Amanda, why did you choose the world of Formula 1 for your study ‘Expert Leaders in a Fast-Moving Environment’?
There were two reasons. The first one is that in previous studies, I found a pattern of what makes expert leaders and wanted to see if I could replicate it in as many places as possible. The second one is that I find Formula 1 interesting and the available material gave me the chance to collect and analyze essentially 18'000 races' worth of data and characterize each of the team principals. Another great thing is that in many organizations the question 'what is performance' can be highly contested, but with sports data there is no argument about what good performance is. There is no grey area – you win or get a podium position.
What are the main conclusions that you would pass on to aspiring business leaders?
In Formula 1 we clearly see that former drivers make the best leaders, the best team principals. We see that teams with a principal with 10 years driving experience have a 16% higher probability of gaining a podium position. More generally, we find that former drivers and mechanics performed better than managers and engineers. One of the key reasons for that is essentially that they are close and they can feedback all the important information. Similarly, in a study that I’ve done with two other economists, we looked at a random sample of 35'000 employees matched with their employers. We found that employee job satisfaction was highest among employees when they were managed by a line manager who worked his or her way up or started the company, or when a boss could perform an employee’s job. Now why is job satisfaction important? Because more and more research is showing that job satisfaction is linked to organizational and individual performance. If you are happy in your job you are likely to perform better. It's a no-brainer, really.
Why do you think previous competitive racing experience is such an accurate predictor of a principal's performance?
We tend to focus on the individual leader. I think we need to take a completely different approach. If you were growing plants, we would be saying, ‘What do the plants need to grow?’ For too long we have been focusing on anecdotal stories about the “great man’s” story of leadership – focusing on the “star” at the top. We need to start with the question ‘how can we create the right work environment to facilitate individual productivity and job satisfaction?’ This is the how expert leaders influence performance. Think of your immediate boss right now. If he or she does not really understand what you do, how are they able to communicate with you, to give you the kind of support or feedback that you need to progress? We know that you are more likely to be consulted appropriately by someone who has a greater understanding about the nature of the work, because they have walked the walk. If you have spent many years in an environment, and developed a deep expert knowledge then you can judge situations, however they present. With expert knowledge you are able to assess, make decisions and give very specific feedback.
How do the best business leaders adapt to changing environments?
In any domain or field – it doesn’t matter if you're in sales, a journalist, a doctor or a driver – you have to focus in that area for a long time to master it and become credible. The other interesting question is how do we get ourselves to see the bigger picture? You want people who are knowledgeable in the core business to understand the wider context, their team, and to reflect on it. We're suggesting people are allowed to focus, there isn’t an empirical number attached, but about 5-8 years so they learn their job. Then you might put them in short, sharp and tailored leadership education trainings. The people who you can see are going to be adaptable and seem to show some reflection, those are the best business leaders. Then you might want to start singling them out and giving them more education around leadership.
Do you have any advice for managing experts?
I have a degree exclusively running for doctors and we start with a module that is all about self-reflection. Success breeds arrogance quite often, and some successful people may think that because they are good at one thing they are good at everything. This can be a problem when you have got a dynamic MBA person who’s leading an organization, but who hasn’t had any experience in it. So, self-reflection and understanding what you don’t know if you are managing a situation where you've got experts underneath you, is key. In that case the first thing you have to do is show humility and learn what you don't know from your experts. Going back to Formula 1, the people who have been out there on the tracks, they will have some humility. They will know what it’s like to lose, they will have had hubris beaten out of them, even though they are successful. Only people who are older really understand it. Young people don’t know that. They have to fail, in order to reflect and ultimately to succeed.
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Dr. Amanda Goodall is a Senior Lecturer at Cass Business School. Her research focuses on the relationship between leadership and organisational performance using mostly quantitative data. Her central argument (empirically supported) is that leaders should have a deep understanding of the core business of the organizations they are to lead. Together with with Agnes Bäker, she has developed the ‘theory of expert leadership’. The evidence supporting expert leadership comes from hospitals, universities, Formula 1 Championships, basketball, among professionals, and in large US and UK random samples of matched employers and employees.