How much core-business knowledge should our leaders have
One of the great, unanswered questions in business is how much a leader needs hands-on, nuts-and-bolts knowledge of the core business. Who would most likely lead the company to success - the technical expert or the polished generalist? This research examines how much genuine expertise is an advantage in the succsessful running of a business, and how simply being a capable manager may not be sufficient.
One of the unanswered questions in business is how much a leader needs real hands-on, nut-and-bolts knowledge of the core business. Does Ian Powell, chairman and senior partner at PwC, have to be a decent chartered accountant, or would it be OK if he simply wore a great suit and had run an oil company? Could Robert Elliott perform the role of senior partner at the law firm Linklaters without being a competent solicitor? Might former HBOS CEO Andy Hornby have fared less badly if he had spent more years in actual banking rather than Asda supermarkets? What about high-tech firms - should they be led by technical experts or smooth-talking generalists?
This research finds that leaders should be experts in the core business of their organisations. Being a capable general manager alone is not sufficient. This is a hot topic - there is recent evidence that major firms have moved away from hiring CEOs with technical expertise, towards hiring leaders who are generalists. Fifty years ago, as society switched from family-owned businesses and employment through entitlement, to a more meritocratic and efficient approach to enterprise, good management was crucial—as it still is today. The pendulum may have swung too far towards general management functions and away from core business functions however.
The full research article is available for download below.