If You Find a Rat on the Top of the Pole, Somebody Must Have Placed It there
Troubled companies are often the result of incompetent management. The rot at the top will fester downwards as they also hire incompetent sub-ordinates. A good leader must ensure that the right people are in place or there is good talent management. Then the rest of the business will take care of itself.
Management failure, loss of market share, bad debts and poor financial management are the common manifestations of an incompetent CEOs. Incompetent CEOs usually hire incompetent managers who may lack the necessary expertise, business acumen and skills to run the companys operations. These may result in untimely decisions and diminish the companys opportunities for growth and expansion in the ever-changing world of business.
It is good for companies to rotate the positions and management posts regularly. This will allow for the people rotated to handle new challenges and portfolio. It brings fresh perspective to issues not seen by the predecessors. It is also one good way to identify leaders. Exxon-Mobil has an executive development programme for the staff rotation every two to three years. Engineers are asked to be financial analysts and economists asked to become logistics executives, computer analysts, etc. Through such rotational programmes, staff are groomed for higher positions and responsibilities.
Turnaround expert Peter Tourtellot suggested over the years, companies tend to promote cadres of yes men to ever-higher positions. This happens because upper management likes being told it is on track. Being a part of the organisation for years, the acquiescent hires are finally promoted to their level of incompetence. At that point they become fearful of losing their jobs and make them even less likely to criticize the companys leadership constructively. Company heads should hire people with dissenting views if they want to have more balanced outlooks.
Most firms suffer from the weakness of having a team of homogeneous executives at the helm. Many of Compaqs top executives came from Texas Instruments and Firestone managers were gum-dipped. This uniformity was no coincidence as these executives were the products of management selection and promotion processes that produced a standard product. It deprives the company of the much desired diversity of views and catalysts for effective response to market changes.
Consensual decision making works extremely well when there is the luxury of time to obtain to the right decision. The bad news is that the right decision often comes too late and becomes the wrong decision. Consensual decision often proceeds at a glacial pace.
In a company, the yes men tend to find favour with the top management. However, they are usually promoted to their level of incompetence. To protect their rice bowl, they are unlikely to offer critical or dissenting views. This is why top management should encourage people with different views, especially if these are supported by sound facts.
To prevent a rat from getting up the pole, top management should have the discipline to remove dead wood in the company. It is important to perform periodic spring-cleaning of possible dead rats as well as live ones at the workplace if you want to prevent an epidemic outbreak. Good management means not just hiring the right person but also firing the wrong one. This is good talent management.
http://www.corporateturnaroundexpert.com
Dr Mike Teng (DBA, MBA, BEng, FIMechE, FIEE, CEng, PEng, FCMI, FCIM, SMCS) is the author of the best-selling business book Corporate Turnaround: Nursing a sick company back to health, in 2002. In 2006, he authored another book entitled, Corporate Wellness: 101 Principles in Turnaround and Transformation. Dr Teng is widely recognized as a turnaround CEO in Asia by the news media. He has 27 years of experience in corporate responsibilities in the Asia Pacific region. Of these, he held Chief Executive Officers positions for 17 years in multi-national, local and publicly listed companies. He led in the successful turnaround of several troubled companies. He is currently the Managing Director of a business advisory firm, Corporate Turnaround Centre Pte Ltd, which assists companies on a fast track to financial performance. Dr Teng was the President of the Marketing Institute of Singapore (2000 2004), the national body representing some 5000 individual and corporate marketing professionals in Singapore
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