Role of Employment History in Developing of Successful Leaders
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The Lincoln Electric Company’s top executives have employment histories spanning 20-50 years at the company. This paper questions the role time spent working at a company plays in developing leadership skills that result in organizational success.
This is an important question since successful leadership is a crucial ingredient of organizational success as it gives the firm competitive advantage. Good leaders are said to be those that provide a positive environment for higher employee productivity. A positive environment that enables employees to internalize roles and expectations provides both intrinsic and extrinsic motivation and encourages self management.
According to Chris and Bennet (2011), research shows that less than 36 percent of outside executives succeed in their new jobs and that “approximately 30 percent of new managers and executives fail at their new jobs and leave within 18 months”. The reasoning behind hiring top executives in current times has been to seek outside executives to inject fresh ideas and to replicate the success they have had at previous firms. Even though outside charismatic leaders usually bring about an increase in stock price in the short term, generally, the success evidenced is not long term.
Usually, firms in trouble will not promote an insider to bring about a turnaround. However, other research has shown that insiders are more knowledgeable about the firm’s internal and external environments and have networks through which they can gain inside support to succeed. Indeed, when deserving employees are promoted within the firm, their colleagues see it as the logical end to an individual’s personal effort; therefore, it boosts morale.
At Lincoln, all the top executives have grown through the ranks, starting at the most basic level and going up the ladder. Moreover, their long stay is a testament to their commitment to the vision of the firm. When such individuals are at the helm, they put aside their personal interests and relentlessly pursue the firm’s goals. Having given 20 or more years to a firm makes an individual a part of the firm, not just an employee. Such a long stay in a firm bears loyalty to the firm. Loyalty leads to commitment and doing what is right for the firm. On this basis, having executives who share the same commitment to the firm’s vision leads to a positive environment where each executive and his/her team can actively achieve the firm’s goals.
As the executives lead their teams to pursue department goals, they work in tandem with the other departments, complimenting each other’s efforts so that the integrated result is better performance for the firm as a whole. Outside executives may not have this loyalty since they are brought in to bring about a change. When their efforts do not yield quick results, they are considered failures. This creates a high pressure environment in which the executive cannot effectively put in measures to guarantee long term success, since he/she is seeking to prove that the firm has made the right choice in hiring him/her. In companies that have seen some level of success from outside hires, this success has not been sustained over time. This is simply because such a ‘star’ executive is too concerned with projecting the celebrity image, rather than planning for succession or putting in place measures and policies that guarantee a positive environment so that success becomes a part of the organizational culture.
Lincoln has managed to stay on top due to the development of its human resources over time.