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 other managers. It truly is different at the top. To find out how, Michael D. Watkins the co-founder of Genesis Advisers, a leadership development firm specializing in on boarding and transition acceleration, and author of The First 90 Days and Your Next Move, 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. Here is an overview of what he found in his research.
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Management Roles and Responsibilities
To make the transition successfully, executives must navigate a tricky set of changes in their leadership focus and skills, which Michael Watkins calls 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. Many have trouble negotiating most of these shifts.
Specialist to Generalist
An immediate challenge is shifting from leading a single function to overseeing the full set of business functions. This shift often leaves the person feeling disoriented and less confident in his ability to make good judgments. Many fall into a classic trap—overmanaging the function he knew well and under managing the others.
The tendency is to stay in a functional comfort zone. This 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. 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.
How to Develop Strong Enterprise Leaders
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 is that all this can be avoided by putting into place a methodology for evaluating and developing talent in key functions. Example include well-crafted systems for performance reviews and 360-degree feedback, and for collecting input from employees and other corporate functions.