What Makes an Effective General Manager? by@benedikt.herudek

What Makes an Effective General Manager?

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The question resembles the question ‘what makes an effective politician?*’ where the answer(s) differ so wildly as to what people want to see in personality, standpoints, and qualifications. We have come to a simple mechanism for answering the question: we vote, we ask people for their opinion, and acknowledge answers are subjective and opinions will differ. By no means is this a perfect way to tackle the issue, e.g., we might lament that pure rhetorics gives an advantage in campaigning but doesn’t translate to great governance.
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Conclusively answering the question raised in the title of this small essay is not possible by objective standards and scientific methods. There are too many opinions and subjective criteria involved. Even setting up measuring (e.g., effective is whoever increases revenue or employee retention) is a nontrivial undertaking with inconclusive results.


The question resembles the question ‘what makes an effective politician?’ where the answer(s) differ so wildly as to what people want to see in personality, standpoints, and qualifications that we have come to a simple mechanism for answering the question: we vote, we ask people for their opinion, and acknowledge answers are subjective and opinions will differ.


By no means is this a perfect way to tackle the issue, e.g., we might lament that pure rhetorics gives an advantage in campaigning but doesn’t translate to great governance; financial means help to win elections, and often interests, that are short-sighted or selfish, win in an election. While those are all valid points, there are some good reasons relevant to our context:


  1. Wisdom of communities: Many often see more than the few, when it is about judging someone’s qualifications. It can well be an advantage that the elected city mayor candidate is known by many over many years. Neighbors, friends and family can judge what person they vote for and if (s)he is able to ‘get the job done.


  2. Rotation of power: Elections lend power over time, typically to spend a budget and often to build or staff organizations. Some elected representatives do not perform or abuse their position to create positions for friends or spend budget which is not in the interest of the community. Being able to replace leaders every term is helpful to keep power abuse in check.


  3. Understand what you govern: Having a significant amount of elected representatives work in ‘normal jobs’ should, as a whole, help them understand complex issues, show empathy, and overall make better decisions. Not all representatives must have that but it seems a good idea that some or many have these ‘reality checks’ throughout their careers.


It is important to note that elected politicians cannot just do what they want: A member of parliament reports to a ‘whip’ which ‘reports’ to its government. A government is often part of international alliances, subject to its constitution and international law.


Most politicians will not get elected unless they had the support of their party, which also constrains whatever actions they may or may not take. Voters might elect someone with the hope of radically cutting taxes, but in practice, all kinds of mechanisms are designed (they may be less than perfect, of course) to prevent parts of society to take advantage when they are in power.


The hypothesis is as follows: A form of voting to grant managers a limited term to manage is the best mechanism to find the ideal person in the interest of an enterprise, specifically its shareholders (owners) and all stakeholders (employees, clients, partners)


Terms can be rather be short like a financial year or a quarter, depending on the type of work and complexity of the management positions.


We do not claim that elected enterprise leaders result in a ‘better world’. As we describe it, ‘evil corp’ might very well benefit from a voting process to find the best managers to go after their malicious goals.


Rotating in and out of the tasks that a team and organization conduct will help managers make better decisions. It will increase their value for the organization and allow them to cycle back into tasks in demand, in case managers do not want to or are not asked to manage anymore. One of the many traps middle managers are exposed to is losing one’s skill set that helped transform a career towards management.


Take the leader of a software vendor that manages a number of developers, and from there on, moves to running a department and maybe becomes the general manager of a company one day. With the rapid speed of technological change after a while, every year it will become harder (albeit not impossible) for a leader to move back into her or his old position. Some of them might also lose their effectiveness in managing their teams to the degree that technology changes and experience with it were their main asset.


This issue of middle management is deeply connected to how we ‘frame’ and ‘design’ organizations along a conventional hierarchical paradigm of so-called ‘org charts’.


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In this framing, which is really a dogma, there is essentially only one ‘right way’ to develop: ‘up!’ in the org hierarchy and the company pyramid.


In reality, however, for many, the two other alternatives are either ‘out!’ (e.g., competitive strategy consultancies that do not accept ‘stillstand’) or ‘stuck!’ (for the majority of companies that are in need of a large body of ‘so-called’ middle managers’ but have very little top positions to offer).


Building companies like pyramides with an increasingly smaller top level - whilst handing out the (unwritten) manual that the only options forward are up!, stuck!, or out! - is a common but not very useful helpful organizational design pattern.


An alternative vision based on voting is best illustrated with an example. Let’s say a small company of accountants and consultants needs a general manager that will be responsible for the yearly financial results, strategy, and shareholder relation management in the next financial year(s).


A voting process would typically contain some pre-selection criteria like formal qualifications, management experience, and tenure in the company. Some senior managers should qualify for such a process. If not, HR or ‘the voters’ decision to look for an outside candidate.


An internal hiring process must be carefully designed and doesn’t necessarily follow principles of the public sphere (one man, one vote), e.g., it might be appropriate to give the senior management layer or the board, to which a general manager would report, more weight per vote to make up for their lesser votes. It would also need to be decided if the voting is public or not and if voters are expected to give an explanation for their vote or not.


In such a system, for most elected managers, the way ‘up!’ is not a one-way street - they may, will, and should very well go ‘down!’ again when they move back into their previous line of work after a term. But this constitutes a step back in their development, only if we regard organizations through the lens of traditional hierarchical thinking (with rather explicit positive and negative connotations on where you should move in an enterprise)  as a pyramid.


Instead, we need a much more dynamic and ‘friendly’ framing and suggest regarding the organization as connected (Olympic) moving rings.


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In such a paradigm, managers and nonmanagers would ‘orbit’ around positions in their team, via elections they ‘cycle up!’ the ring and after their term ‘cycle down!’. Some managers might ‘jump up! a ring’ if they performed extraordinarily well or move sideways if they want to change their functions and fulfill criteria for such moves.


Similar to a public democratic system, we should expect the community as a whole to understand better, who is qualified, limit and restrict power to avoid abuse, and allow managers and individual contributors to broaden their skills by managing temporarily and moving through positions.


Using the analogy of an elected city mayor could also help us realize that pay and prestige should absolutely not be solely connected to a perceived hierarchical step upward the career hierarchy ladder: It is not necessarily that the elected city mayor that is the best earner and most respected person in town - it might well be the local sports star or an entrepreneur, and in your enterprise, your star-engineer, who is really responsible for the product the entire company lives off, could be the best earner and most respected colleague if we give a traditional hierarchical view of companies.


Answering the question of what an effective general manager is, is a complex and often subjective undertaking that should be decided in a voting process. Elections allow rotating in and out of power while renewing managers’ and individual contributors’ skills. Along with an election process, we need new organizational designs letting go of traditional, misleading hierarchical metaphors for organizations.


Photo by sol on Unsplash

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