Turning Technical Managers into Business Leaders

Making the Business Case

Strategic Focus

Every company, whether intuitively, haphazardly, or deliberately follows a business strategy to succeed in its marketplace. The greater the adherence to a strategy, the stronger the organizational focus. But all strategies are not created equal. Treacy and Wiersema (1995) showed us that those companies that ended up as market leaders excel at delivering one type of value to their targeted customers. Treacy and Wiersma identified three "value disciplines" that companies have built their organizations around to separate themselves from their competitors. They are:

- Product leadership
- Operational excellence
- Customer intimacy

Organizational Balance

But having a clear and appropriate focus through a chosen value discipline doesn't tell the whole story. Denison's research (1984, 1990)has identified the four culture traits and corresponding twelve management practices that drive organizational performance. As the Denison Model graphically demonstrates, strong organizational performance requires a balancing act among an organizational focus that is directed both externally as well as internally and operations that are both consistent and adaptable. It's as if it's a plate, one that needs to be properly balanced to drive business results.

Application to Technology-based Companies

Clearly there are technology-based companies that follow a particular value discipline to great success. Product leaders? Apple and Intel easily come to mind. Operational excellence? Generic drug manufacturers come to mind. For customer intimacy, an example is Menlo Innovations, a software development company that uses its High-Tech Anthropology approach to develop software designed around specific end user needs.

But is the right focus enough to drive organizational performance? What if the organizational culture and management practices are out of whack? Using the Denison Model again, consistency without adaptability dooms a technology-based company to the economic graveyard as its technology becomes quickly antiquated in the marketplace. Adaptability without consistency is the high growth company that crashes and burns as its operations begin to break down and customer commitments are harder to meet. Mission without involvement is the visionary company that leaves its leader far ahead of hesitant or unable followers. Involvement without mission is the energized workforce headed in multiple, possibly competitive, directions.

Roles

Clearly a technology-based company needs both the right focus and balance to drive business results. But on who does the responsibility rest for ensuring the company has both the right focus and balance? Given the extraordinary effort required to accomplish either one, it makes both logical and intuitive sense for the senior leaders to have primary responsibility for developing the appropriate value discipline (focus) and middle managers to have primary responsibility for developing the right organizational culture (balance).

Therefore, technology-based companies need skilled and informed technical managers to make day-to-day decisions that reflect the company's business realities and strategic intent. Every day middle managers have multiple opportunities to either maintain or tip the organizational balance. Too often, though, companies promote technical managers into management based more on their technical prowess and less on demonstrated business skill.

That being said, a technology-based company can't afford to detach its technical managers from its business strategy. Otherwise it will experience situations like this one, far too often.

Erik Soule had been waiting 15 months for this moment. The semiconductor engineer was about to launch a new chip, and he needed his pricing approved. In a conference room at Linear Technology Corp., Mr. Soule anxiously explained why his amplifier chip is so advanced that it should sell for $1.68, a third more than its rivals.

His bosses' reaction: Charge even more. The chip is 30 times better than the competition, they asserted, and high-end customers will crave it on any terms. Why not boost the $1.68 price by 10 cents? Mr. Soule was nervous. "I can live with that," he guardedly replied, "but what does that accomplish?"

It's a dime!" declared Linear's chairman and founder, Robert Swanson. "And those dimes add up."

Source:
Wall Street Journal: July 10, 2007, p. A1
In a Tech Backwater, A Profit Fortress Rises: Maker of Arcane Chips Earns Better Margins Than Google, Microsoft
George Anders

When technical managers are detached from the business strategy, the opportunity for misunderstanding and mistrust between the decision-makers (senior leaders) and implementers (middle managers) increases. Middle managers are more likely to question executive decisions and an "us" versus "them" dynamic can easily take root. Rather, the high performing organization requires senior leaders and middle managers to be "on the same page." In technology-based companies, this requires giving technical managers an opportunity to develop their business skills, just as they developed their technical expertise at one time. The organization's balance depends upon it.

The Core Curriculum

Given this business imperative, here is a core curriculum of business leadership skills training if technical managers are to drive business results in technology-based companies. It provides skill development in external and internal aspects of the organization, as well as areas of adaptability and consistency.

Strategic Thinking

Giving technical managers the opportunity to step back and analyze trends in the industry and actions by competitors can provide them with an invaluable context through which they make their daily decisions. Framing their perspective gives them the right focus.

Financial Know-How

Understanding the bottom-line impact of ordinary decisions gives the technical manager a clear connection between their choices and the financial health of the company. Think of the impact of our semiconductor engineer from an earlier example. If his company was in a low-margin, high-volume market, a 10 cents difference could have a huge impact on the bottom line.

Communication Skills

Technical managers are more likely to be analytical thinkers and communicators. The global marketplace for technology also means technical managers may not be working in the country of their native tongue. Add to this the fact that all of us interact with others who can have different preferred ways of communicating. In order for technical managers to be able to influence and motivate the actions and decisions of others, they need to learn how to recognize different styles and adapt their own communication style to match the style of the other - to speak their language.

Developing Talent

Since most technology-based companies depend on their employee talent to compete in their marketplace, the ability of technical managers to coach and further develop the talents of their employees can have a direct business impact. The risk in downplaying this competency is that higher talented employees will be more likely to look elsewhere if they conclude they are not growing in their current job. The war for talent is fought in the trenches where your technical managers are in command.

Leading Change

Change is a given in technology-based companies. But that doesn't mean that a technical manager knows how best to lead others through the inevitable transitions and iterations. Technical managers can make huge contributions to the company's vitality when they combine strategic awareness, communication skill, and understanding of how people experience the dynamics of change. For many, this is the ultimate definition of leadership.

Fostering Innovation

The world is too complicated for the lone genius coming up with the latest and greatest to be a realistic strategy. Innovation is a discipline that is highly dependent on collaboration and expansive thinking to be productive. Technical managers who are prone to rational, analytical evaluations of ideas can easily create an atmosphere that inhibits innovation. Drawing from the world of improvisational theater, most technical managers would create a powerfully creative work environment by learning how to engender trust with others; listen without prejudgment; accept the ideas of others and build upon them; move into action with full commitment; and stay nimble. An idea doesn't have to make sense for it to work.

Getting Results

Though often attributed more to will than skill, the ability to get results comes from combining the interpersonal skills of communication and motivation with a deep knowledge of organizational systems, processes and culture and the ability to develop adaptability in others. The one who gets results consistently over time is the one who works within the system, not outside the system.

Summary

Training alone cannot ensure technical managers will make the right decisions and take the necessary actions to positively impact their company's organizational performance. Reinforcement, feedback, and recognition have a significant role in this as well. But to assume intelligent engineers and scientists will figure out on their own how to manage others and the business puts the company's future on someone else's development timetable. The reality of a highly competitive, rapidly changing marketplace calls for the right investment in the right people.

Denison, D.R. (1984). Bringing Corporate Culture to the Bottom Line. Organizational Dynamics, 13(2), 5-22.

Denison, D.R. (1990). Corporate culture and organizational effectiveness. New York: John Wiley & Sons.