Promoting people in periods of turmoil

Selecting a person for a promotion to a decision-making position, as well a decision to hire an outsider after only an hour-long interview, is a risky proposition. The fear to act or choose can be contained when we focus more on the role the selected person is to take up, rather than personal traits. The candidate may not have had a long record of decision-making and may have been risk averse. It is our job to explain what is now expected and the support should be given accordingly.

Appointment to a brief acting-boss position, medium-term project leadership or a permanent one represents a different depth of responsibility. The mix of required subordination, risk taking and vision should be detailed for each of the appointments.

During financial crisis, managers may have been expected to be extremely risk averse. In such times, austerity is the rule. However, a different approach is needed in times when  recovery has been achieved and there is a need to grow.

Unlike the noticeable replacement of senior managers and executives at failed banks and institutions after the fallout of the 1980s savings and loans crisis in the United States, junior managers in Thailand were rarely ordered to replace their failed executives after the 1997 Asian crisis. Managers soldiered on in their old positions. Stress was on survival and risk aversion was the operative mode. There could be nothing wrong with how they had behaved in the past, if they acted appropriately in the present.

Looking back, it could be argued that during the last crisis, managers and leaders were operating under a rather more predictable environment. Today, there are more variables, unknowns and a fuller exposure to global competition.

While the staff and managers, having shown caution and prudence, and weathered the crisis, should be thanked for their past performance, their new role is now quite different. Survival is no longer sufficient. Execution of short-term tactics to achieve a turnaround, delaying of structural, organisation development in favour of short-term fixes are no longer enough to build and sustain today's enterprise.

There is no doubt that the current business climate is volatile. The buying power of long-term clients is rapidly diminishing; the life cycle of technology and products is ever shortening. While it may go against the grain to focus beyond survival, these times call for even more proactive decision-makers. The failure of today's decision-makers to take some risks and to groom a new crop of decision-makers may well lessen the chance of long-term survival.

Dr Don Bhasavanich  is a councilor of the Thailand Management Association.  Follow his article every first Wednesday of the month.