Dead Body Stinks From The Head

A key reason for companies' downhill slide is undoubtedly the quality of CEO. Most turnaround situations arise because of the CEO's incompetence, ineptness, carelessness, ego and /or inexperience. It is simply too much to ask or expect the incumbent management to be objective in evaluating its past performance when the CEO is probably the same person whose mismanagement caused the company's financial health to deteriorate in the first place. The problem is that some CEOs may lack training even though they may think they know it all.

Sir John Harvey Jones said that the reason many companies always find themselves in trouble is almost always due to the problems right at the top. Sir John Harvey-Jones is one of Britain's best-known and most respected business leaders. Besides being the Chairman of ICI he won the fame as the star of the BBC TV series 'Troubleshooter'. Harvard's Professor Rosabeth Moss Kanter, whose work focuses on leadership of turnarounds pointed out in the Economic and Social Research Council lecture in London: "Formal structures and process undergird confidence, but what also matters is the willingness of leaders to believe in people and give them opportunities to share. Behind every winning streak are leaders who care about the team. That is why new leaders are often required to lead turnarounds."

Michael Dell of Dell Computers said, "When a business goes wrong, look only to the people who are running it."

Sun Tzu acknowledged the critical role played by generals or CEOs when he said: "When the general is weak and without authority, when his orders are not clear and distinct, when there are no fixed duties assigned to officers and men and the ranks are formed in a slovenly haphazard manner, the result is utter disorganisation.

Many early ventures into China fared miserably as these companies sent the wrong managers to run the operations there. By merely having a local staff or secretary to handle the Chinese relations is insufficient. Companies should send managers with excellent managerial skills as well as those with excellent understanding of China market. Volkswagen and Siemens hired some excellent CEOs who were able to transform their loss-making joint ventures into successful ones. General Motors sent one of its best people to China in the mid-1990s and is now very successful, even being linked to the Shanghai Automotive Industry Corporation. Toyota is sending its expatriates for sixmonth or longer on language courses to prepare them for the China assignments. The crux is to have the best key man in place.

People often confuse the differences between leaders with managers and use those terms interchangeably. Managers do things right, while leaders do the right thing. Managers tend to focus on short-term goals and objectives and administer them. On the other hand, leaders also consider such issues as well as other long-term issues to inspire and innovate their staff. Managers act and think incrementally whilst leaders think and act radically. A leader is someone that will attract other people to follow them voluntarily whereas a manager demands to be obeyed. Whilst the manager uses official and formal communication and procedure, the leader uses passion and stirs up the emotion of the people.

Leadership matters. John Maxwell, an author on several books on leadership said: "Everything rises and falls on leadership." And it matters more in times of uncertainty than in times of stability. Leadership is not a fad. It is here today and forever.

Leadership is an observable set of skills and abilities. Leadership takes precedence because it is the top management who decides what need to be done and the ones who make things happen. It is true that one person alone cannot change the world, or even a moderate-sized organisation. It takes the concentrated energy, ideas and enthusiasm of many people. But without a leader, the movement does not get started in the first place, or it quickly fizzles off for lack of direction or momentum. Without leaders, good results are a matter of random chance and therefore unsustainable. Change requires leadership and will not happen by default. Leadership is the backbone around which all the rest of the corporate body takes shape.

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