By Larry Cambron
As companies everywhere face new business challenges, a nearly universal response has been to install new management talent at the top. Whatever the business or organisational benefits of these changes, they have also served to dramatically reduce the tenure of office of CEOs and affected job security. Nearly eight out of ten major companies worldwide changed their top leader at least once during the 1990s. In the past five years, close to two-thirds of all major companies replaced their CEOs.
This trend of CEO turnover is significantly impacting executive careers and how organisations are managed. The long-tenured CEO is becoming increasingly rare, and fewer can expect to hold on to their jobs until retirement. In addition, as CEO tenure is reduced, business leaders are effectively forced to implement their plans within more limited time frames, reinforcing the current corporate focus on achieving short-term business results.
The primary driver of the increased turnover among CEOs has been continuing corporate restructuring. Today's CEOs are more likely to lose their jobs as a result of a merger or acquisition than for any other reason. In fact, CEO departures that are caused by such consolidations are nearly ten times more common than departures due to resignation.
Many CEOs who lead the acquiring companies are appointed as chairman or CEO of the newly formed organisation. The CEO whose firm is taken over may be asked to stay on, but it is more often than not in a reduced capacity _ as president, for instance. Of course, those that leave usually negotiate favourable conditions for their departure, such as severance packages, full vesting of stock options and career-transition assistance.
As this trend continues, we are seeing more instances where corporate leaders protect themselves by the so-called "golden parachute." When hired as CEOs they negotiate special contracts that provide substantial financial compensation and career-transition assistance should they lose their jobs as a result of takeovers.
In addition to the takeover threats, there are a number of warning signs that can indicate that a CEO may be on the way out. Here are a few such signs:
ù An industry shake-up that leads to major organisational shifts.
ù Poor communication/disclosure of information
ù Stock or financial performance that lags behind the industry.
ù Lack of speed in embracing change.
ù Negative fallout caused by an acquisition or merger.
ù Inability to create and implement vision and the strategic objectives of the board.
ù A feeling of being less efficient or burnt out.
ù Failure to implement a competitive business strategy.
ù Strained relations or poor communication with board members.
ù No Internet strategy.
If you're trying to become a CEO, take note: There are no short cuts to the top. Those who climb the highest on the corporate ladder are the ones who focus on contributing to the business and establishing a good track record. Generally, companies follow similar and predictable patterns when managing leadership changes.
In the vast majority of cases, successor CEOs are widely considered the "logical choice". They are usually insiders who have been with the company for many years and have held high-level positions. In fact, half of all newly appointed CEOs have been with their companies for at least ten years, and more than a third have served for 20 years or longer.
Achieving success as a CEO today has become more difficult. Corporate leaders face new business challenges, such as increased competition, shifting consumer tastes and higher stockholder expectations. They also must cope with the new realities of CEO careers including the increased prospect of job loss and reduced tenure. The result: CEOs are expected to accomplish more, but have less time to do it.
(The author is president of Asia Pacific for Drake Beam Morin, a leading provider of human resource services. This article is based on Drake Beam Morin's ten-year study of CEO turnover in 476 of the world's largest corporations, covering 25 countries.)
Business Unusual
By Sonali Siriwardene
"There are two ways we can get the attention of the world," said my interviewee, "through our music and by our cartoons." I paused. Yes, maybe we could make a contribution through our music - but cartoons?
It all started in 1997 when two friends, one a photographer with 18 years in the profession and the other a journalist cum film producer, decided to venture into uncharted ground. Firm believers in the power and force of animation, they set out to form a company dedicated to animation. "The concept of a cartoon industry was unheard of in this country at the time" said Chandana Silva, "in fact it is still regarded as of secondary or little importance in terms of the contribution it can make."
The first obstacle in their attempt to change this attitude was the lack of technology. To overcome this they travelled to India, where they participated in technical demonstrations before finally selecting a software called Animo. Equipped with the necessary visual software and bolstered by the experience each had gained in their respective fields, the partners began Cartoon House (Pvt) Ltd. "We undertake anything involving animation. Be it awareness campaigns or cartoons for pure entertainment purposes. Of course, special emphasis is placed on advertisements because animation is a medium that transcends the barriers of a conventional live cut," said Silva.
This prompts the obvious question as to why cartoons have so much potential. "It simply appeals to all ages," came the reply. Silva explains that although cartoons are usually branded as catering only to children, this is in fact far from the truth. "We are made to believe that cartoons are meant only for children. So although we enjoy watching cartoons even as adults, we feel shy to actually admit it."
"This is a misplaced notion because in other countries cartoons have long since broken through these inhibitions," chipped in Palitha Lakshman, the one-time photographer. "Cartoon is a medium which has universal appeal and it is unfortunate that we can't fully appreciate this in Sri Lanka."
"And what's more cartoons are an ideal way to capture the interest of the customer because of the variety it offers. With live cuts we are compelled to seeing the same faces repeatedly and this in turn fails to captivate the audience. But with animation creativity is your only limitation," explained Lakshman.
Presently in their fifth year of operations, Cartoon House based in Nawala, remains a small unit of ten dedicated animators. "Our staff is mostly young people who have studied this medium either at university or elsewhere. There is also the exceptional situation where we have taken in someone who is naturally talented in this field," said Silva. "We coordinate our work with the respective advertising agencies and NGOs and prepare our creations according to the requirement of our clients. If for example we are approached with a story line for an anti-rabies campaign, we then work along those lines and create the required visuals. But we also provide the script - in all three languages when necessary. Of course, there are times when we ourselves generate the initial idea and then go out and sell it to clients" he said.
The visuals created by Cartoon House have been used in the print media and even on billboards. "For example the Caltex lubricants hoarding with a bright yellow banana skin was one of our creations," said Silva.
The first ever cartoon series in Sri Lanka to be locally created was one of their creations. Named 'Ahasin Vetunu Kumaraya,' the series was aired in 2001. The company is now presently working on the sequel to this story. "The response to our cartoons is overwhelming," beamed Silva.
Past projects undertaken by the company include several awareness campaigns such as that on the proper usage of agro chemicals, prevention of dengue and anti-rabies. "We also did a series on child rights with Sarvodaya and Unilever in 2000," said Silva.
"We are still a small company with around 13 shareholders. We want to expand and although we don't have competitors as such, still the lack of appreciation for this art form makes it difficult for us to breakthrough," said Lakshman, whose company is looking for a foreign partner.
He said animation giants like Disney often engage small animation companies in India and the Philippines to do the rudimentary sketching for them. "These multi-billion companies give out sub-contracts to labour intensive countries and as a result the cartoon industry in India is doing very well. We in Sri Lanka have all the skills necessary to compete in this field but unfortunately there is no national interest to facilitate this advancement," lamented Lakshman.
"Look at the garment industry in this country. It is so successful today because it has got the backing of all sectors, most importantly the government. We too need this support if we are to make our mark in the animation world."
Cartoon animation is a recognised art form in many parts of the world. In the USA, the national budget allocates a separate percentage for this sector. In Asia, Japan is a clear market leader with a dynamic and distinct cartoon industry. "They do not ape the West in their visuals but rather their cartoons are heavily influenced by their culture and environment. So the final creation has a distinct flavour. We have to learn to cultivate this attitude in Sri Lanka," he said.
"And if we look at the quality of foreign cartoons shown on TV these days we see that violence takes prime focus. It almost seems that we are trying to promote warfare among our children," Lakshman said, "cartoons based on stories of our ancient kings and folklore can easily be created but the support of the state is vital to facilitate this transition." "The state's involvement in changing the attitude is essential for the development of the cartoon industry in this country. Rhetoric is not enough - we need action. Why should we forego the chance to hold our own in a field where we have so much talent?" he asked.
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