Economists didn't see it coming, and they don't know when we will get out of it. But what is clear is that we are facing the most serious economic crisis since 1929. No-one can predict what the business landscape will look like when we finally emerge from the downturn, but two speculations can be made. First, that organisations that are well led will have much more chance of surviving these difficult times; and second, that - at least in western economies - future prosperity rests with organisations that make their living from the knowledge that they themselves are able to develop.
Keeping and leading the clever people who inhabit these organisations therefore becomes a critical challenge, and there is a real concern that in this recession, with a focus on cost-reduction and headcount control, some organisations are becoming miserable places to be. Already, many businesses are experiencing low morale and growing anxiety as people worry about their job security. Yet research has repeatedly demonstrated that creativity and innovation are inextricably linked to energy, edge and fun, which organisational attrition is in danger of crushing. Smart organisations know that the challenge is not to follow tradition and simply try to extract more from employees. Instead, it's about making your organisation attractive to 'clever' people who already know how valuable they are.
So who are these clever people (or 'clevers')? They are not simply those with the highest IQ or the most impressive academic qualifications (although many of them score highly on these measures). Clever people are highly talented individuals with the potential to create disproportionate amounts of value from the resources that the organisation makes available to them.
This organisational point is significant. Many highly talented individuals are capable of producing remarkable results on their own. These 'stand-alone' people include artists, solo musicians and other free agents, but we use the term 'clever people' to refer specifically to talented individuals who need an organisation to achieve their full potential.
Precisely what they do, of course, depends on the context. In pharmaceutical companies, they carry out scientific research and produce ideas for new drugs; in professional services firms they solve complex client problems; and in ad agencies they understand customers, brand values and craft highly innovative communications that connect the two. But whatever they do, they do it extraordinarily.
Here, we identify nine common characteristics of clever people, although our list does not claim to be exhaustive ...
1. Their cleverness is central to their identity.
For clever people, what they do is who they are, rooted deep in their being - they are defined by their passion, not the organisation they work for. The close association between what they do and who they are also means that clever people often see themselves as not being dependent on others. The leader must, therefore, start by acknowledging their independence and difference. But - and this is an important caveat - the leader's job is to make them understand their interdependence with the company. Recognising the symbiotic nature of the relationship is critical to both the individual and the organisation.
2. Their skills are not easily replicated.
If they were, clever people would not be the scarce resource they are. Once upon a time, competitive advantage came because your product was slightly better or produced more cheaply. Now, it often comes through the collective efforts of the people in your organisation. The good thing about people - and the teams they create - is that they are (as yet) impossible to copy. The knowledge of clever people is tacit and is embedded in them.
3. They know their worth.
The fact that they understand that their knowledge is both hard to replicate and a function of the professional networks they belong to is linked to the clear understanding that they have of their value. Such sentiments represent an important power shift: confident in their own worth and ability, clever people exert pressure on their leaders, and their scepticism about the relevance of leadership obliges leaders to demonstrate their own contribution.
4. They ask difficult questions.
Says Will Wright, the designer who led the creation of the Sim City franchise and Spore game for Electronic Arts (EA): 'My clearest indication that I have somebody who is really talented is that they will come into my office and argue with me on some issue where they are convinced they're right. The fact that they are passionate enough to sit and argue with me is a huge indicator.' For a clever person, knowing your worth means that you're more willing to challenge and question. Clever people are often incessant interrogators of those who hope to lead them.
5. They are organisationally savvy.
It is easy to assume that clever people are organisational innocents, too focused on their own expertise to play political games. The reality is different. They are human - and clever with it. Clever people will find the organisational context in which their interests will be most generously funded. When the funding dries up, they have several options: they can move on to somewhere where resources are plentiful; or they can dig in and engage in elaborate organisational politics to ensure that their pet projects are indulged. This is a pattern we have witnessed over and over.
6. They are not impressed by corporate hierarchy (and they don't want to be led).
The demands of the clever economy pose a leadership conundrum: if there is one defining characteristic of clever people, it is that they claim they do not want to be led - and they are absolutely certain that they don't want to be managed. They have an undisguised disdain for organisational hierarchy, which has important implications for leading them. Says Christina Kite of Cisco Systems: 'It's all about influencing through skill and knowledge, not through title.'
7. They expect instant access.
The ideas of clever people are so all-consuming to them that they cannot understand why they may not be important to their leaders as well. If they don't get access to the chief executive, they will assume that the organisation does not take their work seriously. So perhaps it's not surprising that many of WPP's clever people perceive CEO Sir Martin Sorrell's legendary speed of response to e-mails as one of the most distinctive and valued aspects of his leadership style. The challenge for leaders is to balance open access with what might be regarded as interference.
8. They want to be connected to other clever people.
Just as organisations need clever people in order to be effective, so too do clever people need other clever people - and organisations - to achieve their full potential. For them, networking is not a social pursuit but a source of perpetual improvement and bright ideas. Networks enable clever people to question assumptions and to recognise and make previously unacknowledged links.
9. They won't thank you.
'There's a part of me, a slightly dark part of me, that thinks these clever people wouldn't recognise management or leadership if you hit them in the face with it,' confided one leader. Even when you're leading them well, clever people may be unwilling to recognise your leadership, so measure your success by your ability to remain on the fringes of their radar - you know you're a success when you hear them say you're not getting in the way too much.
Clever people can be difficult to lead, and during our research we developed new rules to help guide their leaders. Clevers do not like to be told what to do, and are likely to react badly when they are. Needing to be told seems to undermine their sense of self-esteem - clever people shouldn't need telling. Persuade them instead, and make the most of your expertise.
Hierarchy, of course, still exists. There are CEOs, CFOs, CIOs and department heads, but using your job title to justify decisions or behaviour is dangerous and probably self-defeating. Clevers will respond far better to expert power than to hierarchical power.
It is sometimes suggested that individuals can be energised to achieve goals by leaders encouraging them that everything is possible, but this kind of optimism is not always successful with clever people - their preference seems to be the reverse. Tell them something is not possible and they will be highly motivated to prove you wrong. Clever people are at their most productive when they are faced with real, hard questions that they must resolve within meaningful constraints. They work best when organisations maximise the opportunities for failure, because they tend to respond best to difficult, stretching tasks that test their talents to the limits.
Clevers must be given enough space to try out new things. Creating the right sort of arena - sufficiently large to allow clevers to express themselves but with boundaries that help them focus their efforts - is vital. One without the other is dangerous and ultimately unproductive.
They must be given recognition for their work - although you should not necessarily be the one to give it. What clever people do is central to their identity, so recognising their achievements is vital. However, clever people tend to value recognition from prestigious peers and clients outside their organisations the most. And although recognition is highly valued, it doesn't always need to be delivered frequently. It's quality that matters, not quantity.
Clever people see the administrative machinery of the organisation as a distraction from their key value-adding activities, so they need to be protected from unending organisational 'rain'. Leading them is all about removing obstacles that prevent them doing what they do best. Sometimes, that means knocking down the barriers, and at other times it means keeping the red tape at bay. They also appreciate straight talking. Try to gild the lily and the clevers will sense it, because they have good antennae for bullshit. To be an effective leader of clevers, you have to know who you are, be confident in your own abilities and say what you mean.
Just as clever people say they don't want to be led, many say they do not see themselves as leaders. The leader's challenge is to conduct and connect, and this becomes more evident as the clevers work together in teams. What distinguishes a team is that there are shared objectives and interdependent tasks, and members are aware of each other's existence. It sounds simple, but clever people often struggle with these basics, and so fail as team members.
A further wrinkle is that the shape, character and contexts of these teams vary. Compare and contrast, for example, techies, creatives and professionals. Techie teams tend to be over-specialised, disconnected from the mainstream organisation and perhaps populated by individuals with weak interpersonal skills. Creative teams are different. Sometimes one brilliant creative comes to dominate all others in the team; another problem is that creative clevers are drawn to novelty at the expense of quality - at any cost. Finally, creative tensions in the team can run high and lead to unproductive conflict. Meanwhile, professional teams have a tendency to be wilfully mischievous - disciplined in professional terms but sometimes acting like children in interpersonal terms. They also tend to avoid feedback from their colleagues, which is often a result of their obsession with clients.
Despite these differences, clever teams have things in common. For instance, they are normally engaged in tasks that are complex. After all, there would be little point in bringing clever people together into teams in order to tackle simple tasks. This complexity involves many interfaces, high levels of uncertainty and value chains that may extend not only beyond the team but beyond the organisation.
Second, clever teams are often deployed in dynamic environments - that is to say, many of the variables that they are having to deal with are changing rapidly and unpredictably. This complexity and rapid change requires a highly cohesive team, able to exploit different forms of cleverness and to work together over long periods of time. Without cohesiveness, the presence of complexity and change could produce chaos and fragmentation. But the nature of the tasks that clever teams are engaged in requires almost the opposite of cohesion - even a degree of fragmentation.
Successful clever teams require diversity. This is not just diversity measured in conventional HR ways (although, of course, that is important enough) but diversity of perspective. Only this can generate the high levels of cognitive conflict that clever teams require. On many occasions, we have witnessed the diversity of top teams in the City composed of self-made 'barrow boys' and well-educated Oxbridge graduates, and they often demonstrate high levels of creativity.
Inevitably, clever teams are also characterised by the high number of relationships they create. The very nature of the complex problems that they deal with requires that they handle many relationships outside their immediate team.
All these factors combine to make clever teams volatile. The need for the clash of ideas, the passion that these people bring to their work and the high levels of intrinsic uncertainty are all conditions that generate volatility.
Clever people really care, and it shows in their teams. Just as teams vary, so do organisations. We have researched clevers in many settings, in the kinds of organisations that you immediately think of, such as Google and Apple, and in well-established professional services such as PwC and hospitals. However, cleverness is to be found in a huge variety of places, in schools, in fast-moving consumer goods, in breweries - and not just in R&D departments.
There is no single template for the clever organisation, but the most successful enterprises in the clever economy exhibit high affinity (the ability to empathise with clevers) and clear discipline. Examples include EA, McLaren and Cisco. Then there are those clever organisations with high levels of affinity for clevers and low levels of discipline. They are characterised by high sociability - clever people wanting to self-select, hanging out with each other and choosing work that interests them.
Engineering firm Arup recognises that great things can happen when the stars are 'naturally' aligned. The problem is that it may not happen enough. Indeed, the fashionable way to lead clever people in the 1950s and 1960s was to create an ivory tower, such as Lockheed's Skunk Works. Organisations put up buildings overlooking lakes, oceans or mountains, populated them with their smartest people, provided money and resources, and retreated 100 metres to await the creative explosion.
Highly disciplined organisations with low affinity for clever people aspire to predictable but complex outcomes. For example, the operations and IT functions of global investment banks are harangued daily to deliver their promises and, by the way, reduce the cost of trade at the same time. But inside these organisations, it often doesn't feel that clever people have the time and space to think creatively. They complain that they are pressured to produce one quick fix after another. This fundamental tension may help explain why so many major IT projects result in disappointment.
So, returning to where we started, as organisations seek to increase levels of discipline - often under external pressure from the market and the analysts - they create places where clever people don't want to be, because they kill any empathy for them within the organisation. A nasty, brutish environment is fatal for any organisation that aspires to achieve the competitive edge that clevers provide.
It's a delicate balance between giving clever people the freedom they need to experiment and grow, and the necessary discipline that sets them useful boundaries. Only then can their potential be released.
Clever: Leading your smartest, most creative people by Rob Goffee and Gareth Jones is published by Harvard Business Press. Readers of MT can order a copy (RRP £19.99) at the special discounted price of £15 (including p&p). To order, telephone McGraw-Hill on 01628 502720 with your credit card details, and quote special offer code MT09C. Offer ends December 2009.
RULES OF CLEVER ENGAGEMENT
- Explain and persuade
- Use expertise
- Give people space and resources
- Set objectives
- Give people time
- Provide boundaries (agree simple rules)
- Give recognition
- Encourage failure and maximise learning
- Protect them from the 'rain'
- Talk straight
- Give real-world challenges
- Create a galaxy
- Conduct and connect
- Tell people what to do
- Use hierarchy
- Allow them to burn out
- Give orders
- Create bureaucracy
- Give over-frequent feedback
- Expose them to politics
- Use bullshit or deceive
- Build an ivory tower
- Recruit a star
- Divide and rule