Where have all of the General Managers gone? HBR has recently run a couple of articles on this topic (Bring Back the General Manager – 7/10) and I couldn’t agree more with the findings. With the constant pressure to demonstrate quarterly profits and to find dollars to invest in growth opportunities, organizations have been trying to be as lean as possible. They are seeking to garner every efficiency that they can out of the system. One way corporations have done this is by merging smaller businesses into larger business groups and cutting out any redundancies with the new organization. The elimination of the general manager position in particular is not just due to the recent economic downturn but has been going on the better part of the last decade. After a few iterations of narrowing the food chain, an organization can be quickly left with too few good leaders who are equipped and able to lead a team of cross-functional business directors. These “Leaders” might have functional expertise in their discipline but they are lost when it comes to setting a vision and strategy their broader business.

Ron Ashkenas (@rashkenas) the author of the article notes that for “talented people” who want to run a real business those opportunities are fewer and fewer in large companies and so the talent leaves for smaller companies and start-ups. Ashkenas goes on to suggest that “corporations need these people too, now more than ever.” He has three ideas on how companies can help foster this cross-functional skill building:

• Turn discrete customer segments or geographies into P&L units, giving some autonomy to these leaders in driving their businesses and building their skills.
• Allow for at least two types of career paths with “functional specialties” and “cross-functional generalists”, giving at least some managers a broader exposer to the organization and general management opportunities.
• Carve out innovation incubators that will not only build new businesses but also allow for general managers to learn and grow with a smaller P&L responsibility. Ashkenas highlights that “Having entrepreneurial opportunities inside large companies will attract and retain talented people who have the inclination to run full-scale businesses.”

A friend and former colleague had recently shared with me his confusion while working for a “leader” who became upset when he asked for his help in seeking a new role within the organization.  My friend was looking for a position where he could grow his cross functional experience. Reflecting back on the situation my friend thought that his boss’s frustration stemmed not from his lack of loyalty but from the fact that his boss didn’t know how to help him because he too lacked cross-functional experience.  His boss didn’t place a value on it. For companies to get back to full throttle they are going to need leaders with general management experience.  Your not going to get that experience from spending your entire career working in a functional silo.