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Why two functional periods are enough

For all organisations, the difference between success and failure lies in identifying and cultivating strong leadership. Without strong managers weaved throughout the organisation, it’s possible the entire company will stagnate and fail to deliver on the promise of its mission. But how many functional periods shall a manager remain in place?

Identifying strong managers isn’t quite as simple as conducting a performance review. It involves evaluating the totality of the manager’s contribution as well as their experience. And though it may not seem intuitive to think so, some managers stay well past the time when they’re still useful to the organisation. It’s common in both business and politics. 

To keep an organization energetic and vital, it’s critical to remove the possibility of managers staying too long in the same role. Now let’s take a closer look at why that is and how to manage that process. 

How do you define a “functional period?” 

A functional period is essentially four years. That means two functional periods is eight years, three would be twelve, etc. The optimal amount of time to have a manager in the same leadership role is two functional periods.  

What is the most important quality of a good manager?

There are obviously many qualities that make up a good manager, including (but not limited to): 

  • Good decision-making ability
  • Communication skills 
  • Conflict resolution 
  • Delegation 

You could ask 100 managers what they think is their most valuable skill and you may get 100 different responses. But one thing everyone could agree on is that it’s important for a manager to bring extreme creativity to their leadership role. 

Managing involves problem-solving on a daily basis. This can mean solving a variety of problems: issues with a customer, with a client, or a dispute between employees or about how to get a specific project done. While all team members are tasked with lending their problem-solving ability to an organisation (or, at least, they should be), it is the manager who is responsible for making the final say on a path forward. Often, this means it’s up to the manager to solve problems. 

This involves taking a creative approach to many of the daily issues facing a project. Managers are also expected to bring new ideas to solve problems the team may not even be aware of. They should be forward-thinking, filled with ideas that look to the future as opposed to remaining stuck in the past. This can involve incorporating new kinds of technology, taking new approaches to old customers or clients, winning new business, or developing new products or deliverables that will help the team fulfill its mission in a new and different way.  

Why two functional periods is more than enough for a manager

A study conducted from 2000-2010 of over 356 companies found that the optimal length for a CEO’s tenure leading a company is 4.8 years or slightly longer than one functional period. 

This can obviously vary, and a CEO is certainly capable of providing value to both their company’s employees, customers, and stakeholders well after four years. But two functional periods is a more than sufficient amount of time for a manager to provide value to a specific project.

Eight years is more than enough time for a manager to show their strengths as well as their weaknesses. If the manager was effective, they were able to initiate many changes while improving productivity and profitability. But even if they’re good, how many new approaches can they apply to old problems? You can assume they implemented all they were able to implement in eight years’ time. Creative thinking can be a finite resource, and there are only so many ways to approach recurring problems in a new light. 

If the manager wasn’t able to bring new ideas to the position in eight years, it can be reasonably assumed that they won’t be suddenly becoming a strategic-thinking problem solver in year nine. You’ve seen what they can do in a position of leadership, whether it’s good or bad, and the time has come to move forward. 

What should you do after 2-3 functional periods? 

Once a manager has had two, or at most three, functional periods in one leadership role, it’s time to move on. That doesn’t mean you have to let the individual go. It could mean they’d be better served in a different leadership capacity within a different department. But after 8-12 years, you know what you have in a leader at a single position. 

Now it’s time to identify new managers from a new talent pool. These candidates can come from one of three places: 

  • Internal team members. These are team members who have been in non-leadership roles on the team. 
  • External candidates. These are individuals outside your organisation that aren’t currently employed by your company. 
  • Internal, non-team members. These candidates work for a different department – they either have zero experience working for the team or worked on it and moved elsewhere. 

Each category of candidate can bring a fresh perspective to the team. Each one has its positives and its negatives. Internal team members typically possess the most institutional knowledge since they have experience working on the team. They could also possibly be stuck in the same stagnation loop as your previous manager if they’ve been in the role too long. External candidates can bring a fresh set of eyes from outside the company, but may also need a lot of training due to being unfamiliar with company practices. Internal, non-team members can be the best of both worlds – understanding the company’s unique culture while still having an outsider’s perspective. 

No matter who you bring on, it’s important to look for someone who can instill a new approach and a new culture while still reinforcing what made your last manager great. 

Summary

As effective as top managers can be, you shouldn’t keep them in the same role for more than two functional periods. This is a good idea for both the team and the manager. It allows the team to avoid falling victim to having the same vision from leadership for longer than a decade. It also gives the manager an opportunity to grow professionally in a new, potentially more challenging role. It’s a win-win for everyone. 

We want to help you identify the necessary organisational changes in your company. For more on how we can do that, contact us today

By Georg Tichy

Georg Tichy is a management consultant in Europe, focusing on top-management consultancy, projectmanagement, corporate reporting and fundingsupport. Dr. Georg Tichy is also trainer, lecturer at university and advisor on current economic issues.

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