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 company's operations. These may result in untimely decisions and diminish the company's 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 company's 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 Compaq's 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.

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