Cultural Dimensions of Leadership
February 12, 2025
Leaders, Managers, and Crisis Leaders Often, there is some confusion about what managers do and what leaders do. While the former and the latter perform similarly, the essential difference between them is the vision, the charisma, and the ability to persuade and convince their followers to “walk on water” if need be are the key […]
Communication plays an important role in the success and failure of an organization. The art of expressing one’s ideas and thoughts clearly is called as effective communication. Individuals need to communicate effectively at the workplace for better transparency and clarity. Not only effective communication helps in correct transfer of information but also in decision making. […]
What Makes Some Leaders Truly Transformational and Exceptional? There is a difference between leadership and management. Similarly, there is a difference between leadership and outstanding leadership. The point to note here is that leaders and managers differ in a number of crucial ways. For instance, leadership is all about having a vision and then actualizing […]
In the previous article, we have already seen what an indexation clause in reinsurance contracts is. We are now aware of the purpose behind having indexation clauses in reinsurance contracts. We also know the various variations of the indexation clause which are common in the marketplace. However, before taking a final decision on whether or […]
A reinsurance contract is essentially a contract between a ceding insurance company as well as a reinsurance company. Under plain vanilla reinsurance contracts, the premiums, as well as risks, are transferred proportionately from the ceding insurer to the reinsurance company. In some cases, this arrangement is not acceptable to one or both of the parties. […]
One of the thorny issues facing senior management in many organizations is the debate over grooming leaders from within and then appointing them to the top posts versus brining in leaders from outside and then making them the CEO.
The debate is not confined to a particular country and occupies the energies of corporate leaders worldwide. This is because many organizations prefer that they have people at the helm who have come up the ranks as opposed to having outsiders take to the top slot.
The issue is contentious because appointing outsiders to the top slot evokes antipathy from those who have been overlooked and hence can lead to unnecessary tensions and lack of cooperation.
The way out for many boards of corporations is to conduct a search process wherein they consider both the homegrown talent as well as outsiders and decide purely based on merit and nothing else.
However, this is easier said than done since appointing homegrown talent has its advantages. First, these leaders know the organizational intricacies like the back of their hand and hence can be expected to bring familiarity and a sense of purpose to managing the organization given their knowledge of the bureaucracy and contacts.
The point here is that since homegrown talent already knows the ropes of the organizational ladders, they are able to translate this advantage into actionable results.
Further, they also have allegiance to power centers within the organizations and hence, this gives them an edge over outsiders, as they are able to navigate the treacherous waters of the organizational politics. However, this can also turn into a disadvantage as they would be beholden to certain power centers and hence would biased towards them and this leads to exacerbation of existing divisions.
On the other hand, bringing in outsiders makes sense when the organization is in crisis and needs a fresh perspective.
The CEO drawn from the wider corporate world can start afresh without any leftover baggage and can ensure that he or she brings a new set of lens with which the organization can determine its vision.
This is the case that works best when corporates are floundering because of intra organizational rivalries and hence bringing in outsiders would be a good idea to rejuvenate the organization. However, this is also easier said than done since there is a possibility of all factions ganging up on the new CEO and denying him or her chance to rebuild the organization.
The best possible course would be to have leaders groomed before the person at the top retires and hence, ensure that these leaders step into the shoes of the retiring leader. However, as the case of the Infosys leadership transition (we shall discuss this in detail in a subsequent article) proves, grooming leaders from within can also spark a boardroom war.
Ultimately, the solution to this tricky issue needs to be found by recourse to a mixture of firmness and astuteness and there are no easy answers to the question as to whether homegrown leaders make the best choice or outsiders are the preferred alternative.
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