Please don’t tell my board.” Thus, leaders can make the smart person responsible for the job of the entire team so that the output of the whole team increases and the hierarchy of the organization is also not compromised because ultimately it is the performance and output that matters rather than the hierarchy followed to achieve that performance.

3. Realizing employee freedom needs: Companies that value diversity are not afraid of failure. Like venture capitalists, they know that for every successful new pharmaceutical product, dozens have failed; for every hit record, hundreds are duds. The assumption, obviously, is that the successes will more than recover the costs of the failures. Take the case of the drinks giant Diageo. Detailed analysis of customer data indicated an opening in the market for an alcoholic beverage with particular appeal to younger consumers. Diageo experimented with many potential products—beginning with predictable combinations like rum and coke, rum and blackcurrant juice, gin and tonic, vodka and fruit juice. None of them seemed to work. After almost a dozen tries, Diageo’s clever people tried something riskier: citrus-flavored vodka. Smirnoff Ice was born—a product that has contributed to a fundamental change in its market sector.It’s easy to accept the necessity of failure in theory, but each failure represents a setback for the clever people who gambled on it. Smart leaders will help their clever people to live with their failures. Some years ago, when three of Glaxo’s high-tech antibiotics all failed in the final stages of clinical trial, Richard Sykes— who went on to become chairman of Glaxo Wellcome and later of GlaxoSmithKline—sent letters of congratulation to the team leaders, thanking them for their hard work but also for killing the drugs, and encouraging them to move on to the next challenge. EA’s David Gardner, too, recognizes that his business is “hit driven,” but he realizes that not even his most gifted game developers will always produce winners. He sees his job as supporting his successful people—providing them with space and helping them move on from failed projects to new and better work. Steve Jobs, who was famous for his hiring and recruiting practices, believed a small team of A+ players could run circles around a giant team of B and C players. He was thoroughly convinced that the quality of the team was everything. Many leaders are reluctant to hire as Jobs did. They settle for dependable but less stellar teams—in part because they feel threatened or intimidated at the prospect of leading someone smarter than they are. Thus, giving them freedom is the best way to get the best out of them otherwise interpersonal problems are bound to arise. Also they should be made responsible for a team so that they become equally responsible for the team and hence they are more cooperative with the 5

manager or leader. Then he will also put his full efforts to complete the task and rather than being a hindrance he will perform to his full capacity.

4. Diversity – To compliment the required skill set: Depending on what industry you are in, your expertise will be either supplementary (inthe same field) or complementary (in a different field) to your clever people’s expertise. At a law firm, the emphasis is on certification as a prerequisite for practice; at an advertising agency, it’s originality of ideas. It would be hard to lead a law firm without credentials. You can lead an advertising agency with complementary skills—handling commercial relationships with clients, for instance, while your clever people write great copy. Although it’s important to make your clever people feel independent and special, it’s equally important to make sure they recognize their interdependence: You and other people in the organization can do things that they can’t. Laura Tyson, who served in the Clinton administration and has been the dean of London Business School since 2002, says, “You must help clever people realize that their cleverness doesn’t mean they can do other things. They may overestimate their cleverness in other areas, so you must show that you are competent to help them.” To do this you must clearly demonstrate that you are an expert in your own right. According to Gallup research, the second most common mistake that leads to turnover is lack of communication. While the smartest people in the building tend to be lone rangers and want to do things their way at times, managers must step out of their own comfort zones to provide them with guidance and direction, give them regular feedback on their performance, confront them when needed, and clarify goals and expectations, especially during change. This is also a two-way street. When managers don't solicit the opinions of their smartest team members, trust begins to erode. They need to listen to their people receptively and without judgment about their concerns, passions, fears, joys, goals, and aspirations so they feel validated and understood. Lastly, a culture of collaborative approach should be followed so that the smart employee understands the importance of team dynamics and that his expertise will be useful only in a particular area and so he requires the whole team to complete the task. Hence, interpersonal conflicts will reduce in this way.

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5. Hiring the right talent: Clever people require a peer group of like-minded individuals. Universities have long understood this. Hire a star professor and you can be sure the aspiring young PhDs in that discipline will flock to your institution. This happens in business as well. In the investment banking world, everyone watches where the cleverest choose to work. Goldman Sachs, for example, cherishes its reputation as the home of the brightest and best; a bank that seeks to overtake it must be positioned as a place where cleverness thrives. For this reason, the CEOs of companies that rely on clever people keep a close watch on the recruiting of stars. Bill Gates always sought out the cleverest software programmers for Microsoft. From the start, Gates insisted that his company required the very best minds; he understood that they act as a magnet for other clever people. Sometimes he intervened personally in the recruitment process: A particularly talented programmer who needed a little additional persuasion to join the company might receive a personal call from Gates. The consequences of hiring the wrong people can be disastrous. Unfortunately, many entrepreneurs don’t recognize the potential costs of their bad hiring decisions until it’s too late. Tony Hsieh, the CEO of Zappos, claims that bad hiring decisions have cost his company over $100 million. Hsieh said that one of the changes Zappos implemented to address this issue was having two sets of interviews that every candidate needed to pass. Not only did they have to pass an interview with a hiring manager to see if they had the right qualifications for the job, they were required to go through a separate interview with the HR department to ensure they were the right fit for the company culture. Having two separate interviews ultimately reduced the risk that an individual manager would campaign against a talented candidate that could threaten their ego, solving many of the problems Hsieh described in the quote above. Thus, hiring should be kept in check so that a team is built which can gel well rather than different individuals who are excellent as different segments but dysfunctional as a team. This is a cost to the company in terms of hiring, time and effort so hire smartly. Also make sure that individuals can easily align with the company culture and hence limitations of the company in terms of hiring smart people should also be checked. May be you don’t require a smart employee because of the profile for which you are hiring and hence accordingly decision is to be taken.

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