Putting the experts in charge

Amanda Goodall discusses the link between the core business knowledge held by a leader, and organisational performance.

The board of internet service giant Google is dominated by computer science and engineering graduates. It even boasts two university presidents - Stanford's John Hennessy and the former Princeton President Shirley Tilghman, both of whom are eminent scholars. Corporate boards that boast a preponderance of scientists over managers are rare. It is notable that despite becoming a corporate behemoth Google continues to promote its scientific credibility. Does the incredible and rapid success of this organisation demonstrate that this approach is the way forward?

If scientists in the corporate boardroom seem counterintuitive to some, so too does the idea of leadership to knowledge-workers. It has previously been assumed that leadership is less necessary in organisations that are knowledge-intensive. This is because experts and professionals are viewed as being driven largely by intrinsic motivation, and, therefore, extrinsic management and leadership practices are less important. For example in American and British hospitals, examples of knowledge-intensive organisations, medical practitioners have been separated from management and leadership. In the US about 5% of hospital CEOs are MDs, with even fewer in the UK. Hospitals were once run by doctors; today in these countries they are run by a cadre of professional managers. The assumption is that medicine should be left to the doctors and the organisational leadership to the managers. Dr Goodall argues that this is a mistake, as those running the organisation have no direct understanding or knowledge about its core business. The very best hospitals in the US are more likely to be led by doctors, physicians with outstanding research reputations, not professional managers. Dr Goodall has found this pattern to be statistically significant. Others have shown that hospitals perform well when higher proportions of managers are also clinically trained, and there is also evidence that the higher the proportion of clinicians on a hospital board, the better the performance.

This research began by looking at the role of university presidents. It was found that not only were the best universities in the world more likely to be led by outstanding scholars, the longitudinal data showed that universities improve over time in their performance if they are led by better researchers. This pattern has recently been replicated inside universities, with heads of economics departments. The more cited the department Chair, the better the department performs a number of years later. Just because you can't herd cats, as the academic cliché goes, doesn't mean there isn't a feline hierarchy. There is. Like academics they have what's termed a 'relative hierarchy' where the top cat may change depending on the setting.

This relationship, between the core business knowledge held by a leader and organisational performance, is also evident among basketball coaches in the NBA, and among Formula 1 team leaders. In basketball the statistical pattern is very strong; the very best players end up making the very best coaches. In Formula 1 Championships it is the former drivers who are associated with best team performance. We find the same pattern in professional service firms; the senior partner will have likely been with the firm for much of their career and will have performed well in their professional capacity. The evidence is clear; when it comes to knowledge-intensive organisations, experts and professionals need to be led by other experts and professionals who have excelled in their field.

Why might this be? Credibility plays a major role. If a leader or manager has shown that she or he has walked the walk they seem credible. They will know how best to motivate and incentivise staff and they will be able to create the right work environment for success. If leaders are expected to set the standards for the organisation, shouldn't they also be expected to first to meet that standard themselves? If you are the best scientist or physician you are more likely to hire other outstanding researchers and doctors. Similarly, if you are a great manager then you are more likely to pick other good managers.

Most experts and scientists are reluctant leaders. So how do we motivate and incentivise experts into leadership positions. Training could be tailored so that it is bite-sized and appropriately designed for people with a low tolerance for executive jargon and management fads. It may also be necessary to try to communicate the importance of management and leadership early in an expert's training or career. Many medical schools are considering including some management education during students' medical training. Experts and specialists drill down deeper and deeper into knowledge; managing and leading requires taking a step back into the big picture. With some forethought there is no reason why these two perspectives cannot co-exist in the same people.