Innovating companies unquestionably need the best people they can find, and are looking to hire the most intelligent, creative, and talented people possible.
Depending on how the terms are defined, and the method used for hiring top candidates (see my post on that), the result can be employees who are way more knowledgeable, smart, etc., than their higher-ups in the company.
This is a management minefield, and while a number of articles have come out about managing "geeks," many of the ones I have seen are well-meaning attempts to explain the nature of the geeks. By contrast, the focus here is about how a manager can deal with more-intelligent, more-experienced, and more-skilled subordinates.
Might as well address the elephant in the room: managing people with higher capabilities can feel very threatening to the ego, and likewise to one's position (if they're more talented, perhaps they can replace you!), which makes the task seem far harder than expected. Smart cookies tend to ask more questions, challenge managers more often, deviate from assignment specs in the name of doing something better, try to "improve" things that the manager thinks are sufficiently effective, explain things in detailed and complicated ways that others do not understand, and tend to question or ignore company policies that they find unreasonable (like getting around company firewalls to visit blocked sites). Each of these is tough to deal with by itself, but the full set can be daunting! Yet, there are a number of effective strategies that managers can use for handling these challenges.
First of all, turnover is expensive! All the costs of hiring, onboarding, and training add up to a significant sum, so it is far more worthwhile to learn how to manage someone effectively than it is to replace the person. Second, talent is hard to find, and talent has plenty of options if you or your company can't handle them. Recession notwithstanding (not to mention the many errors companies make in seeking talent), smart cookies are always in demand, and they are not a dime a dozen. If you find a smart cookie, keep it!
A smart cookie's job is doing; your job is managing. This is a key difference, and it's one that you must remember. Managing means providing tasks, goals, and resources, along with project integration, coordination, and timelines. As a manager, you should understand what your employees' jobs are, and how those jobs are generally done, but only so that you will be more effective in providing clear goals, reasonable tasks and timelines, the right resources, etc. Even if your smart cookies are twice as good at what they do as you would be, remember that this doesn't matter because you're not doing what they're doing, and you shouldn't have to do so, either. When you delegate tasks, remember that you are also delegating responsibility. As such, give your smart cookie all the freedom you can (see below) so that (s)he can mobilize his/her capabilities in the way that (s)he finds most effective. Correct and coach as necessary.
When managing smart cookies, this is the mantra. They don't have your job, and many of them don't want your job. When your smart cookie challenges you, start by remembering that you are the one with the authority, and that (s)he is not threatening that in any way (and probably has no desire to do so!). In most cases, the challenge is about the fundamental aspects of what the smart cookie is working on, such as the ultimate aim of the project, the method assigned for accomplishing it, or some rule or policy that doesn't make sense to him/her. Where possible, indulge the challenge, and make a time in the near future to sit down with your smart cookie for a meeting of the minds, and take advantage of all of his/her ideas (after all, you were smart enough to hire that cookie -- get every crumb you can!). Ultimately, you may need to override the challenge, but there are easy ways to do so (see below).
Sometimes, managers don't have the time or energy to indulge the challenge because they are juggling more balls than even their superiors would consider reasonable and they are stressed/frazzled/exhausted. If you are in those circumstances, take two minutes (rest assured, you have them!) and do the following:
1) Acknowledge the challenge
2) Point out that you don't have time to deal with it now
3) Acknowledge that (s)he may be right [perhaps even on every point], but that you/company can't deal with any changes [even if they are better!].
4) Where relevant, point out that the smart cookie's work is being integrated with other work and that there is no time to change the standards/specs for this project (and a reminder here that the perfect is the enemy of the good -- managers know this, but even smart cookies might not).
If you think you will have some time later, suggest that the smart cookie write up the challenge as a memo, clearly outlining the problems and solutions, and make a time for him/her to present it to you, and later to the team -- reward good memos and ideas with nothing less than public praise (if not some bonuses [see here for ideas]). If you think the employee will have the time to put some extras into the final product, offer him/her the opportunity to do so, and make sure to give it some attention, feedback, exposure, and praise/bonus if it is good.
In many cases, over-reliance on rules, specs, and procedures can cramp the talent right out of your smart cookie, and sap his/her initiative besides. As much as possible, provide your smart cookie with the leeway to pursue a goal as (s)he sees fit. Keep in mind that there may be a lot of questions up front as (s)he clarifies the main goals of the task, the purpose/meaning of the task, and what it is you really want. This kind of front-loading prevents people from bugging you throughout the project to get clarification on specs -- as interruptions are costly, and you're going to spend the time one way or another, make the time up front. Additionally, the front-loading provides sufficient background for the employee to take initiative and be creative in light of the project's goals. Thus, as much as possible, give smart cookies a desired end-result, answer their front-loaded clarifying questions, and then step back and prepare to be wowed.
You are the coordinator.
Even though smart cookies may have superior know-how with regard to doing, you have the coordination and integration skills. Just as you need to respect their capabilities, they need to respect your integration and coordination needs. Remind them of this as necessary, but remember that they are not in your position, and do not have your perspective. As such, even though their "better" ideas will make sense to you, they may be beyond the grasp of the stakeholders! It is your job as the manager to know what stakeholders need and can handle, and you may need to remind your smart cookie to respect your knowledge and experience in that realm (be as gentle with reminders as you would like them to be with their challenges -- it sets the tone!).
This is one of the hardest lessons for managers to learn, and also one of the hardest to articulate. This holds double when it comes to things like company policy. Consider this: many policies come about because some exceptional idiot did something irresponsible, and now everyone is presumed to be similarly idiotic.
Especially with your smart cookies, the latter assumption is a bad one. If they want to duck policy, and you don't see any harm in it, indulge them (or turn a blind eye). If your company blocks a gaming site, and your smart cookie likes to game while (s)he ponders (or needs that kind of break), what difference does it make if (s)he is working hard and his/her products are good? Don't assume that the game time would end up being productive work time -- people need incubation, and they also need breaks. Consider the flexibility and attendant frustrations of allowing minor violations as the costs of "Wow!"
Call it an indecorous truth if you must, but having smart cookies in your employ is an ego-booster. After all, it means you are awesome enough that top talent wants to work for you, you are clever enough to identify and hire top talent, and you have the top-notch management skills to keep top talent and enable it to produce great works.
Better than that, your group's fantastic products will get you and your team lots of recognition and rewards from your higher-ups (that can mean bonuses and promotions for you). Remember that you're in charge of the team, so your name goes on all the great stuff it produces!
3) This is a focal point in my research. Feel free to ask me about it or join one of my studies. </research plug>