Why Silicon Valley Lacks True GMs?
I made the comment in an earlier post that Yahoo now needs true GMs, not just glorified functional managers. As I wrote that piece, it made me reflect on the significance of what I just said. Silicon Valley is not a place that has that many true General Managers. In the sense that GE or 3M grooms GMs, the valley simply doesn’t. The structures of the companies are such that there are hardly any GM jobs.
With one exception. The valley, because of its history and culture, has numerous people who have been startup CEOs, and whether or not they were good at it, have had the experience of the full-scale General Manager function. While these entrepreneurial managers may have come up the ranks of engineering or product marketing, at some point, many of them have had to raise money, manage sales, do biz dev deals, and manage finance.
Few of these people, however, end up wanting to go to large companies to become GMs. Why? They lack one essential skill, and they are afraid of one important unknown. The skill they lack is political experience to navigate a large matrix organization. The fear they have is of not having control over their deliverables, since there are too many pieces that they don’t control.
The internal folks, who have stayed for a long time inside the company, often have learned too much of the political skills, and are really good at excuses and finger pointing. Result? Nothing gets done. Brownian motion rules. Yahoo is the best example of this phenomenon these days.
The entrepreneurial GMs, the getting things done types, are risky hires, because they don’t have proven track-records in navigating the large company environment. You could try to convince them to come in as functional VPs, and get oriented in the environment, but that often doesn’t fit into the career timelines of the segment. They are traditionally not known for their patience.
So now that the valley is maturing, and large technology companies need true GMs, where are these GMs going to come from?
You point out a real problem. Generalists GM (the GE type) are not successful very often in Silicon Valley, in part because they lack domain expertise and cultural sensitivity with our ecosystem. One way to “derisk” the situation is to pair them with a close partner, on staff, with deep functional expertise (e.g. CTO type or VP Marketing). The alternative is to look to the few, large Silicon Valley companies who have had to adopt a structure of Business Units and Divisions, have a rich stable of proven GMs, and have retained entrepreneurial urgency (e.g. Cisco, Applied Materials, Intel, perhaps HP?).
Hi Eric,
Don’t you think, while the GE-style pure generalist GMs may not be as successful in the valley, the valley executives who have worked in various domains of technology have fairly strong transferable skills?
There is this notion in the valley that looks for “deep domain knowledge” which is extremely narrow. I would argue, that type of narrow perspective does not at all create strong GMs, and has been part of the valley’s problem.
Ofcourse, your point of pairing GMs up with strong domain experts in functional jobs is absolutely right, because the domain knowledge does need to exist in the company / Business Unit.
I just find it very strange, the valley’s obsession with domain knowledge in the GM/CEO role, where I would argue other skills - leadership, quick decision-making, broad-based intellect that can rapidly process lots of input - are more critical.
Sramana
Hi Sramana,
Clearly, specialized domain knowledge is not indispensable. You can fill the gap by strengthening the GM’s team with strong functional experts. In your list of critical skills, I would add cultural sensitivity. Many GMs don’t “get” Silicon Valley, let alone blend with it. I am talking about the same syndrome that was described in a recent issue of BusinessWeek magazine in their coverage of 3M. They made the point that the GE 6 sigma culture that McNerney brought to 3M managed to self righteously kill their spirit of innovation.
Yes, well, the Terry Semel situation at Yahoo has also been a mixed bag. Semel didn’t really get Silicon Valley either. Although he managed to turn Yahoo around in round one, in the process, the culture really has become very confused.