Digest – Research on tap

Are you picking the right leaders?

When it comes time to hire or promote, top executives routinely overvalue certain skills and traits while overlooking others. Intuitively, for example, they might seek out team players, people who shine operationally, dynamic public speakers, or those obviously hungry for greater responsibility.

But some attributes that seem like good indicators of leadership potential are, paradoxically, just the reverse. Team players and those who excel operationally often make better seconds in command. Many a great public speaker lacks the subtle one-on-one persuasive powers that a top leader needs. And shows of raw ambition may be more an indicator of ego than of leadership talent.

Unfortunately, few organisations have the right procedures in place to produce complete and accurate pictures of their top prospects. Assessments are often based on hearsay, gossip, and casual observation. Many companies spend too much effort trying to develop leaders and not enough effort trying to identify them.

A new evaluation process will help you avoid that trap. Candidates are assessed by a group of people who have observed their behaviour directly over time and in different circumstances. Using a carefully crafted series of questions, the group can probe a wide range of leadership criteria, including such “soft” attributes as personal integrity, that are difficult to assess. Without such information, the wrong people will continue to make their way up the corporate ladder.

Harvard Business School

Beware the busy manager

Managers will tell you that the resource they lack most is time. Rushing from meeting to meeting, they check their e-mail constantly, fighting fires – an astonishing amount of fast-moving activity that allows almost no time for reflection. Managers think they are attending to important matters, but they’re really just spinning their wheels.

For the past 10 years, the authors have studied the behaviour of busy managers, and their findings should frighten you: fully 90% of managers squander their time in ineffective activities. A mere 10% of managers spend their time in a committed, purposeful, and reflective manner.

Effective action relies on a combination of two traits: focus – the ability to zero in on a goal and see the task through to completion – and energy – the vigour that comes from intense personal commitment. Focus without energy devolves into listless execution or leads to burnout. Energy without focus dissipates into aimless busyness or wasteful failures. Plotting these two traits into a matrix provides a framework for understanding productivity levels of different managers.

Managers who suffer from low levels of both energy and focus are the procrastinators: they dutifully perform routine tasks but fail to take initiative. Disengaged managers have high focus but low energy: they have reservations about the jobs they are asked to do, so they approach them halfheartedly. Distracted managers have high energy but low focus: they confuse frenetic activity with constructive action. Purposeful managers are both highly energetic and highly focused: These are the managers who accomplish the most.

This article will help you identify which managers in your organisation are making a real difference – and which just look busy.

Harvard Business School

They’re not employees, they’re people

Business thinker Peter Drucker examines the changing dynamics of the workforce – in particular, the need for organisations to take as much care and responsibility when managing temporary and contract workers as they do with traditional staff.

Two fast-growing trends are demanding that business leaders pay more attention to employee relations, Drucker says. First is the rise of the temporary, or contract, worker; eight million to 10 million temps are placed each day worldwide. And they’re not just filling in at reception desks. Today, there are temp suppliers for every kind of job, all the way up to CEO. Second, a growing number of businesses are outsourcing their employee relations to professional employee organisations (PEOs) – third-party groups that handle the ever mounting administrative tasks associated with managing a company’s employees. (Managers can easily spend up to one-quarter of their time on employee-related rules, regulations, and paperwork.) Driving these trends, Drucker observes, is the shift from a dependency on manual labour to create wealth and jobs to a dependency on specialisation and knowledge. Leaders are increasingly trying to keep up with the needs of many small groups of product or service experts within their companies.

Temps and PEOs free up leaders to focus on the business rather than on HR files and paperwork. But if organisations outsource those functions, they need to be careful not to damage relationships with their people in the process, Drucker concludes. After all, developing talent is business’s most important task – the sine qua non of competition in a knowledge economy.

Harvard Business School

Shopping for R&D

Companies are increasingly choosing to buy the ability to innovate, rather than to develop it in-house. But technology-grafting acquisitions are risky business. Although some provide a jump-start on the competition, others turn out to be costly mistakes.

Two recent studies suggest that smaller acquisitions are more likely to deliver more innovation than mergers of near equals. And closely integrating the acquired firm into the parent company tends to drive stronger technological results.

The authors – Gautam Ahuja, associate professor at the University of Michigan School of Business Administration, and Riitta Katila, assistant professor of management and organisation at the University of Maryland – also report that the largest increases in innovation output occurred when there was a moderate degree of overlap between the knowledge bases of the acquirer and its target. Acquisitions that contribute highly similar knowledge deliver few benefits, the research suggests, whereas acquisitions that are too unrelated may not be easy to absorb.

MITSloan review

Related reading