What Public Education and the Peter Principle Can Teach Us About Finding and Promoting Talented Managers

Merry is in her fourth year at a medium sized audit firm, a EUR 500M regional firm headquartered in London. She's smart, ambitious, and classified as a "high potential". Asked to name her favorite manager, Merry quickly responds, "Sean". She explains, "Sean pushes us. Our last engagement was scheduled to last 6 weeks and wrap up right before a holiday. Before the engagement, he gathered the team and asked, "How can we get this down to 5 weeks?" We brainstormed ideas, and implemented two: batching the work based on everyone's experience, and designing a schedule where we worked longer hours most days, but all of us got one extra day off during the engagement. Those decisions really fired us up and gave us a sense of focus." Sean did "nice things", too - like keeping a stockpile of breakfast foods at the client's site - "but he wasn't easy on anyone", Merry added. "He pulled me aside twice during that engagement. Once, he gently - but firmly - encouraged me to stay focused, because he could tell I was getting bored. The second time, he thanked me for catching an error that one of my coworkers made. Sean's the kind of guy you want to work hard for". Soliciting input. Keeping the team focused. Taking care of the "little things". Coaching.

Defining a Talented Manager

Defining a talented manager is simple. Isn't it? Many of us think we can define what makes a talented manager. Or a talented coach. Or a talented teacher. But can we really, or do we just know it when we see it? Consider the following list of factors that do not predict whether a teacher will succeed: a graduate school degree, an extroverted personality, politeness, confidence, warmth, enthusiasm, and having passed the teacher certification exam on the first try. Turns out that the things that actually make a teacher excellent are a series of little things that are imperceptible...unless you study over 1,000 hours of videotape. In public accounting, we don't have 1,000 hours of film of our best managers. But maybe we should, because our current methods of scouting and promoting talent may not be working. Organizational specialists observes, "Our firms are filled with great technicians, but the bench of up-and-coming leaders is light." Excellent managers are our first line of defense in keeping "high potentials" like Merry, and shaping the future of our firms. How are we finding and growing them?

Finding Sean

It's not easy to spot a Sean in your firm. Most firms promote employees based on "merit" that's based on past performance. But past performance is a crappy predictor of future performance in a new role. Sean was an average auditor. But he is an excellent manager.

In 2009, a team of Italian scientists proved that merit-based promotions are less effective than random promotions. "They created a computer model of a 160-person company and programmed it with Peter Principle-like logic: the best performers were promoted, but they had only a random likelihood of being good in their new jobs. Sure enough, the firm was soon cluttered with incompetents, and its efficiency plunged. But then the researchers tried something different: they reprogrammed the firm so that it promoted people entirely randomly, and the overall efficiency of the firm improved. They also tried promoting the absolute best and absolute worst performers. That too, worked out better than promoting on merit".

The Secret Sauce of Talented Managers

We don't have 1,000 hours of videotape of our profession's best managers, but several years ago, Gallup found and surveyed over 80,000 great managers like Sean and made some astonishing conclusions. Great managers share four simple techniques:

1. When selecting someone, they select for talent, not simply experience, intelligence, or determination.

When choosing his engagement team, Sean thinks first about the needs of the engagement, and then combs through the roster of available people. He carefully selects those with the talents the job requires. Research proves that when people work in their talents and strengths, they are ten times more effective in their jobs. This is how Sean is able to keep his teams engaged, and finish jobs ahead of schedule.

2. When setting expectations, talented managers define the right outcomes, not the right steps.

In his kick-off meeting, Sean asked, "How can we get this engagement done in 5 weeks?" This open-ended question played into his team's natural instincts to get done ahead of schedule, before a major holiday. Sean didn't tell them how to get the job done sooner, he engaged them in thinking about the outcome - finishing in 5 weeks - and let the team figure it out.

3. When motivating someone, talented managers focus on strengths, not on his weaknesses.

Sean - like other talented managers - doesn't believe that you can change people. "Merry gets bored easily", he admits, "so my job is to help her make it through the 'boring' parts and reward her for the things she does well - reviewing work papers and keeping the team's motivation high".

4. When developing someone, great managers help him find the right fit, not simply the next rung on the ladder.

Sean admits, "I wasn't a great auditor, but I'm good at managing and motivating teams". If John (a partner) hadn't seen my potential and advocated for me to get this job, I'd probably still be stumbling around as an auditor."

It seems like Sean had a talented manager, too.