New Leadership Rules
By Rob Goffee & Gareth Jones

For more than 100 years, conventional managerial wisdom has been driven by the extraction of more value from recalcitrant workers. This sees its latest expression in pursuit of "discretionary effort". But clearly this is merely the latest manifestation of a long line of managerial fads and fashions.

Our view is that the leadership task in the clever economy is not how to motivate your people but how to make your organization attractive to clever people who already know how valuable they are.

This issue takes on greater significance in the context of the great recession. Economists did not see it coming, nor can they clearly predict what the landscape will look like when we do finally emerge from the downturn. However, let us speculate.

First, organizations that are well led have a better chance of surviving turbulent times. This is not the occasion to take your eye off critical processes of leadership development, and smart organizations know this.

Second, future prosperity rests on organizations that make their living from the knowledge they can develop. Leading clever people becomes a critical challenge. Who are these clever people? They are not simply those with the highest IQ or the most impressive academic qualifications. Here's our definition: Clever people are highly talented individuals with the potential to create disproportionate value from the resources available to them. Many highly talented individuals (artists, solo musicians, and other free agents) can produce remarkable results on their own (outside of an organization). But we are not talking about them. We use the term clever people to refer to talented individuals who need an organization 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; in ad agencies, they understand customers, brand values, and craft innovative communications that connect the two. But whatever they do, they do it extraordinarily.

Third, "clever" has a double meaning. In the U.S., being clever carries connotations of being overtly smart and difficult. The English interpretation is being skilled and talented — with an acceptance that being smart usually comes with a few rough edges. Clever people are both talented and difficult.

Why are clever people difficult to manage? They know their worth (their skills are not easily replicated). They ask difficult questions. They're organizationally savvy. They are not impressed by hierarchy. They expect instant access to decision-makers. They are well connected outside of the organization. Their passion is for what they do, not who they work for. Even if you lead them well, they won't thank you.

What Can Leaders Do?

We developed 13 new rules to guide the leaders of clever people.

1. Explain and persuade. Clever people do not like to be told what to do — and are likely to react badly if they are. Needing to be told seems to undermine their sense of self-esteem — clever people shouldn't need telling!

2. Use expertise. Hierarchy, of course, still exists. There are CEOs, CFOs, CIOs, department heads and so on. But using hierarchy to justify decisions or behavior is dangerous and probably self-defeating. Clevers will respond far better to expert power than to hierarchical power.

3. Give space and resources. Provide resources and space — and create the right environment. It is a fine balance between providing enough space to try out new things and creating a playground for clevers where they are not expected to deliver results.

4. Tell them what, but not how. While grand visions may be a distraction, a sense of direction that unifies efforts is helpful. But, going beyond what we are doing to how is risky, as it deprives clever people of the fun of working things out for themselves.

5. Provide boundaries. Clevers need space. But they also need structure and discipline. Creating the right sort of space — sufficiently large to allow clevers to express themselves, but also with boundaries that help them focus their efforts — is vital. One without the other is dangerous and ultimately unproductive.

6. Give people time for questioning. An age-old instruction to children is to ask if they don't know something. Sadly this advice has often been ignored in businesses. As Rob Murray CEO of the Australian brewing company Lion Nathan remarks, "Some people avoid dialogue and engagement with the clevers, because they feel intellectually intimidated. So the number one rule is, even if you realize as a CEO you're talking to people who are academically more astute than you are, you've got to be prepared to go in there and be prepared to engage them."

7. Give recognition and amplify achievements. What clever people do is central to their identity, so recognize their achievements. However, clever people tend to value recognition from prestigious peers and external clients the most. Quality matters more than quantity.

8. Encourage failure, maximize learning. Whereas many organizations need to train people intensively in order to reduce risks of failure, clever people often arrive highly trained in professional or technical terms. Paradoxically, they may get cleverer mainly by organizations maximizing opportunities for failure. This is because they tend to respond best to difficult, stretching tasks where their talents are tested to the limits. By contrast, their attitude towards "training events" (particularly managerially inspired) can be scornful.

9. Protect clever people from the rain. Clever people see the administrative machinery of the organization as a distraction from their key value-adding activities. So they need to be protected from the organizational "rain." The leader sweeps aside the organizational detritus. Leading clevers is all about removing obstacles that prevent them doing what they do best. Sometimes, that means knocking down the barriers; other times it means keeping the red tape at bay.

10. Talk straight. In order to flourish, leaders must be confident about their own expertise. If they are not, the clevers will sense it. They have good antennae for bull. 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.

11. Give real world challenges with constraints. It is sometimes suggested that individuals can be energized to achieve goals by leaders encouraging them that everything is possible. But such 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 faced with real and hard questions which they must solve within meaningful constraints.

12. Create a galaxy. While it is conventional wisdom to seek to attract stars to an organization, the real leadership task is to ensure that these stars are connected to each other in ways that influence the entire organization. The leader is building a social architecture of knowledge. It's akin to using the best players in your soccer team to set the standards for everyone.

13. Conduct and connect. Just as clever people say they don't want to be led, many say they do not wish to see themselves as "leaders". The leader's task becomes how to conduct and connect. This becomes even more evident as the clevers work together in teams and in organizations.

The challenge of leading clever people is critical to the future of the world economy. We wouldn't want to leave you with the impression that life in the clever organization is a little hard, on the contrary, unleashing the potential of clever people is exciting and rewarding. All our futures may depend on it.

For more information on how BlessingWhite can help your leaders answer the question, "Why Should Anyone Be Led by You?" call 1.800.222.1349 or email info@bwinc.com.

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