Perhaps the era of quick rotating stints is ending.
Look, for instance, at General Electric. “Rather than purposely relocate its senior leaders every few years to expose them to more of the company, GE now is leaving them in their business units longer than it used to, in hopes their deeper understanding of products and customers will help them win sales,” The Wall Street Journal reported this week.
That’s a big change, because GE has had a practice for the past 50 years of assigning its leaders for relatively short spells to a variety of businesses. The Journal noted that David Joyce, leader of GE’s aircraft-engine operation, has spent his entire career there, whereas “previous leaders of the business had come from outside of aviation.”
Peter Drucker viewed the problem of finding and selecting top managers to be an increasingly difficult one, especially since middle managers are declining in number. What new sort of preparation or tests will substitute for middle-management experience? “Decentralization into autonomous units will surely be even more critical than it is now,” Drucker mused inThe New Realities. “Perhaps we will even copy the German Gruppe in which the decentralized units are set up as separate companies with their own top managements.”
The idea there is that people stay within a specialty and, at the same time, get promoted up through the ranks to the top of a division. “These subsidiaries are thus like farm teams of a major-league baseball club,” Drucker explained.
Drucker also didn’t see constant rotation as a necessary means to becoming a generalist. “The only meaningful definition of a ‘generalist’ is a specialist who can relate his own small area to the universe of knowledge,” Drucker wrote in The Effective Executive. “Maybe a few people have knowledge in more than a few small areas. But that does not make them generalists; it makes them specialists in several areas. And one can be just as bigoted in three areas as in one. The man, however, who takes responsibility for his contribution will relate his narrow area to a genuine whole.”
When it comes to selecting top management, do you prefer people who have rotated through several parts of the business or people who have risen steadily within one?