Business Plan Proposal
Business
Identification of Problem
Poor publicity can affect a wonderful product and can lead to an uphill battle getting back into good standing with your customers, community, employees and stakeholders. Competent leaders are a necessity to rally teammates in tough times, even though acquiring and retention of qualified individuals may pose to be even more of a struggle. Recently, Transurban, the company that designs and operates the Express Lanes on I-495, I-95, and I-395, have taken on some bad publicity with civil lawsuits, deaths on the Express Lanes, back-ups on the lanes that are a result of user accidents and increased lane usage, and the acquisition of questionable assets. Leaders have been under high levels of pressure to perform, and it’s been difficult to retain top leaders and talent in the industry. Current employees within the company feel they are unable to advance throughout the business and are getting antsy witnessing the shifts amongst top leadership. Leadership retention is becoming a huge struggle for this company that expands its non-managerial headcount by 20% every quarter. In addition, the company appears to have a declining employee retention rate as observed in the 2014 showing 89% on make employees and 83% on female employees. However, the 2015 report showed a sharp decline in the retention rate among the female employees at 71% (Transurban, 2015). This decline in the retention rate reflects the implication of a problem caused by lack of the company’s attention on the importance of leadership and professional growth among its employees and top management. I believe poor publicity, lack of change-management training and leadership training, in addiction to inadequate public facing could be contributing to the surmounting issues facing Transurban.
Background
Transurban manages and develops urban toll road networks in Australia and North America (Transurban, 2016). It is a Top 25 company on the Australian Stock Exchange and has been operating since 1996. In Australia, Transurban is the full owner of CityLink in Melbourne, which connects three of the city's major freeways; and has stakes in five tolled motorways in Sydney, and five of the six tolled motorways in Brisbane. These assets, in addition to the three acquired in Northern Virginia, make Transurban a growing contender in high occupancy tolling (HOT) lanes. The growing number of assets largely contributes to the need of additional departmental resources, employees. However, top leadership has turned over four times since the company started twenty years ago. If you take a look at their website and look at their executive committee, only three out of ten leadership members were even employed with the company prior to 2012 (Transurban, 2016). Another important detail that can be noticed in the company’s workforce structure is disparity in ratio between the number of employees versus the number of managers, team leaders and supervisors. As observed in the report posted in the company’s website, there are 60 managers and 82 middle management employees as opposed to only 30 supervisors and team leaders for the rest of the 697 employees or 76.9% of Transurban’s total workforce (Transurban, 2015).
It was mentioned earlier that only three out of the ten executives of the company was hired for their respective position prior to 2012 and there had been a change in the CEO post at least four times in just two decades. Currently, Scott Charlton is leading the company as CEO since April of 2012. He was formerly with Lend Lease as COO for three years, which is a multinational property and infrastructure company based on Australia. Before Charlton, Chris Lynch was the CEO of Transurban for just nearly four years from 2008 to 2012 (Manning and O’Sullivan, 2013). Lynch replaced Kimberly Edwards as CEO in 2008, but the question remains what happened as to why there had been a sudden change in leadership in just four years. This is because the executive pay in Transurban is a major contention among shareholders (O’Sullivan, 2012). The large gap in the salary grade between the executives and the rank and file employees is a subject of contentions where the CEO in particular was perceived as absurdly overpaid while the results of their job is quite insufficient for what its worth. During the time of Lynch as CEO, he changed the company’s financial distribution de-risking Transurban’s balance sheet causing the share price to fall by 20% (Schwab, 2009). Although Lynch had tried to correct the unreasonable expenses created by the former CEO Kimberly Edwards despite the unimpressive results, this caused the shareholders to change leadership, but the same problem had pushed the shareholders to do the same with Lynch.
In order to resurrect and reestablish Transurban’s name within both the community it serves, as well as the tolling industry, Transurban needs to address the problems that lie within its leadership and recruiting team and invest on ways to retain employees. A strategic focus on retention, benefits and compensation, in addition to focusing on team member satisfaction and public relations will help improve morale and development an enticing atmosphere for employees, stakeholders, and customers. According to Ernsberger (2003), more than compensation, encouraging effective leadership can greatly improve employee retention because employees want to get more involved in the decision making process, better communication, more appreciation, more autonomy, sufficient guidance, professional development, flexible work conditions, and team building. However, it is not the case with Transurban because looking at the ratio of management, supervisors, and employees, there is an apparent disparity in the way the roles were distributed across the organization. This means that the company has excessive number of managers, yet few team leaders and supervisors in proportion to the workforce. For this reason that the proposed solution should involve a strategic focus on retention, improving leadership perspectives, building teams, and increasing the value of the employees in the organizational growth. Since compensation is a major subject of contentions among the shareholders in Transurban, it is also important to take notice of how the company can develop pay strategy and close the rational gap between the number of managers and team leaders.
Strongest Points
Extensive leadership training, including how to delegate work, mentor, annual retreats and teambuilding. Extreme focus on hiring enough resources within the company so workloads can be distributed evenly amongst employees. Hiring an external resource to conduct quarterly organization workshops as they:
Focus on systemic conditions rather than personalities
Identify predictable, dysfunctional patterns and how to avoid them
Deal with the root, not the symptom, of the problem
Clearly see the underlying issues standing in the way of success
Gain an appreciation for the difficult issues people deal with at all levels of the organization
Learn strategies for building successful partnerships that make successful organizations
Hire a Public Relations Manager whose sole role and responsibility to get involved within the communities, arrange functions where employees get to engage with the community, and comprise ways to overcome bad press that is currently halting the hiring of top leadership, in addition to affecting employee morale. Because of the constant change in Transurban’s leadership, it caught the attention of the press speculating that there is a problem with the company’s leadership. As a result, the company is often featured in the business section of the local newspapers such as the Sydney Morning Herald. The articles discussing how the CEOs of Transurban are making the wrong decisions, being overpaid with little results to show to its shareholders, and the lavish lifestyle at the expense of the company brings about a myriad of negativity about the company in general. Furthermore, employee reviews about the company stating their reasons for not staying ranges from having a toxic corporate culture, inefficient and disorganized Human Resource department, and the list goes on of the negative reviews (Glassdoor, 2015), which the mainstream press eventually picks up and put such issues into the national limelight (Passmore, 2015). This is when the role of public relations manager becomes critical in minimizing the effect of the bad press, which also makes it more important for Transurban to strengthen its public relations strategies to create a better image of the company within its community.
Best Possible Solution
I believe that organizational workshops will help tie employees together and help develop a higher level of understanding amongst colleagues. Retention of key employees will increase once a better work environment has been established, and greater trust will soon be developed so that leadership is comfortable with delegating work, employees feel they are contributing to the vision of the company, and are also trained in other facets of the company making moving into a different role within the company obtainable. Of course, employees will resist change and training, and leadership will use the excuse that they’re too busy to participate, but this should be a mandatory training exercise that is conducted quarterly. The costs associated with annual training of this nature can run from 15-100K, depending on the size and needs of the company. Organizational Workshops are not too popular amongst the baby-boomers who are the ones filling most CEO and top-leadership roles. Not understanding the value in this sort of training, as well as finding a justification for the costs, are a few reasons why this solution has yet to have been implemented across Transurban.
Furthermore, it was mentioned that Transurban has abnormally large number of managers disproportionate to the number of team leaders and supervisors. This problem contributes to the lack of opportunity to establish teamwork as part of the efficient leadership strategies for the company. Team leadership is highly important in an organizational design because it provides the roadmap to spreading corporate culture, values, and effective leadership traits across the organization (Trent, 2004). Given that Transurban have more than 700 employees with only 30 team leaders/supervisors, the proportion is way below the recommended standards. Ideally, each team leader and supervisor should handle 15-20 subordinates (ERC Insights, 2014). In the case of Transurban, each team leader is handling a minimum of 24 subordinates per team unit. Meanwhile, the proportion between manager and employees is one manager for every 5 employees. This disparity in the workforce structure has a chain of effect towards organizational efficiency and cost. As a solution, Transurban should consider restructuring its organizational setting by creating more team leaders with considerable and proportionate number of subordinates instead of making more managers, which at some point creates an internal power struggle and has a significant impact towards the overhead and operational cost (Hamel, 2011).
Steps in Implementing Solutions
1) More exposure within the surrounding community, job fairs, volunteering (which will not only serve the community, but will also act as team building), neighbourhood grants and sponsorships in community events. This strategy will enable the company to establish a closer relationship with its community in addition to the advantage that it can provide in terms of creating a strong, yet positive public image of the company.
2) Cross training across teams and functions to make employees more valuable and also more willing to stay in a position that holds value, especially given the opportunity/availability for advancement.
3) Focus on hiring and retention bonuses that pull in top-talent and urge them to stay
4) Change-Management Simulation
5) Vision Mapping; Visualization Training; Mind Mapping
6) Leadership Training
7) Evaluate employee satisfaction, compensation & benefits
Risks/Problems
Continuing to allow poor publicity to hinder the hiring and retention of top-talent will eventually destroy the business as a whole. Especially in the case of Transurban, a company that is so young and has grown so much over the last twenty years, it is important to keep a fresh face and recruit employees that will propel the business and inspire change in the fast-paced transportation industry. Without connecting with and supporting your community you will always face opposition and resentment. Without nurturing your teams, managerial or not, you will have to deal with teams that do not collaborate and trust one another. Workloads will become unbearable and team leaders will feel they are wasting their most valuable days on a sinking ship. Considering the proposed solutions and the steps necessary in achieving results, there are risk and problems associated with the proposition.
Resistance to change – Since the subject of leadership enhancement through training will put forth a change on how the employees perceive their new roles and involvement in the business, it is expected that some employees even the managers will contradict the idea for a myriad of reasons. First, some of the managers will think that enabling leadership among entry-level employees will threaten their foothold on their managerial positions. As a result, the possibility of a power struggle will persist in the organization with the emerging leaders challenging the position of the existing managers (Caroll and Nicholson, 2014).
Employee participation and availability – Given the workload and the work schedules, of the challenges that may arise in the implementation of the proposed solution is the lack of participation from the employees and the conflict between schedules. It was mentioned earlier that resistance to change is likely to create an attitude among employees where some may feel hesitant to participate in the workshop activities and the leadership trainings in general. Among the reasons that could be implied to justify hesitation is the availability due to workload or at some point, lack of encouragement from the unit manager (Zwick, 2012). Such attitude can be often observed in older employees, which also most of the time are the most resistant to change.
Insufficiencies in budget requirements – Another possible factor that may hinder the successful implementation of the proposed solution is budget availability. Given the importance of the leadership trainings, the company may set aside the proposition for budgetary reasons. It is apparent that corporations such as Transurban draft annual budgets depending on what is available in the investment capital. However, proposing additional expenditure at the middle of the fiscal year will offset the drafted budget possibly leaving the company with no available funds for a series of activities such as the leadership training.
Areas Requiring Research and Support
Transurban is relatively a young company with more rooms for improvement in its leadership capabilities. Understanding the company’s position on the matters of employee retention and leadership improvement requires further research and evidence to fully integrate the concept of leadership training towards organizational growth. One of the areas that require research is the company’s organizational culture and how such culture contributes to the problem. Managing change in Transurban should begin by defining the prevailing culture within the organization. This is because organizational culture and leadership behavior is correlated in terms of measuring job satisfaction. In return, establishing high level of satisfaction encompasses higher employee retention (Tsai, 2011). This correlation should be further explored in the case of Transurban and determine how the company’s organizational culture can be re-fashioned to align with the objectives of leadership improvement. Another area to explore is the processes involve in implementing changes in the organizational structure.
This is because structural change is considered the prerequisite in managing change in an organization. It was mentioned earlier that the company has a disproportionate ratio of subordinates versus team leaders and managers. Therefore, enabling a strong teamwork environment in Transurban will require further research in handling the structural change in the company and its implications towards the stakeholders. Structural change requires that each group meet regularly and allow all stakeholders to contribute in the structuring of the policies and procedures (Mallinger et al., 2009). In addition, it also important to determine through research evidence how the structural change can serve as an initial tool for intervention in shifting the organization’s organizational culture. The aforementioned areas warrant further evidence through research in order to predict a positive outcome.
Conclusion
Transurban is in need of a major revamp in its organizational leadership perspective as observed in its constant change of leadership problematic employee retention performance. Moving forward, the company will require not only a change in perspective, but also a change of leadership culture, which can be enhanced through constant training. However, this objective requires full support from the management in terms of funding, resources, expert assistance, and organizational policy change. On the other hand, given the context of the proposed best solutions, the company can expect positive changes in terms of enhancing its leadership values not only on the executives and managers, but also across all employees. This will enable every member of the organization to be more competitive and satisfied with his or her job. In return, this investment will entail higher productivity, work efficiency, foster teamwork atmosphere, and stronger leadership.
References
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