Beyond Operations: The Path to MD
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In my coaching, I find myself pretty often in conversations with Directors of Operations who are eyeing the next rung on the corporate ladder: the role of Managing Director. They are not novices. They are seasoned professionals, very structured, very disciplined, with a formed eye for people and processes, often handpicked by their organizations for leadership development. Some of them have already been taken into consideration for the soon-to-come succession for the Managing Director position in the same company and they were given a heads-up about the existent intention and openness.
Yet, they find themselves grappling with a unique challenge. They sense a credibility gap and feel something is missing to reach that level of performance at the CEO level, however often they cannot pinpoint what is all about. Because they have been given the hint the shareholders or the board would prefer someone with a business development or commercial background, they feel like they need to add new knowledge on marketing, contracts and negotiation. Some of them who are running the operations in different regions than their headquarters, feel it is the level of English they speak the culprit. Soon in the coaching, it became obvious they already graduated from management or engineering studies, in English, and their language was perfect for an outstanding degree, as well as for conducting effective communication in English with their external counterparts.
One thing strikes me: they are all sure they want the position of Managing Director and that their transition into that position will be smooth provided they focus on acquiring new skills in understanding the market and contracts, and contract negotiation. While already having taken the decision to move ahead and doing their best to keep up with learning new technical knowledge, their inner feeling of not being able yet to project the right type of credibility lingers, and in some cases bursts into frustration, in other cases in a feeling of disappointment with self.
The 7 Key Mindset Differences
While having the right kind of technical and management background helps a lot in understanding the elements at play and how they interact or need to be played differently at the levels of OD and MD, understanding the mindset differences between an Operational Director and a Managing Director is essential for even deciding whether you are the best candidate for the job and how challenging will be for you the transition if you decide to go full steam ahead.
Understanding deeply the scope of the role of the Operational Directors, it is easy to notice the ODs have a “guardian” approach. In Operations, the words of the day are predictability, efficiency and repeatability. Each of these 3 qualities of operations needs first to be developed and reached, and then to be guarded to remain unchanged as long changes in the market conditions do not call for a change in operations. Therefore, the ODs will be the first ones saying NO to any major change in the company’s structures, processes or capabilities, irrespective of who is asking for them: whether the sales, the business development, the Clients or even the MD.
Here are the 7 key aspects you may want to consider in assessing whether an MD position is for you if you have a strong executive operational background.
1) Risk Tolerance
Operational Directors often focus on minimizing risks to ensure smooth day-to-day operations. They are risk advert. Often, it is their primary nature to be the first to identify the risk and plan for staying away from it which leads them to land the Operations Manager position: as a reward for being able to organize processes and people to keep risks away and make operations and production smooth and predictable.
In contrast, Managing Directors need to be more open to calculated risks that promise high rewards. No shareholder wants their company to remain in the same market position, therefore shareholders or boards will create pressure through ambitious sales or development targets. This involves a need for a risk-intelligent mindset, where the focus is not just on avoiding failure and maintaining everything frozen, but on seizing opportunities, testing them, and then, shifting the entire company or enlarging its operations to incorporate that opportunity into the fabric of the already existing organization.
The shift from being a risk advert to taking risk-intelligent strategic decisions is a mindset leap that often confronts brutally the confidence of any Operations Director going through the transition to Managing Director.
Operational Directors are masters of the here and now. Their focus is on immediate tasks, ensuring that projects, products or services are executed efficiently and effectively. They are rewarded for their ability to manage the present, making sure that all cogs in the machine are functioning as they should. However, they do this by comparing three timelines: the immediate past, the present and the immediate future. They look at variances from what has been budgeted, they have to understand where these variances are coming from and make decisions that bring the execution back, within the budgetary constraints. They assess things based on exception: what is working well requires not their attention, however, what needs to be corrected, streamlined or improved gets their immediate focus. The Operations Director leads from a perspective that something there might not go as set, and better catch it before something “wrong” happens, because otherwise the entire "production" will be affected, and we cannot allow this to happen.
On the other hand, Managing Directors must be forward-thinking. They are expected to set the long-term vision for the company, aligning various departments and resources, operations included, to achieve that vision. Of course, the Managing Director will not do it alone, but with his/her senior executives. In this respect, the ODs may be involved in building the operational strategy of the company. Still, from a Managing Director's perspective, this long-term vision requires a shift from a tactical to a strategic mindset, where the emphasis is not just on doing things right but on doing the right things for the future of the organization. It involves scenarios, it involves openness to see what is outside and, in that picture, what else might be possible for the company. Daily, the Managing Director takes for granted that things are run as usual or standard in operations, only because they need to be able to focus externally and they can rely on their Operations Director to deal with the details.
As the man who left his tribe for the very first time, the OD transitioning towards an MD position will have to learn to cope with being exposed to whatever is external to the tribe, clients, collaborators, competitors, authorities, shareholders or boards, etc, new cultures or business environments. This is no small stretch, and it can become overwhelming and energy-draining for the unprepared professional not used to being self-aware and/or having unrealistic expectations about themselves.
3) People Management
Operational roles often involve direct oversight of a team or a department. Managing Directors need to inspire a broader range of team members and departments. Their leadership style is usually more hands-on, focusing on individual tasks and short-term objectives.
As a Managing Director, one must be adept at leading senior leaders, a skill that requires a different set of motivational techniques than leading middle or first-line managers. Not to mention it requires the ability to intelligently discuss functional topics belonging to the other aspects of the organization besides operations, and retain command and project authority while doing it. Moreover, the MD is the one responsible for building the right culture for the company, and that requires looking beyond the well-being of the people in Operations, to all organizational stakeholders and to the entire ecosystem in which the organization functions and the impact the company creates.
This shift is often perceived by the Operational Directors as a loss of contact with important people who for years were loyal supporters, and is not rare for the transitioning Managing Directors I work with, to feel as if they have betrayed their former collaborators, including for having to bring in a new Operations Director to replace themselves. As in any “split” it takes time for any OD transitioning to MD to upgrade or build internally the relationships with their direct reports, and especially to shift the boundaries for efficiency and performance in all their significant work relationships.
4) Financial Acumen
Understanding P&L is crucial for Operational Directors especially for they are often kept responsible for the company’s EBITDA. They are rewarded for their ability to control costs and maximize operational efficiency. In time, they develop a sense of the sources of waste or overspending and their focus will be on maintaining the cost as low as possible, through optimum efficiencies.
Still, a Managing Director needs to grasp the financial ecosystem of the entire organization. This includes not just P&L but also balance sheets, cash flow, and capital allocation strategies, requiring a shift from a departmental to a company-wide financial perspective grounded in market practices and aligned with the company’s objectives in the market.
This shift means not only new specific knowledge but also lots of calculated confidence in the face of the unknown, faith and trust in the ability of the company, in self and in all other key people to execute and deliver the short-term strategy and the long-term vision.
5) Decision-making Speed
In an operational role, quick, on-the-spot decisions are often required to keep processes running smoothly. Managing Directors, however, often have the luxury - and the burden - of taking more time. They must weigh more variables, consult more stakeholders, and consider the long-term implications of their decisions. This requires a shift from reactive to proactive decision-making, where the focus is not just on solving immediate problems but on creating long-term value. Acting fast instead of strategically can lead to fatal mistakes at the MD level.
6) Communication Style
Operational Directors are often straightforward and directive, focusing on clarity and efficiency. They are rewarded for their ability to convey complex information in a simple, understandable manner for the low-rank managers as well as the employees of the company. Often, time being of the essence in execution, communication resembles instructions where ODs expect others will ask if not understood or will stand up and say if they see something that needs to be escalated. Usually whatever is escalated is a problem, something that needs immediate attention or correction because left "untreated" has the potential to disturb the operations.
Managing Directors communicate from a different perspective and with a different intention. They need to make sure that communication across the organization takes place and that all parties are heard. Moreover, they need to make sure everyone is aligned with the organizational vision and goals. As such, they must master the art of persuasive and inspirational communication, which involves a greater focus on narrative and emotional resonance. As well as the need to be in the forefront, and exposed. Managing Directors know that results are obtained through actions and actions are obtained when people from various teams and departments are emotionally connected to a common goal, i.e. the organizational goals. This involves a greater focus on storytelling, walking the talk, and being comfortable with being exposed to other people, or being comfortable with being vulnerable. Again, this shift is a major challenge for Operating Directors. While very comfortable with walking the simple talk in a smaller environment, having to elevate their game at a different scale gets sometimes scary or overwhelming.
7) Stakeholder Engagement
Operational Directors are typically concerned with internal stakeholders like team members and suppliers. Managing Directors must be adept at managing a broader range of stakeholders, including board members and investors. This requires a more nuanced understanding of governance and a greater emphasis on relationship-building and public relations.
The concept of executive presence is another area where the roles diverge significantly. It's not just about how the roles differ; it's also about how much it differs embodying the leadership qualities that inspire confidence and respect across all levels of the organization in each of these two positions. While this topic is so vital that I will dedicate the entire next edition to it, I will now look at how the two roles differ at two levels: emotional intelligence and adaptability.
While emotional intelligence is important in any leadership role, it takes on a new level of complexity for Managing Directors. They must be attuned not only to the emotional climate within their team but also within the broader organization and among external stakeholders. This requires a heightened sense of empathy, self-awareness, and the ability to manage complex interpersonal dynamics at scale.
Operational Directors are often rewarded for creating stable, efficient systems that withstand the test of time. From this perspective, Operational Directors are naturally tuned to order and structure and find value and comfort in maintaining a strict routine. First of all, it takes a person to like maintaining the routine and to feel he or she adds value through maintaining systems unchanged, and occasionally allowing for minor corrections. Furthermore, Operating Directors are rewarded for setting and maintaining such routines. Too much time lived in routine, even with the best intentions, creates the habit of being able to relax only when routines and their structure are there.
For Managing Directors, their role will be felt as anything but routine. In this fast-paced changing world, MDs must be prepared to act on pivoting their vision and strategies so that the company remains relevant in the market. This means preparing the organization to shift or let go of parts, products, markets, and systems in response to an ever-changing business landscape. This involves not just reacting to change but proactively seeking it out, leading the organization through periods of uncertainty, and emerging stronger on the other side while being able to retain the trust and goodwill of clients, collaborators, authorities, employees, management, boards, and shareholders.
In the realm of management, there's often a misguided notion that the only direction for success is "upward". This mindset can obscure the fact that one’s value isn't solely determined by one’s title but by the impact one makes and the problems one solves.
Many professionals reach the end of their “Operating Director” professional phase and feel the need for a change. Still, with fewer and fewer options to choose from at that level of expertise and exposure, the common belief is the obvious next career move is about ascending the organizational ladder.
Before you commit to a path, you need to fully understand what that path will mean for you, and in which way you will be stretched or challenged in that future role. Understanding the differences in mindsets of an Operating Director and a Managing Director is very important before even deciding to launch yourself in the pursuit of a Managing Director role.
Consider these three compelling reasons: misalignment, lack of preparedness, and stress and burnout.
A mismatch between your skills and your role's requirements can lead to career stagnation or even regression. While management and technical knowledge are easy to learn, practical management takes time. As in all other areas of life, one will need later in life much more energy to learn skills such for example networking, social skills, self-awareness, empathy, and conflict resolution.
Lack of Preparedness
Stepping into a role without fully understanding its demands can result in ineffective leadership and both self and team disillusionment. You will be surprised by your recent lack of performance and most probably it will even take some time to internalize it as such. Rather, you will feel the environment is resistant and will have a hard time understanding why. Taking time to understand how the new role will differ and what that will require from you, and envisioning yourself in those new conditions is a very useful exercise for anyone to change their job or already transitioning needs to do.
Stress and Burnout
Holding different expectations about your role and what success should look like for you in this new role is rooted in misunderstanding the role's requirements and can lead to unnecessary stress, affecting both your performance in the job, your reputation, your well-being, as well as the wellbeing of the entire systems you are part of.
Envisioning what will be like for you in that role is not a simple exercise. You have limited reference for it since you have not been there yet. If you're contemplating this significant career transition, I strongly recommend working with an executive coach. Navigating these complex transitions is far more achievable with a guide by your side, especially a guide who has been there herself/himself and lived many of those situations and circumstances.
If you think you are going through such a transition or are already transitioning, let's talk . It would be an honour to be your thinking partner and work together to elevate your game in all your essential leadership aspects and clarity so that you can make a well-informed decision about your next career move, and set yourself the best conditions for reaching fast success and sustained performance, while creating a fulfilled and meaningful life for yourself.
You should never underestimate the power of clarity and self-awareness in your journey. Ultimately, it will be you saying if the Managing Director position is for you or clarifying your professional aspirations and next career moves. Still, that will be a decision taken in full awareness. Once taken you will know exactly what makes you stand for it. You need to know it since there will be many times along your future journey as a Managing Director to revisit the moment when you took it.
Embarking one-on-one executive coaching is a pivotal step for any manager aiming to scale their organizational impact. A coach, enriched with prior executive experience, serves as a robust thinking partner, aiding managers in deciphering these intricate levels and attaining clarity and focus.
If you are looking to build self-awareness I invite you to participate in the next group coaching program called “Master Your Resilience with Positive Intelligence” starting October 14th. This program is meticulously designed to assist managers in reshaping their inner dialogues so they can actively work the gaps between where they are today and the best version they know they can be capable of. The program is a journey of self-discovery and development, allowing the 6 participants in the program to harness their inner strength and resilience to navigate the ever-evolving managerial landscape effectively.
Whether it’s through executive coaching or resilience programs, let’s embrace the journey of continuous learning and growth together. Thank you for reading this edition of The Thriving Mindset. Click on the previous link if you want to read any other previous issues. If you feel your friends or colleagues will benefit from it, share this email with them.
Until next time, keep thriving!
Your Management Performance Coach
In the journey from an Operational Director to a Managing Director, professionals face a complex transition that goes beyond acquiring new technical skills. They often face with a credibility gap and struggle to pinpoint what's missing for them to perform at the Managing Director level. The transition requires a shift in mindset across multiple dimensions, including risk tolerance, vision, people management, financial acumen, decision-making speed, communication style, and stakeholder engagement. Emotional intelligence and adaptability also play crucial roles in embodying the leadership qualities needed for the Managing Director role. Before committing to this career path, it's essential to understand these mindset differences and consider working with an executive coach for a smoother transition.
- The transition from Operational Director to Managing Director is complex.
- Credibility gap and unidentified missing elements for MD-level performance.
- A shift in mindset is required across multiple dimensions.
- Risk tolerance: From risk-averse to risk-intelligent.
- Vision: From managing the present to setting long-term goals.
- People Management: From team oversight to inspiring a broader range.
- Emotional Intelligence and Adaptability are key for executive presence.
- Not understanding the new role, will lead to underestimating what it takes for an OD to transition into a performant MD, with the risk of failure.
- Partnering with a coach helps both in making the decision to embark on a such transition, but also after when the former OD needs to accommodate or adjust fast to the requirements of the new role.
- Book your 1:1 complimentary strategy session with me here.
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