Are specialist skills important in executive-level jobs

New CEOs have a tendency, not unreasonably, to see the companys salvation in fixing those problems they have the right experience to address. Lars Olofsson took over in 2009 as CEO of Carrefour, also, like Tesco, a leading international food retailer but with its core business in France. Olofsson came, like Dave Lewis, from a consumer goods marketing background. Not surprisingly, he focused on rejuvenating the brand image and consumer perception of Carrefours French hypermarkets. That focus didnt fix enough of Carrefours problems. In 2012 Olofsson stepped down to make way for a new CEO who, this time, has a background in both food and fashion retailing.

To pick a new CEO who takes the right focus, the non executive directors, particularly those on the nominations committee, should understand the key strategic problems and opportunities the company faces. So what was the Tesco Boards opinion about the nature of Tescos problems and opportunities when appointing Dave Lewis

Tescos Chairman commented at the time that Tescos current strategy was the right one but the new CEO would have free rein to set the direction as he saw fit. In combination with Tescos more recently revealed accounting problems, overstating profits by 250m in the first half of this year, this does not give one great confidence that the Board chose the new CEO with a clear view of the problems and opportunities and hence of the specialist skills the new CEO would need. Tescos Board could not have been expected to develop such a clear view, given their professional backgrounds. Some diversity on a Board of directors is valuable but not at the expense of more obviously relevant experience. No Tesco non-executive director involved in appointing the new CEO had a retailing background.

The right specialist skills are important at the top not just for the CEO but also for the board of directors. The bad news is that Tescos Board was lacking in some of what it takes and it is hard to say if the new CEO has it either. The good news is that there have been enough cautionary tales recently about CEOs of leading retailers with lack of the right specialist skills, that Tescos new CEO will be all too well aware of the risks of lacking the relevant background to have an intuitive grasp of the problems and opportunities.

To succeed without a retailing pedigree, it will be particularly important for him to assemble the right team of executives and advisors. Alan Stewart as new Finance Director is a good start; he has a background at Marks and Spencer and WH Smith, two retailers that, in different ways, face similar problems to Tesco. And, at the risk of creating a large and unwieldy Board of fourteen people, Tesco has now proposed the appointment of two new non-executives, one of whom is a former retail CEO, to give Lewis and his top executive team some support in thinking through the strategy.

Good general management and leadership skills are essential at the top.They are needed to organise, control costs and motivate. But do specialist skills contribute to the judgement and creativity needed to transform and grow a business Managers with the right specialist skills are often in short supply or employed too far down the organisational hierarchy to have an impact. It is time to give specialist skills more weight in selecting CEOs and Boards.

But there is a catch – those doing the selecting need some specialist skillsthemselves to spot the skills really needed.

Felix Barber is a Director of the Strategic Management Centre at Ashridge Business School. His book ‘Collaboration Strategy: How to Get What You Want from Employees, Suppliers and Business Partners’ was published by Bloomsbury Publishing in September this year.

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