Leadership Turbulence - Essay Example

?Temasek Holdings: Leadership Turbulence For such a large enterprise, Temasek seems to have seriously hit a bad time. A company’s leader is not just someone who takes all the decisions for the company, more that often, the decision is not entirely his, but of the board members. The leader is the face of the organization, the representative, the person everyone looks up to. When the company is doing well he gets praised, and when there is a scandal, he gets blamed. At Temasek Holdings, leadership is a big issue. The paper will go through how, with proper leadership succession planning, Temask Holdings could have avoided being in such a soup. Succession planning is a process of identifying and developing people from within the organization with the potential to fill key leadership positions in the company. It increases the availability of experienced and capable employees that are prepared to assume these roles as they become available. It is now combined with leadership training and the processes together are very essential for the functioning of an organization. There are very many advantages of filling up the positions with existing employees, such as, they are already familiar with the values and the methods of functioning of the organization, the people of the organization already know them and thus it will be easier for them to fit in. Also, giving people such an opportunity ensures that they will work extra hard to get trained and developed so that they can fill in the gap required and aim for a promotion. Using internal employees also helps cut down on costs that would come up from the relentless head hunting activities for filling in a high post and gives out the message to the employees that the organization is closely knit and would rather give them the opportunities first. LITERATURE ARGUMENTS: Succession Planning Succession planning plays a very important role in regenerating a company's leadership, but quite often, the promises of traditional succession planning are not delivered. The whole purpose of succession planning in an organization, according to Leibman, Bruer and Maki (1996), is to develop a strong leader, not choose, but develop. This is because every organization has different needs and requirements from their leader. Allio (2007) insists that it is necessary to strategically build strong leadership teams in an organization, so as to meet these requirements. He discusses the importance of having good leaders in an organization and the effects that rogue leader can have. Barsh, Capozzi and Davidson (2008) on the other hand discuss the importance of the integration of innovation into the strategic management of the organization. Leibman, Bruer and Maki (1996) write about the factors that play prominent roles in the development of these leadership teams. One of them is non discriminating hiring, which has led to work places being more diverse, in terms of gender, religious background, age group and ethnicities, all trying to balance home and work, to contribute to a better standard of living for the entire family. Thus, with increasing diversity in the workforce, it is essential that this factor be taken into account in the leadership development programs of organizations. Their research has shown that to achieve better results and higher productivity, corporations have begun to make changes in their structures. Allio (2007) adds to this view by stating, tall organizations are out, making way for a more lenient, flat structure that gives people greater authority and accountability, but also reduces chaos in the organization and encourages team efforts. This further contributes to the focus on preparing leadership team, rather than individuals. Also, having a team gives an organization more options and points of view. Barsh, Capozzi and Davidson (2008) provides an additional perspective that, this in some way makes the decision making process more efficient, if not easy, for the simple reason that more than one opinion is taken into account and all options are considered. Succession Planning plays a very important role in the smooth functioning of an organization, especially maintaining a sense of consistency and ensuring that the organization is not put in a spot with any sudden requirements and changes for executive positions. It ensures that the organization is always prepared. It also plays a key part in keeping the senior management united in the quest for ensuring that the next leader fits the bill. Succession Planning and its importance Kohn, Khurana and Reeves (2005) talk about too many CEO’s considering succession planning synonymous to digging their own grave. These CEO’s forget that in the advent of any kind of organizational change like a merger or acquisition, the organization undergoes a lot of changes and restructuring. If one is not ready with the right kind of people, one might as well bid adieu to any kind of sanity in the work environment. Barsh, Capozzi and Davidson (2008) validates the above point by stating restructuring often calls for hiring a new set of people based on the new values and conditions or promoting junior managers without properly checking if they are apt for the job, and doing so in haste could be disastrous for the people and the company. This is why succession planning plays such an important role in the functioning of any organization. It ensures that one is always ready with the next generation of leaders, so to speak. In their study, Kohn, Khurana and Reeves (2005) have considered the case of Tyson Foods, wherein the CEO wanted to make bright leaders from his organization. He studied the functioning of big corporate companies like GE and was very frustrated with his inability to do the same as them. He began from scratch. He built a task force of people who would evaluate every single of his managers, including him and help in preparing them for future necessity, hence succession planning. Succession Planning: The biggest error The problem with many organizations is that they leave activities such as succession planning and by extension leadership development, to the Human Resources Department and thus miss out on a lot. They do not see the need to get involved in an activity that is an extension to simple training and development, which is usually the job of the Human Resources Department. They forget that this activity is meant for the purpose of filling in high authority posts that the Human Resources Department may not fully be able to comprehend and train for on its own. Engaging the management and the board in this activity is crucial. It can help a company to align its leader development program with its strategic objectives and help the company build a clear reputation and identity with its employees. This sort of clarity can help the organization build its human pool and thus make its leaders of tomorrow. Succession Planning: Rules that would make it easier for Temsek Holdings Temasek Holdings as an enterprise needs to follow certain rules when it comes to succession planning. Conger and Fulmer (2003) have discussed the five rules for Succession Planning that they feel every company must follow. First rule is to focus on development. It must be understood that succession planning is more that making long lists of what qualities and qualifications one needs in the next leader, and should focus more on developing the next leaders in ways that will ensure that they will fit the bill in future. Next rule is to identify and work on job positions that are most essential and work on the succession planning, not just at the top most jobs, but also begin leadership development at the middle level management. The third rule for succession planning is to make the entire process transparent for all the employees to know of. This not only avoids heartbreak and disappointment, but in a way motivates the other employees to work harder. They know that as long as there is a succession planning program on, they do have a chance to be part of it if they show some improvement and leadership spirit. The fourth rule for succession planning is to simply measure progress on a regular basis. It is not just enough to have a succession planning or leadership development program in place. Measuring the progress of the candidates and checking which job they are more inclined for is also essential. It will not do if a particular candidate is showing tremendous progress but just based on that he is filled into the first open spot. It is essential that he be right for it. The final rule for effective succession planning is to keep it flexible and simple. Traditional succession planning involved long lists of people and their qualifications. But now, since the inclusion of leadership development, succession planning can be more flexible and simple. It is important that the candidates understand what they are getting into, what duty, what department, since a sudden change in a job profile is a sudden lifestyle and work place change. Conclusion Temasek Holdings was not prepared for a sudden change of CEO. Even thought they thought they found someone in Goodyear to take over the company. The problem lay in the communication and the lack of faith to let Goodyear take control of the organization and run it his way. While this is understandable, as the company would not want to completely give its reins in the hands of a new person, the communication should have been completed before the signing of the deal. What happened was, the company got a lot of negative publicity, as did the people involved, Goodyear and Ching. Here, a Succession Planning Program would have definitely made a difference. References Allio, R.J. (2007). “Bad Leaders: How they get that way and what to do about them.” Strategy and Leadership 35(3): 12-17 Brash, J., Capozzi, M.M and Davisdson, J. (2008). “Leadership and Innovation.” The McKinsey Quarterly 1: 37-47. Cohn, J.M., Khurana, R and Reeves, L. (2005). “Growing Talent as if your business depended on it.” Harvard Business Review 83 (10): 62–70 Conger, J. A and Fulmer, R.M. (2003). “Developing your Leadership Pipeline.” Harvard Business Review 81 (12): 76-84 Leibman, M., Bruer, R.A and Maki, B.R. (1996). “Succession management: the next generation of succession planning”. Human Resource Planning 19 (3): 16-29. Read More