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| Pradip Chanda, is a turnaround consultant
based in Delhi. He is the author of The Second Coming--Creativity
in Corporate Turnarounds |
It
never ceases to amaze me as to how long a rope is given to the top
management team of a company that is hurtling down towards bankruptcy.
Most companies start losing ground slowly and
the slide accelerates only when the management refuses to read the
writing on the wall. This malaise appears to be more pronounced
in family-owned companies because the owners are at full liberty
to change the CEO and his team without having to go through the
formality of consulting the board. This is understandable if the
CEO fails to see his own limitations and is therefore unwilling
to concede that he is no longer the right man for the job. His desire
to continue on the hot seat thus becomes a problem.
The problem
gets exacerbated when his senior colleagues begin to see him as
an object of sympathy. In such cases, the CEO gets the benefit of
the doubt.
Such sympathy is dangerous in a corporate environment.
By forgiving the errant judgment of the CEO, the other managers
are, in fact, reneging from their responsibility of being effective
managers in their own domains. They are in effect colluding in the
destruction of the company they work for. Few realise that in the
process they are also jeopardising their own future.
In such a situation, the senior managers have
a decision to make. Accepting that they are puppets on a string
orchestrated by an unseen puppeteer via the CEO, for whom they have
no respect left, is one option. Needless to say, this apathy led
to disaster.
The other option is to stand up and be counted.
This is not easy in the work environment that prevails in most family-owned
organisations. To begin with, the culture is paternalistic and the
CEO is treated with as much deference as the owner. Such paternalistic
cultures are not confined to family-owned organisations only. There
are many MNCs that have managing directors who have earned their
reputations as modern day Maharajahs.
But standing up, in reality, is not that difficult.
A manager who knows his job and has confidence will always be able
to garner the support of his colleagues. He can, with his colleagues,
point out to the CEO where and how things are going wrong and how
they can be set right. If a point is forcefully made in a team meeting
and supported by the other members of the management, the CEO will
be forced to sit up and seriously listen to his team members. If
the suggestions are good enough, he may even try them out. In case
things backfire, the CEO can always find solace in the fact that
there is a ready scapegoat available.
If the CEO remains uninterested, the senior
managers must find a way to get their views across to the right
quarter. Any executive, who has worked in an organisation for some
time, knows how to activate the informal network. He also knows
when and how to present his point of view across for maximum impact.
Why is it then that in most cases the senior
people don't manage to go beyond the CEO? A common reason is loyalty
to the boss. But the argument is flawed because loyalty must be
to the company and its stakeholders and not to individuals who are
tarnishing the goodwill of the company.
At times managers hold themselves back for
fear that any such move will be interpreted as a personal ambition
to takeover the CEO's job. Such apprehensions are valid only when
second-rung managers are unsure of their own responsibilities and
indifferent to the problems hounding the company.
The real concern, however, is the fear of losing
one's job. But in today's hire-and-fire environment, not showing
one's responsibility to the company is a stronger reason that may
cost one his job.
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