Podcast | Digging Deeper: Should companies hire a generalist or a specialist CEO?

For quite some time now, maybe a couple of decades, it has been a time of specialists. As knowledge grows based on need, it becomes necessary to drill down deep. And the metaphor is an apt one because in the knowledge area too, the deeper you go, you narrower your focus has to be.

So, today, we are in an era where, whether it is in the field of engineering, medicine, management, technology, law, or almost any professional arena, specialists are often the ones pushing the boundaries and adding value at the top of the line.

The question we are addressing right now, though, is slightly different: if one were to aspire to become the head of an organisation – the Chief Executive Officer, to be precise – what would one rather be? – a specialist, or a generalist? In other words, which is more likely to get one to the post of CEO?

First, though, a little background. Before the age of the specialist came about, it was of course the age of the generalist, the person who could slink into any kind of role, or morph from one role to another. Managers were expected to be nimble, with a wide range of capabilities, and generally able to cross any and all hurdles that came in the way of getting things done. That was the time getting things done included a strong physical component. It was a time when action had to stand in for both knowledge and the ease that technology has enabled today.

This enabled the generalist to become more flexible in his approach and to take chances with results. The specialist, on the other hand, had the strength of increasing expertise in his chosen area, which meant that as he went along he gained more and more knowledge and understanding, which in turn gave him a higher degree of control over his chosen field.

In general, there seem to be inherent differences in the way generalists and specialists are taught to think and to operate. To consider the generalist, let’s look at the positives and possible negatives of being one.

Range of knowledge – The very career graph of a generalist enables one to gain knowledge and understanding of various aspects of the work involved. In an organisation, this translates into knowledge of how different departments work, and to be able to apply the learnings of one to solve problems in another.

Inter-disciplinary skills – The accumulation of skills across a range of disciplines enables the generalist to address issues more broadly. In a world that changes at an ever-increasing pace, the ability to deal with shifts in focus and approach become vital, and the generalist’s exposure and training and mental makeup provide the ability to make lateral jumps more quickly.

Broad view–The generalist would, over the decades of his career, spend time and effort coming to grips with the workings of different departments in a workplace. This would give him an understanding of the dynamics of different processes, and eventually give him a multi-dimensional approach to both grasping situations and addressing issues.

Empathy – A generalist, by his very nature, isn’t restricted to silos. This means that, in the long run, his understanding of the way different people work in diverse circumstances and settings increases. He has the opportunity to learn and absorb the uniqueness of functions and the dynamics of processes. So, there is a greater likelihood that he is able and willing to take a step back when the occasion demands, and try and understand a situation from the perspective of the other person. He is able to grant and appreciate the difficulties of people and situations.

Nimbleness – This again goes back to working outside of silos. Because one is not restricted, one tends to think outside the box. The generalist is able to look at both processes and results, and as conditions change, prioritize one over the one as the occasion demands. This ability to straddle different approaches and to focus on different aspects in a constantly changing scenario gives the generalist an advantage in tackling a diversity of situations and to apply different sets of parameters.

But then, if there are advantages, there are also disadvantages. There is the flip side to consider, and the crux of it comes to the clash of breadth and depth. It is rare that a person commands both dimensions. So, all the advantages that the generalist’s breadth-oriented approach gives him is likely to be at the cost of depth of knowledge, which can affect his overall grasp, which means he could have vital holes in his understanding.

In 2001, the Harvard Business Review came up with the T-shaped leader, it described executives with a strong focus on their business unit and the ability to communicate their expertise and ideas across the organisation. Morten Hansen, who was a professor at the University of California, Berkeley, who wrote that article, said that by cultivating wider skills and interests you become more aware of connections between different disciplines and threats on the edge of your business, but these days, he said companies seem to want to stretch the vertical stroke of the "t", creating an almost impossible tension between breadth and depth. Prof. Hansen said that his students often studied a wide range of subjects, but they very varied on coming to the job market without an actual speciality. But then again the danger of over specialisation is that you become very narrow in your skill set and rather tribal in your attitude.

Now, to come to the specialist. Specialization has its advantages that are a result of the discipline that comes with the time and effort spent on one subject or area, looking at it from different angles and perspectives, and over the years coming to grips with it in a more or less comprehensive manner.

Comprehensiveness - The discipline practised by the specialist over his career becomes more or less second nature, and gives the specialist the ability to approach a situation systematically – one could say, a scientific, maybe even a mathematical, approach; the doggedness to not let go, to continue to probe in different ways till a solution comes through.

Depth of focus –This is one of the advantages of being in a silo. The knowledge of your surroundings is very close to complete and highly detailed. This pointed understanding enables minute examination of every possible issue, and the path to resolution is very well mapped. In highly specialized areas of operation, and in sensitive situations this would be a crucial strength because an in-depth examination of the variables would instantly increase manifold the chances of success.

Discipline – This is actually not a sidelight but the bedrock of the specialist. Discipline in the process, whether it is thought or action. There is little in the manner of error, and gives a more consistent level of success as time goes on.

With the specialist, too, there is the flip side, and the other side of his strengths can be projected as possible weaknesses. For instance, the ingrained impulse towards comprehensiveness can also, on occasion, mean an obstinacy in terms of stopping at every turn and insisting that all possibilities have been covered before moving on. This could play with the exigencies of a situation. In the case of depth, this would be the opposite of the generalist: a weakness as far as breadth is concerned and an inability or even unwillingness to step back and take a more wide-ranging look at things. On the whole, the unwillingness to let go can be a useful trait, the inability to do so in given circumstances would turn the strength into a weakness.

Okay… so we have looked at the inherent and possible strengths and weaknesses as far as generalists and specialists are concerned. To come to the question at hand: when it comes to becoming a CEO, what is better – to be a generalist, or to be specialist?

Studies have been conducted and papers have been written on the topic. Of course, requirements change with time, but overall, given context and history, conclusions point to a few attributes and personality traits that work in the favour of someone reaching top dog status. In short, it appears that generalists hold the advantage.

One study in 1997 by Edward P Lazear, a labour economist at the Stanford Graduate School of Business, involved analysing 5,000 people who had reached the top position in an organisation. Lazear found that those who had been in just one or two roles in their career made it to the CXO position only 2 percent of the time. On the other hand, those who had held five or more positions made it 18 percent of the time – a nine-fold increase in likelihood! According to Lazear, “The higher you get in an organisation, the more likely you are to encounter problems from a variety of different areas.” According to him, many types of organisations, right from small companies to large corporations seem to follow this method of selecting leaders from those who have done their rounds of various departments and positions within a company.

The question naturally arises: but wouldn’t the managers at each level and in each department be equipped to deal with the situations that crop up? Yes, says Lazear, but a chief who understands the workings of the individual areas is better equipped to hire the right people. Putting together a diverse team seems to be a generalist’s speciality.

The same rule applies in the situation of someone who has worked across not just disciplines within an organisation but across industries. Mittu Chandilya, before he was appointed CEO of Air Asia India, had no experience of the aviation industry, but had worked in startups before, juggled numbers and managed large teams. This experience and learnings from it could be applied in his new position in a new industry.

According to Chandily, “A CEO has to be a good manager, a people leader. Working across industries actually helps develop these skills.”

Similar is the case with Wilfred Aulber, who was recently appointed managing director of Mercedes Benz India. Aulber came into the job with wide-ranging experience in sales, marketing, production and research and development. On top of that, he had also been an entrepreneur, supervising every aspect of the business. Aulber says the company took a risk with him, but then they were probably just reflecting another stated strength of the generalist – taking risks. Research has found that generalist CEOs are better at taking risks in the pursuit of innovation, transformation and exploring new avenues. It turns out this attitude to risk-taking comes from their willingness to make mistakes, and their ability to see mistakes not as points of failure but merely the often unavoidable steps on the way to reaching a set goal.

Research also concludes that generalist CEOs are more likely to go for acquisitions and diversifications on the way to expansion and creating value.

A long-term study spanning two decades by Philip Tetlock, professor of organisational behaviour at the Haas School of Business, UC Berkeley, found that generalists are better forecasters. They predict the outcome of situations more accurately, even when they are operating outside of their area of expertise. They are able to extrapolate and apply learnings across disciplines more fruitfully.

In passing, it might also be worthwhile to mention that, according to a research study on the impact of CEO expertise on compensation, generalist CEOs generally get better pay packages than specialist CEOs!

Interestingly, in this age of specialization, where increased specialisation is automatically assumed to have better prospects and perhaps even desirability, it appears as if companies prefer generalists. At least, specialists appear to be operating in more generalized domains, according to a study conducted in the UK in 2013, half of the 2,000 people surveyed said though they had been hired as specialists, their duties had been diluted over time and they considered themselves to be in the generalist sphere at the time of the research. It does look like it is not just when it comes to positions of organisational leadership but also further down the line, the generalist seems to be preferred. However, according to the study, this had its negatives too. Though a generalist is looked at as a better fit in terms of promotions, one fourth to one-third of those who drifted towards generalized roles said this had affected their motivation levels.

So, in the final analysis, though requirements would differ, and conditions would keep changing, the basket of skills and experience that the generalist brings to the table appears to be distinctly better than that of the specialist, as far as top leadership is concerned. Of course, the specialist, in his own area, is vital but works better as the leader of his own or related verticals. When a wider sweep of the vistas is required, the generalist and his range of skill-sets are preferred.