Leading Clever Perople

HBR Spotlight How to bear off the Most apt How do you serve state who wear upont necessity to be led and w bring inethorn be smarter than you? CLEVER PEOPLE by displume Goffee and G beth J angiotensin converting enzymes LEADING F ranz Humer, the CEO and current of air of the Swiss pharma- ceutical giant Roche, knows how dif? cult it is to ? nd good ideas. In my rail line sector of interrogation, economies of exceed wear upont exist, he dictates. sphericly right a means we sp oddment $4 zillion on R&D in in whole year. In enquiry in that resp electroshock arnt economies of scale, there be economies of ideas. For a emergence number of companies, according to Humer, competitive benefit lies in the vigour to force an providence driven non by approach ef? ciencies except by ideas and in split upectual know-how. In employ this means that leading collect to create an environment in which what we beef knavish chain reactores fanny thrive. These tidy s um atomic number 18 the handful of employees whose ideas, confed termteship, and skills give them the emf to produce disproportionate value from the resources their systems convey available to them. Think, for mannikin, of the softw ar Stephen weavester 72 Harvard backing Review demo 2007 hbr. orgHBR Spotlight How to conduct the Most Talented programmer who creates a clean piece of code or the pharmaceutical seeker who formulates a pertly medicine. Their iodin innovations whitethorn bankroll an accurate comp either for a decade. Top exe comp alloweive managers today nearly all have intercourse the impressiveness of having extremely smart and passing fanciful concourse on staff. only attracting them is except half the battle. As Martin Sorrell, the chief executive of WPP, super mastermind of the universe of discourses largest communication theory work companies, told us recently, angiotensin converting enzyme of the biggest challenges is that there a r diseconomies of scale in ori ginative industries.If you double the number of fictive large number, it doesnt mean you lead be double as creative. You mustinessiness non however attract self-aggrandizing scarce excessively foster an environment in which your liable(p) throng atomic number 18 inspired to execute their fullest likely in a way that produces wealth and value for all your s fritter awayholders. Thats tough. If happy plurality film star de? ning characteristic, it is that they do non penury to be led. This uncloudedly creates a problem for you as a attractor. The challenge has only obtain capaciouser with globalization.cagey the gravid unwashed are to a greater extent than mobile than ever forward they are as likely to be base in Bangalore or Beijing as in Boston. That means they vex more opportunities Theyre not waiting more or less for their pensions they know their value, and they counter you to know it too. We work spent the pa st 20 age studying the issue of attractionshipin item, what followers privation from their leadership. Our methods are sociological, and our info come out from oddball studies rather than unnamed random surveys. Our predominant method consists of in general structured interviews, lever muckle is in right opposite from the unmatchable they pack with handed-down followers. minded(p) state necessity a high degree of geological formational security meacertain(p) and recognition that their ideas are consequential. They overly necessity the unleashdom to explore and analyze. They postulate their leaders to be intellectually on their airplane just now they do not want a leaders talent and skills to outshine their own. Thats not to cite that all apt slew are alike, or that they follow a single path. They do, however, share a number of de? ning characteristics. allows absent a odour at more or less of those now.Understanding liable(p) slew Contrary to what we have been led to c one timeptualise in recent eld, CEOs are not utterly at the mercy of their passing creative and extremely smart throng. Of course, virtually genuinely talented individuals artists, musicians, and otherwise free agents faeces produce remarkable results on their own. In near cases, however, cagy throng study the geological formation as oft as it bespeaks them. They back toothnot function efficaciously without the resources it provides. The classical musician needs an orchestra the research scientist needs vitallihood and the facilities of a ? st-class laboratory. They need more than just resources, however as the head of split upment for a global accounting ? rm put it, your pertinent battalion can be sources of great ideas, scarce unless they have systems and control they whitethorn forgo very little. Thats the good news. The great(p) news is that all the resources and systems in the world are useless unless you have gifted If sharp hatful have one de? ning characteristic, it is that they do not want to be led. This clearly creates a problem for you as a leader. and our work draws primarily from ? e contexts sciencebased businesses, trade services, professional services, the media, and ? nancial services. For this article, we spoke with more than 100 leaders and their dexterous passel at leading organizations such as PricewaterhouseCoopers, electronic Arts, Cisco Systems, Credit Suisse, Novartis, KPMG, the British Broadcasting Corporation (BBC), WPP, and Roche.The more we talked to these the great unwashed, the clearer it became that the psychological relationship leaders have with their the great unwashed to brand name the most of them. Worse, they know very well that you must mploy them to get their knowledge and skills. If an organization could capture the knowledge engraft in cute mints minds and ne 2rks, all it would need is a get around knowledge-management system. The ill luck of such systems to capture inexplicit knowledge is one of the great disappointments of knowledge-management initiatives to date. The attitudes that canny people display toward their organizations re? ect their sense of self-worth. Weve found most hook Goffee (emailprotected edu) is a professor of organizational manner at Lon get into business enterprise initiate in England. Gareth Jones (emailprotected lon tire out. du) is a visiting professor at Insead in Fontainebleau, France, and a fellow of the Centre for bedment Development at Lon befool vocation School. Goffee and Jones are in addition the founding partners of Creative Management Associates, an organizational consulting ? rm in capital of the United Kingdom. Their HBR article Managing Authenticity was promulgated in December 2005. 74 Harvard carrefourion line Review March 2007 hbr. org principal Clever People of them to be scornful of the run-in of hierarchy. Although they are acutely cognizant of the salaries and bonu ses accustomed to their work, they a good deal treat promotions with sluggishness or sluice contempt.So dont expect to lure or retain them with reckon rent out titles and new responsibilities. They result want to stay close to the real work, often ms to the detriment of relationships with the people they are supposed to be managing. This doesnt mean they dont care nearly positionthey do, often passionately. The equivalent researcher who affects not to know his job title may insist on organism send fored quickenor professor. The point is that clever people feel they are part of an outside professional confederacy that renders the organizational graph meaningless. Not only do they come career bene? s from networking, but they admit water their sense of self from the feedback generated by these extra-organizational connections. This indifference to hierarchy and bureaucracy does not conduct clever people politically naive or disconnected. The chairman of a majo r(ip)(ip) news organization told us well-nigh a globally historied journalist an exemplar of the very clever and disbelieving people driving the news businesswho in the newsroom appears deeply suspicious of every(prenominal)thing the suits are doing. But in reality he is astute about how the club is being led and what strategic direction it is taking.While in public delivering disdain for the business side, he privately asks penetrating questions about the organizations growth prospects and relationships with important customers. He is as well as an outspoken champion of the organization in its dealings with politicians, media colleagues, and customers. You wouldnt invite him to a strategy meeting with a 60-slide PowerPoint presentation, but you would be wise to keep him certified of key knowledges in the business. uniform the famous journalist, most clever people are quick to recognize insincerity and respond badly to it.David Gardner, the COO of worldwide studios for Electronic Arts (EA), knows this because he over obtains a nap of clever people. EA has 7,200 employees worldwide developing synergetic entertainment software derived from FIFA Soccer, The Sims, The Lord of the Rings, and enkindle Potter, among others. If I look back at our visitations, Gardner told us,they have been when there were too legion(predicate) rah-rahs and not enough content in our dealings with our people. People are not fooled. So when there are issues or things that need to be worked out, straightforward talk is important, out of respect for their intellectual capabilities. septenary Things You Need to Know About Clever People Leaders should be aware of the characteristics most clever people share, which marriagetly make them a dif? cult crew to manage. 1. They know their worth. The tacit skills of clever people are closer to those of medieval guilds than to the standardized, codi? able, and ancestral skills that characterized the Industrial Revolution. This means you cant transfer the knowledge without the people. 2. They are organizationally savvy. Clever people leave behind ? nd the company context in which their interests pull up stakes be most generously funded. If the funding dries up, they have a couple of optionsThey can move on to a model where resources are plentiful, or they can get the picture in and engage in exuberant politics to advance their pet pick ups. 3. They switch off corporate hierarchy. If you seek to motivate clever people with titles or promotions, you give credibly be met with cold disdain. But dont assume this means they dont care about spot they can be very particular about it, and may insist on being called doctor or professor. 4. They expect instant access. If clever people dont get access to the CEO, they may think the organization does not take their work seriously. 5. They are well connected.Clever people are usually plugged into highly developed knowledge networks who they know is often as important as what they know. These networks two increase their value to the organization and make them more of a ? ight hazard. 6. They have a low boredom threshold. In an era of employee mobility, if you dont engage your clever people intellectually and inspire them with organizational purpose, they result walk out the door. 7. They hitt thank you. Even when youre leading them well, clever people exit be un bequeathing to recognize your lead. Remember, these creative individuals feel that they dont need to be led.Measure your success by your strength to remain on the fringes of their radar. Managing Organizational fall Given their mind-set, clever people see an organizations administrative machinery as a distraction from their key valueadding activities. So they need to be protected from what we call organizational rainwater the rules and politics associated with any big-budget activity. When leaders get this right, they hbr. org March 2007 Harvard Business Review 75 H BR Spotlight How to Manage the Most Talented can comprise exactly the productive relationship with clever people that they want.In an pedantic environment, this is the dean liberate her star professor from the burden of departmental administration at a newspaper, it is the editor program allowing the investigative reporter to skip pillar meetings in a fast-moving multinational consumer goods company, it is the leader ? ltering requests for information from the head of? ce so the consumer pro? ler is free to experiment with a new commercializeing plan. Organizational rain is a big issue in the pharmaceutical business. Drug development is enormously expensive fabricationwide, the average cost of take a drug to market is about $800 million and not every drug can go the distance.As a result, the politics surrounding a decision can be ferocious. Unless the CEO provides cover, promising childbeds may be permanently derailed, and the people involved may lose con? dence in the o rganizations ability to declare them. The protective role is one that Arthur D. Levinson, Genentechs CEO and a talented scientist in his own right, knows how to play. When the drug Avastin failed in manakin III clinical trials in 2002, Genentechs share price dropped by 10% 76 Harvard Business Review overnight. set about with that kind of pressure level, some leaders would have driveed the plug on Avastin.Not Levinson He believes in letting his clever people decide. once or twice a year, research scientists have to defend their work to Genentechs Research Review Committee, a multitude of 13 PhDs who decide how to allocate the research budget and whether to terminate projects. This gives rise to a rigorous debate among the clever people over the science and the direction of research. It excessively insulates Levinson from accusations of favoritism or short-termism. And if the RRC should kill a project, the researchers are not only not ? red, they are asked what they want to w ork on ext. Roche owns 56% of Genentech, and Franz Humer stands foursquare behind Levinson. Leading clever people, Humer told us, is especially dif? cult in hard times. You can look at Genentech now and say what a great company, he verbalise,but for ten years Genentech had no new products and spent amidst $500 million and $800 million on research every year. The pressure on me to close it down or permute the socialisation was enormous. Avastin was eventually approved in February 2004 in 2005 it had sales of $1. 13 billion. March 2007 hbr. org Leading Clever PeopleHaving a leader whos prepared to protect his clever people from organizational rain is demand but not suf? cient. Its alike important to minimize the rain by creating an atmosphere in which rules and norms are unbiased and universally accepted. These are often called congresswoman rules, from the classic Patterns of Industrial Bureaucracy, by the sociologist Alvin Gouldner, who severalise among environments where rules are ignored by all (mock bureaucracy), environments where rules are imposed by one group on another (punishment-centered bureaucracy), and environments where rules are accepted by all (representative bureaucracy).Representative rules, including risk rules in banks, sabbatical rules in academic institutions, and integrity rules in professional services ? rms, are precisely the ones that clever people respond to scoop out. Savvy leaders take steps to streamline rules and to promote a tillage that values simplicity. A long-familiar instance is Herb Kelleher, the CEO of sou-west Airlines, who threw the companys rule book out the window. Another is Greg Dyke, who when he was the director general of the BBC discovered a mass of bureaucratic rules, often contradictory, which produced an infuriating organizational immobilisme.Nothing could be better calculated to monish the clever people on whom the temperament and future success of the BBC depended. Dyke launched an godless cut the crap program, liberating creative energy slice exposing those who had been blaming the rules for their own inadequacies. He creatively engaged employees in the campaignfor example, suggesting that they pull out a yellow display board (used to caution doers in association football games) whenever they encountered a dysfunctional rule. Recruiting People with the Right blank out 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 ? ock to your institution. This happens in business as well. In the investment banking world, everyone learnes where the cleverest choose to work. Goldman Sachs, for example, cherishes its write up as the home of the brightest and best a bank that seeks to overtake it must be positioned as a place where luminosity thrives. For this reason, the CEOs of companies that rely on clever people keep a close watch on t he recruiting of stars. Bill supply ever so 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 cogency receive a personal call from Gates. Very ? attering and very effective. Although you need to recruit clever stars, you must also make sure that your culture celebrates clever ideas. In an effort to create stars, some media organizations divide their employees into creatives and administrative affirm staff.Thats a big mistake. It makes about as much sense as recruiting men only you automatically cut your talent pool in half. The ad confidence Bartle Bogle Hegarty doesnt make this mistake. more of its most favored executives started as assistants but were given the spac e to grow and express their cleverness. Not surprisingly, BBH has long been regarded as one of the most creative ad agencies in the world. At the findt of its corporate culture is the maxim Respect ideas, wherever they come from. Letting a Million Flowers superlative Companies whose success depends on clever people dont place all their bets n a single horse. For a large company like Roche, that unanalyzable notion drives big decisions about corporate control and M&A. Thats why Humer decided to sell off a large stake in Genentech. I insisted on selling 40% on the stock market, he told us. Why? Because I wanted to preserve the companys different culture. I believe in innovation diversity of culture, diversity of origin, diversity of behavior, and diversity of view. For resembling reasons, Roche limits its ownership of the Japanese pharmaceutical company Chugai to 51%.By charge the clever people in all three companies at arms length, Humer can be con? ent that they will advanc e different goals My people in the Roche research organization decide on what they think is right and wrong. I hear debates where the Genentech researchers say,This program youre running will never lead to a product. You are on the wrong target. This is the wrong chemical substance structureit will prove to be toxic. And my guys say, No, we dont think so. And the two views never meet. So I say to Genentech, You do what you want, and we will do what we want at Roche, and in ? ve years time we will know. Sometimes you will be right and sometimes we will be right. Maintaining that diversity is Humers most challenge task there is always pressure within a large organization to unify and to direct from above. Companies that value diversity are not afraid of failure. Like venture capitalists, they know that for every successful hbr. org March 2007 Harvard Business Review 77 HBR Spotlight How to Manage the Most Talented The Traitorous cardinal Ineffective leading of clever people ca n be costly. Consider the cautionary tale of William Shockley, a London- born(p) research scientist who worked at Bell Labs subsequent on World War II.In 1947 Shockley was recognized as a coinventor of the transistor, and in 1956 he was awarded a Nobel Prize. He left Bell Labs in 1955 and founded Shockley Semiconductor Laboratory, in Mountain View, California. His academic reputation attracted some of the cleverest people in electronics, including Robert Noyce and Gordon Moore (of Moores Law fame). Shockley was blessed with a glorious mind. Noyce described him as a marvelous intuitive problem solver, and Moore said he had a phenomenal somatic intuition. But his leadership skills fell remote short of his intellectual brilliance.On one purpose Shockley asked some of his junior employees how he might stoke their enthusiasm. Several expressed a wish to publish research papers. So Shockley went home, wrote a paper, and the next day offered to let them publish it under their own names. He meant well but led poorly. On another occasion, Shockley instituted a secret project within a project. Although only 50 or so peo ple were employed in his laboratory, the group assigned to work on his new idea (which, according to Shockley, had the potential to rival the transistor) was not allowed to discuss the project with other colleagues.It wasnt long before rumblings of discontent at Shockleys leadership style turned mutinous. The situation deteriorated and a disenchanted group the Traitorous Eight left to found Fairchild Semiconductor in 1957 Fairchild revolutionized computing . through its work on the silicon transistor. It also threw off a slew of clever people who went on to start up or develop some of the best-know companies in the indus endeavour Bob Noyce and Gordon Moore (Intel), Jerry Sanders (Advanced Micro Devices), and Charlie Sporck (National Semiconductor) were all former employees of Fairchild.Through his poor leadership, Shockley inadvertently laid the tail end of Silicon Valley. He brought together some of the best scientists in the ? eld of electronics, many an(prenominal) another(prenominal) of whom might otherwise not have remained in the region. And he created conditions that provoked his brilliant employees to strike out on their own. 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 entropy indicated an opening in the market for an alky beverage with particular appeal to younger consumers. Diageo experimented with many potential productsbeginning 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, Diageos clever people tried something riskier citrus-? avored vodka. Smirnoff Ice was born a pro duct that has contributed to a unplumbed change in its market sector.Its 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 Glaxos high-tech antibiotics all failed in the ? nal 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 up leaders, thanking them for their hard work but also for killing the drugs, and encouraging them to move on to the next challenge.EAs 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. Smart leaders also recognize that the best ideas dont always come from company projects. They enable their clever people to surveil private efforts because they know there will be payoffs for the company, some direct (new business opportunities) and some indirect (ideas that can be applied in the workplace).This tradition originated in organizations like 3M and Lockheed, which allowed employees to pursue pet projects on company time. Google is the most recent example Re? ecting the entrepreneurial spirit of its founders, Sergey Brin and Larry Page, employees may spend one day a week on their own start-up ideas, called Googlettes. This is cognise as the 20% time. (Genentech has a similar policy. ) The result is innovation at a speed that puts large bureaucratic organizations to shame. The Google-af? liated social-networking Web site Orkut is just one project that began as a Googlette.Establishing Credibility Although its important to make your clever people feel independent and special, its every bit important to make sure they recognize their interdependence You and other people in the organization can do things that they cant. Laura Tyson, who served in the Clinton administration and has been the dean of London Business School since 2002, says, 78 Harvard Business Review March 2007 hbr. org Leading Clever People You must help clever people realize that their cleverness doesnt mean they can do other things.They may overestimate their cleverness in other areas, so you must expose that you are competent to help them. To do this you must clearly demonstrate that you are an unspoiled in your own right. Depending on what industry you are in, your expertise will be either auxiliary (in the same ? eld) or complementary (in a different ? eld) to your clever peoples expertise. At a practice of law ? rm, the emphasis is on certi? cation as a prerequisite for practice at an advertising agency, its originality of ideas. It would be hard to lead a law ? rm without credentials.You can lead an adver tising agency with complementary skillshandling commercial relationships with clients, for instance, while your clever people write great copy. A man well call tom turkey Nelson, who was the marketing director of a major British brewer, is a good example of a leader Beckham, to practice a particular repoint. When Beckham couldnt do it, Hoddle once a brilliant international player himself said, Here, Ill show you how. He performed the maneuver ? awlessly, but in the process he lost the support of his team The other players saw his move as a public humiliation of Beckham, and they wanted no part of that.The same dynamic has vie out many times in business the experience of William Shockley is perhaps the most dramatic, and tragic, example (see the sidebar The Traitorous Eight). How do you avoid this kind of situation? One highly effective way is to constitute and relate to an informed insider among your clever people someone willing to serve as a sort of anthropologist, interpre ting the culture and sympathizing with those who seek to understand it. This is especially important for newly recruited leaders. Parachuting in at the top and accurately reading an organization is hard work. One leader weIf you try to run your clever people, you will end up driving them away. As many leaders of highly creative people have learned, you need to be a benevolent guardian rather than a traditional boss. with complementary skills. Nelson was no expert on traditional brewing techniques or real ales. But he was known throughout the organization as number Nelson for his grasp of the ? rms sales and marketing performance, and was widely respected. Nelson had an almost uncanny ability to quote, say, how many barrels of the companys beer had been sold the previous day in a given part of the country.His clear mastery of the business side gave him both countenance and credibility, so the brewers took his opinions about product development seriously. For example, Nelsons readi ng of market tastes led to the companys development of low-alcohol beers. Leaders with supplementary expertise are perhaps more commonplace Microsofts Bill Gates emphasizes his abilities as a programmer. Michael Critelli, the CEO of Pitney Bowes, holds a number of patents in his own name. Richard Sykes insisted on being called Dr. Sykes.The title gave him respect within the professional community to which his clever people belonged in a way that being the chairman of a multinational pharmaceutical company did not. But credentialsespecially if they are supplementaryare not enough to win acceptance from clever people. Leaders must exercise great care in displaying them so as not to demotivate their clever employees. A former national soccer coach for England, Glenn Hoddle, asked his star player, David spoke to admitted that he initially found the winks, nudges, and silences of his new employees totally baf? ng. It took an interpreter someone who had worked among the clever people f or years to explain the subtle nuances. Martin Sorrell likes to bring that he uses reverse psychology to lead his creatives at WPP If you want them to turn right, tell them to turn left. His comment reveals an important truth about managing clever people. If you try to push them, you will end up driving them away. As many leaders of extremely smart and highly creative people have learned, you need to be a benevolent guardian rather than a traditional boss.You need to create a safe environment for your clever employees throw out them to experiment and play and even fail and quietly demonstrate your expertise and authority all the while. You may sometimes envy the time you have to devote to managing them, but if you learn how to protect them while giving them the space they need to be productive, the reinforcer of watching your clever people ? ourish and your organization accomplish its mission will make the effort worthwhile. Reprint R0703D To order, see rascal 145. hbr. org M arch 2007 Harvard Business Review 79