Conceptual skills are the ability to see the organization as a whole, to understand
how the diff erent parts of the company aff ect each other, and to recognize
how the company fi ts into or is aff ected by its external environment such as the
local community, social and economic forces, customers, and the competition. Good
managers have to be able to recognize, understand, and reconcile multiple complex
problems and perspectives. In other words, managers have to be smart! In fact, intelligence
makes so much of a diff erence for managerial performance that managers
with above-average intelligence typically outperform managers of average intelligence
by approximately 48 percent. Clearly, companies need to be careful to promote
smart workers into management. Conceptual skills increase in importance as
managers rise through the management hierarchy.