x Abu Dhabi, UAETuesday 25 July 2017

The perils of early promotion

There are drawbacks to promoting people early. The solution is managers need to practice to become good operators.

The Cuban president, Raúl Castro, who is facing a similar problem to many organisations - a lack of experienced managers. Franklin Reyes / AP Photo
The Cuban president, Raúl Castro, who is facing a similar problem to many organisations - a lack of experienced managers. Franklin Reyes / AP Photo

While announcing his impending retirement in 2018, Raúl Castro, the president of Cuba and the brother of the revolutionary, Fidel Castro, said: "Today, we are faced with the consequences of not having a reserve of well-trained replacements … It's really embarrassing that we have not solved this problem in more than half a century."

The Cuban leaders were well intended but poor in execution. As Raúl Castro once said: "Although we kept on trying to promote young people to senior positions, life proved that we did not always make the best choice."

And now they are forced to promote people who are not ready.

Mr Castro's comment made me wonder, how many leaders are facing a similar predicament, needing to promote people ahead of time?

A decline in qualified managers is detectable in productivity figures. In the 1970s, productivity growth in the United States fell compared with the preceding decade and this trend remained until around the turn of the century. The slowdown in the US roughly corresponded to the entry of the baby boomers into the workforce.

There are enormous debates about the causes of changes in productivity. But the common theme that emerges is that the quality of managers plays a significant role in determining output.

Dartmouth College research credits the management effects of the baby boom with roughly 20 per cent of observed productivity slowdown. An examination of census data showed that the entrance of the baby boomers into the workforce caused significant changes in the age structure of management, revealing a rise in workers classified as managers and a dip in managers' median age.

The number of workers per manager rose for existing managers - reducing their effectiveness - and some workers were prematurely drawn into the ranks of management and called upon to manage at earlier ages than in previous generations.

So, with all other things being the same, more talented managers will produce more output.

In the Dartmouth study, they found that the "spillover effect" of an influx of young workers lowers the overall quality of management and total factor productivity. A massively younger workforce means that the average age of managers drops and this typically lowers the labour productivity per hour as they are still maturing into effectiveness in their role.

So, what is the solution for Cuba and any business leader facing the issue of promoting early? Managers need practice to become good.

A few years back, I was out on a boat touring The World islands in Dubai with the author Malcolm Gladwell and our conversation centred on growing young leaders.

He made the interesting statement that "becoming a leader is much like becoming a doctor, you do it on the job". What he was really saying was that it takes practice to become a good leader, it does not happen in the classroom.

In his book Outliers, Gladwell popularised the work of K Anders Ericsson, a professor of psychology at Florida State University, who is recognised as one of the world's leading researchers on expertise.

Dr Ericsson claims the "10,000-hour rule" is the key to success in any field. This research says you need to practise a specific task for a total of about 10,000 hours to master it. The same holds true for managers and leaders.

Do your managers spend time practising or do they spend all of their time "in the game"? To get better, they need to practise.

 

Tommy Weir is an authority on fast-growth and emerging-market leadership, an adviser and the author of The CEO Shift. He is the founder of the Emerging Markets Leadership Center