The birth of organized and formal trade goes back to the antiquity of Roman civilization when the monetary control remained mostly in the hand of Kings. Trade, lending, and connectivity were later improved with the help of innovation; as the private sector businesses harnessed the historical model to generate profit over centuries. The genome of business success previously brought by the icons is still helping the model survive even in today’s money-centric, consumerism driven world.
After the civil war in the USA, a new business baron was created by the private sector, which changed the business management notion entirely. A dynamic business character was introduced into the business model called the Chief Executive Officer (CEO), whose role was to ensure profitability for business alongside its sustainable growth. Despite the CEOs coming from different backgrounds, they all must correlate to a specific goal. Irrespective of ages, it is the management characteristic that they must possess to combine the internal and external forces in a critical and uncertain competitive environment.
Interestingly, a CEO must be able to balance and influence the complicated organizational relationship alongside the conflicting interest of the stakeholders. The irony is that until today most CEOs perform well during favorable business conditions, but very few can do well during stressful times. This complex theory gave birth to the concept of changemaker those who are innovative in the very meaning of it and bring changes in the organization often known as change management, another buzzword for success.
Several factors like low living costs and high payment for expats enable Bangladesh to be a lucrative spot for foreigners. As of today, there are at least 300,000 high-paid foreign residents, working in Bangladesh ranging from technicians to CEOs who transfer around $10 billion as outbound remittances every year. The amount can also vary when it comes to the inclusion of unofficial channels of moving money as well.
Currently, almost 18,000 Sri Lankan families are living in Bangladesh, some of them being in service for more than decades now. Furthermore, East Asians are also drawing an excellent salary and engaging in a healthy business in Bangladesh for quite some time. All this has allowed the country to secure second ranking amongst other destinations in the homebound Indian remittances category.
More factors contribute to this scenario; another 500,000 unemployed graduates are added to the list of job seekers every year, whereas the availability of jobs is limited. Contrary to that foreigners occupy the high-end jobs in regulated areas except financial institutions and defense sectors.
Against this backdrop, when asked, an entrepreneur expanded that this sort of practice exists due to the better understanding of professionalism and productivity instilled in foreigners. The lack of seriousness and punctuality is the missing link when it comes to working with an entirely Bangladeshi workforce. Thus, the entrepreneurs are compelled to go through many processes of outsourcing like an advertisement in foreign media or seeking the help of many recruiters working in Bangladesh to meet the demand-supply gap of our industry and hire foreigners.
It is disappointing that no major initiatives have been taken so far to minimize the industry-academia gaps, whereas we never fail to express about the unemployment rate. Bangladesh has a history of excellence in the corporate leadership starting from as early as in the 60s.
The nation has a competent economy with 90% of entrepreneurs who accounted for the success of RMG were first timers in business. We are leaping forward to the second generation of business leaders who are expected to bring real change in the business environment by restructuring the business procedures in the coming years. However, issues such as skills sets, mindset and lack of encouraging environment remain persistent.
Recently, Glen Raiger, President & CEO, Sovern Group, LLC, in an article called ‘Critical Success Factor’ talked about his research on, ‘Most respected CEO,’ his findings challenged many common misconceptions about CEOs. Among the most successful CEOs around the globe, Carlos Gershon of Nissan Motors, David Blair of Catalyst Health, Eric Schmidt of Google Inc., and Muhammad Yunus of GrameenBank Bangladesh are a few prominent ones. The success of Yunus taught us that the most significant challenge of being a CEO is to change the way stakeholders think.
According to a survey conducted in by Korn Ferry, 87% of executives dramatically raise the odds that they will become high performing chief executives. The research said that the qualities of CEOs lie in taking a decision with speed and conviction, engaging in impactful activities, adapting proactively, and delivering reliably. To demystify the myths related to CEOs we can refer to a ten-year-long study of the Harvard University titled, “CEO Genome Projects.” The university collaborated up with other renowned universities and business schools to create a database of 17,000 C-suite executives. The findings revealed that 7% of the high performing CEO’s had an undergraduate Ivy League education and 8% of them didn’t even graduate from any college at all. Contrary to popular views, some of them have a law, technical, physics or HR education.
It is almost time now that we harness the power of young forces within the industry to train them to become C-suite competent, and cater to the existing demand to bring about a significant change.
Planning Makes Perfect: THE FIVE STEPS TO SUCCESS
Adhering to the five significant steps that apply to all major businesses, they can create a considerable succession plan, accommodate for the financial independence of the retiring entrepreneurs, and position the business towards sustainable success and growth.
1. ESTABLISH GOALS AND OBJECTIVES
Go through the current succession plan and the reasons for achieving desired objectives.
Collectively build visions, and objectives for the business and recognize the significance of continued family involvement in leading the company forward. However, also consider including professional management.
Set individual retirement goals and cash flow requirements for retiring family owners.
Define personal and business goals of next-generation management.
Hire and retain a group of professional advisors.
2. DECISIONS DECISIONS: PROCESS MAKES PERFECT
Introduce governance processes for the involvement of family members in the decision-making process.
Establish a dialogue for dispute resolution if required.
Make a document of the entire succession planning.
Communicate about the succession plan to individual stakeholders.
3. PLAN FOR SUCCESS
Identify potential successors from within managers and owners of the business.
Identify active and non-active roles for different family members.
Figure out the required additional support needed by the successor from family members.
4. CREATE A BUSINESS AND OWNER ESTATE PLAN
Implement tax implications on the owner/business upon sale or transfer of ownership at the time of death, or divorce.
Revise the owner estate planning to minimize taxes and prevent delays in transferring stock to the remaining owners or spouse.
Make a buy/sell agreement that is fair, and reflects the value of the business, and reduce taxes.
5. KNOW THE NEXT STEP: THE NEED FOR A TRANSITION PLAN
Consider options such as outright purchase, gift or a combination of these into account.
Be mindful all the financing options including the one from an external party or the self-financing option from the retiring owners on a deferred payout basis when purchasing a business.
Produce a timeline for implementing the succession plan.
THE FOUR ESSENTIAL BEHAVIORS OF A CEO
1. NO DECISION IS THE WORST DECISION
As legends about CEOs suggest, a leader always steers the business towards rapid success. However, a majority of high performing CEOs are mostly decisive and do not end up making the right decisions every time. They are preemptive and quicker in making decisions and they, do it consistently.
Studies show that executives with the highest IQ are often found to be indecisive and take longer time in making decisions, which affects the performance of the team as a whole. Thus, colleagues mostly prefer having a CEO with adequate knowledge and quicker decision-making abilities rather than someone gifted with intellectual complexity.
High performing CEOs understand that taking a wrong decision is better than taking no choices at all. They often end up asking themselves two questions; “What is the impact of a wrong decision being taken?” and “How much will this hold other things up if the CEO doesn’t move on with this?” This approach also encourages the team members to trust their capabilities while taking operational decisions.
2.ENGAGING FOR IMPACT
Efficient CEOs always look for creating a balance between the interests of their stakeholders and delivering results of the business. CEOs who excel at bringing others along decide and execute disciplined ways of communications and influencing strategies. It is also essential for a CEO to engage with their employees playfully at work, as a stray word or frowning gesture can cause unintended damage to the performance of a team. As Kaufman would quote, “Every comment and facial expression you make will be read and magnified ten times by the organization.”
Research shows that CEOs who excel at adapting to different types of business environment are 6.7 times more likely to achieve success. One of the distinctive qualities that allow successful CEOs from others is their ability to handle situations, not explained in the rulebook. Adaptable CEOs spend as much as 50% in long-term planning. They go through extensive networks and various existing data, to find relevant information that correlates with the operations of the business. As a result, during most times they sense the change and make strategic moves to take advantage of it.
4.THERE IS NO ROOM FOR DOUBT
The ability of CEOs to produce reliable results is possibly the most impactful of the four essential CEO behaviors. CEOs with such qualities introduced business management systems that included a tempo of meetings, clear accountability, dashboards of metrics, and multiple channels for monitoring performance and working on rapid course corrections. This methodology gives a new dimension and direction to the business by keeping the employees motivated.