What do the founders of Logitech, SAP and Swatch all have in common? There are probably many similarities, but one specifically is that these companies’ founders, against the odds, built internationally renowned companies within a few decades. To do so, they showed tremendous entrepreneurial spirit and they leveraged off a strong technical base before mastering the in and outs of general management.
Daniel Borel, Co-founder of Logitech and its Chairman from 1982 – 2008, earned his engineering degree in physics from the EPFL and a Master of Science Degree in computer science. His technical background was instrumental in developing Logitech’s mouse business. In the course of his career, he developed the management skills which helped make Logitech the world leading peripheral-device maker.
Dietmar Hopp is a true software entrepreneur. He graduated with a degree in engineering from the University of Karlsruhe. He co-founded SAP, the German software development and consulting corporation, in 1972. It wasn’t until 15 years later that he became CEO of the company. SAP is now the largest software enterprise in Europe. Hopp has since used his managerial skills in other ventures, including in the creation of a large, non-profit foundation that supports sport, medicine, education and social programs.
Nicholas G. Hayek sadly died on June 28, 2010. He leaves behind a lasting legacy in the watch industry. Hayek, the Founder of the Swatch Group Inc, entered the world of business from a technical background. After studying physics and chemistry at Lyon University in France, he re-located to Switzerland where he opened Hayek Engineering. His technical training coupled with an insatiable entrepreneur’s spirit provided the perfect combination of qualities needed to understand both the challenges and potential in the highly-technical Swiss watch industry. Hayek will forever be remembered for saving the industry through his intuition and visionary leadership.
These managers’ successes are representative of the tip of an iceberg that risks melting away. For decades, SMEs led by managers with a profound understanding of the technologies behind their products and services built the backbone of European economies. Competencies developed by majoring and working in a technical domain early on in ones career would appear even more vital in today’s uncertain market environment and times of information overflow.
So why is this important?
Today’s business environment presents many new challenges to which company leaders must adapt in order to guide their organisations through stormy waters – waters that don’t leave much room for mistakes. Products are being introduced at an ever faster pace; technologies are increasingly spanning across multiple domains; and multicultural cooperation, both between and within companies, is no longer a future trend but rather a present reality. At the same time, companies need to engage the marketplace with simultaneous global product launches to recoup R&D investments before competitors react and products commoditize – keeping the entire business process on its toes.
These challenging times require leaders who make decisions on more than just facts and figures and who act decisively on instinct derived from a profound and thorough understanding of their products and the products of their competitors. Or, as one manager put it, “leaders must have the gut-level instinct and technological prowess to adapt their product offering making key decisions way ahead of any market feedback.”
In a knowledge-based market, this means, almost without exception, leaders must have a profound and thorough understanding of key technologies as technology bets themselves can make or break a business. This principle doesn’t just apply to highly technical companies like Logitech, SAP and Swatch. Technology surrounds us today, and almost all of our products and services require, in some form, a mastery of technology.
As a result, business leaders find themselves under tremendous pressure to both master technologies by leading their industries in R&D and engineering, yet simultaneously be savvy when engaging with marketing, operations and finance functions. In short, companies need technical experts who can see the technology path to profitability and lead interdisciplinary teams to accomplish this task ahead of the competition.
The role of HR and the technical expert
How can the skills of those with a technical background be leveraged for the good of the individual and ultimately for the good of the company? Are we still valuing technical expertise in our organisations and reocgniseing the important talent pool companies possess on the technical side of operations? Both HR and the technical expert have an equally important role to play to tap this resource.
HR has to be more pro-active developing the talent outside finance, sales and marketing departments to produce up-and-coming general managers. If you look to the pool of business unit leaders only, key talent from the technical pool may never surface on your radar. We need business-savvy leaders but we also need those with the technological knowledge that allows for market-trend foresight and strategic action. HR departments ought to harness the internal technical skill, which helped to create the products, by training technical managers in broader business management.
The technical expert also has a role to play. Often they fail to see that they are well-equipped to lead in today’s complex marketplace. They need to reocgnisee their potential to become leaders within companies and then have the ambition to seek out new skills and competencies. They should be confident! It is far easier for one with a strong technical base to learn general management than vice versa.
Technically-trained managers should dare to take a more unconventional path similar to the founders of Logitech, SAP or Swatch. Many organisations are seeking to boost more intrapreneurship activities. Technical experts need to move beyond their scientific niche and pursue opportunities which would allow them to see business from new angles. To harness their full potential, they must learn to see a product not as just a technological challenge but as marketing, operations, investment and leadership challenge as well.
In order to bridge the gap between technical and business management expertise, executive education could play a role, particularly in programs geared to help technical experts overcome the challenges of general management. HR also needs to consider comprehensive internal training and charting a career development path composed of cross-functional exposure.
Technical experts have everything to gain from expanding their skill set — and everything to contribute as a result.
Ralf W. Seifert is Professor of Operations Management at IMD and EPFL. He directs the Mastering Technology Enterprise program, which prepares technical managers for the challenges of general management. The program is run in collaboration with the EPFL in Lausanne and ETH in Zurich.
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