THE past few months have seen arguably the biggest exodus and purge of leaders at top companies and state-owned enterprises in South Africa.

Some are justifiably walking the plank due to terrible performance in one way or another, while others became the fall guys for unhappy shareholders. Some are leaving voluntarily after recognising that the ship they are captaining is unsteerable. Beyond the clear crisis playing out in boardrooms, this development also underscores the need for senior leaders being offered plum positions to first do their own due diligence on a company and role, as failure to do so can lead to unforeseen and sometimes undeserved reputational harm, an expert has warned.

Debbie Goodman-Bhyat, a leadership strategist and founder of Jack Hammer, said: “Over the past year or two, we have seen a greater-than-usual number of CEO exits, with some top leaders voluntarily stepping down from public and private organisations because their inability to reconcile their mission with the on-the-ground realities of a position became clear.” She said although circumstances differed, there was one clear lesson that emerged. It is the need for senior executives to do more due diligence of their own before joining new organisations.

“The environment has changed dramatically, and even the most enthusiastic and able of leaders have had to contend with insurmountable externalities that may impact (on) their ability to be successful in their roles,” said Goodman-Bhyat.
“Consider when many of the recently departed CEOs joined their new organisations. Each one of them were celebrated and hailed as champions at the time of their appointment. So confident and optimistic was SAA’s Vuyani Jarana when he embarked on the embattled national carrier’s turnaround strategy that he famously made a bet to donate R100 000 to charity should he not succeed with his three-year plan. “Yet here we are.

Not even two years later, Jarana is leaving the building, reportedly because of a lack of support, slow decision-making and blurred lines of accountability.” Goodman-Bhyat said senior leaders should scrutinise and evaluate the teams they will be joining and do a pre-emptive assessment of their likelihood of success before accepting an offer, no matter how sweet.

“Keep in mind that there are three key stakeholders at the helm of leading any sizeable organisation: the board, tasked with governance, oversight and key decisions such as the appointment of the CEO and other board members; the shareholders, who hold the board accountable for its decisions; and the CEO. Healthy tension and relative independence among these three parties are critical for ensuring the sustainable growth of an organisation.

“But senior leaders, and in particular CEOs, must remember that while the CEO is accountable to the board and the board is accountable to shareholders, things quickly fall apart when the fortunes of a company are in the doldrums and the sword of accountability may fall, sometimes unfairly, only on the big boss and perhaps a lieutenant or two,” she said.

What CEOs and senior leaders of large companies should realise when considering a new position is that this kind of shareholder and board pressure is a pretty standard response to poor performance. “You may be good enough and on top of your career with a track record of stellar proportions like many of the recently departed chiefs, but in today’s environment it can be fatal to assume that you can walk into a new organisation and simply replicate that success. You need to be clear about the variables that may hamstring you in future, understand what you are walking into and who will be there when you arrive,” said Goodman-Bhyat.

Senior leaders must accept the accountability and scrutiny that come with their roles, as well as reconcile the fact that when the chips fall, it is their reputations on the line, regardless of the circumstances. It is no use crying foul if you haven’t checked whether the cap is loose. “In the current executive recruitment landscape, it is taken for granted that employers will conduct a fully comprehensive due diligence on prospective employees – with rigorous screening, interviews, checking of references and psychometric assessments being par for the course. Prospective appointees rarely do the same, and beyond taking a peek at the balance sheet, there is limited reciprocal screening of the new employer. This should change in order that leaders walk into new roles with their eyes wide open.”

Leading top companies and parastatals has become an almost Sisyphean endeavour, she said. “This means that getting down to business is a huge challenge, and as we have seen with many of these companies, close to impossible, as leaders need to juggle and balance constraints related to a tanking economy, an indecipherable policy environment and endless red tape, which neither adds value nor stems corruption. So, for those fearless leaders who have shown that they can, and who are up for new challenges, we want to say go for it, but proceed with clarity on what awaits, and with extreme caution,” Goodman-Bhyat said.

Supplied by Meropa Communications

Pin It on Pinterest