Companies that attempt to cut costs through restructuring and downsizing should beware, for they run the risk of losing employees who promote growth, a top business school teacher warned on Monday.
"A lot of companies offer pre-pension schemes (voluntary retirement) to employees. Sadly, these offers pave the way for letting go many 'growth sponsors'," said Peter Lorange, president of IMD, one of the world's leading business schools.
"This is a dilemma," he said, giving a lecture here on "Leadership for Tomorrow".
Lorange, who has served on the board of many multinational organisations including Citibank, said it was unwise to let go of people with experience for fresh candidates armed with an MBA degree.
"Bright entrepreneurs need not necessarily be young or straight out of college," he said, quoting findings of his own research that covered 3,500 companies across the world.
MBA-holders, Lorange said, were often arrogant and despite managing to get promotions never really established a track record.
Growth sponsors were senior executives who are able to identify business opportunities before they became obvious to everyone else. "They also know where to get funds from and where to invest them."
Companies should also desist from promoting growth sponsors to senior management positions if they want to retain them, Lorange said, pointing out that experience showed that such people preferred to continue in their existing positions.
"Unfair pay policies could also be a reason for such sponsors to leave an organisation," he said, urging companies keen on growing to ensure parity in bonus policies.
Source: ET
"A lot of companies offer pre-pension schemes (voluntary retirement) to employees. Sadly, these offers pave the way for letting go many 'growth sponsors'," said Peter Lorange, president of IMD, one of the world's leading business schools.
"This is a dilemma," he said, giving a lecture here on "Leadership for Tomorrow".
Lorange, who has served on the board of many multinational organisations including Citibank, said it was unwise to let go of people with experience for fresh candidates armed with an MBA degree.
"Bright entrepreneurs need not necessarily be young or straight out of college," he said, quoting findings of his own research that covered 3,500 companies across the world.
MBA-holders, Lorange said, were often arrogant and despite managing to get promotions never really established a track record.
Growth sponsors were senior executives who are able to identify business opportunities before they became obvious to everyone else. "They also know where to get funds from and where to invest them."
Companies should also desist from promoting growth sponsors to senior management positions if they want to retain them, Lorange said, pointing out that experience showed that such people preferred to continue in their existing positions.
"Unfair pay policies could also be a reason for such sponsors to leave an organisation," he said, urging companies keen on growing to ensure parity in bonus policies.
Source: ET
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