Affirmative Action/Can Maria Ramos be considered a visionary leader? term paper 41836

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“A leader is one who sees more than others see,

who sees further that others see,

and who sees before others do”

-- Leroy Eims (Maxwell, 1998, p37)

A leader must have a clear vision of the future in all aspects of their life, as well as strength and courage to face challenges, and persistence to overcome setbacks and failures. Maria Ramos, the chief executive of Transnet stands out as such a leader.

A visionary leader impacts the change process dramatically. With a strong vision and sense of purpose, as well as a clear direction, and the willpower to execute the necessary actions, a visionary leader can facilitate change. He or she serves to inspire and motivate employees, thus moving them to action, and opens their eyes to the potential benefits and future possibilities derived from the change. Visionary leadership directs powerful action and can be vital to a significant change process. There are many different ideas of what visionary leadership should be and how leadership should impact an organization during the organizational change process. There are four distinct models emphasizing different aspects of the role of leadership. According to Warren Bennis, the three basic ingredients of leadership are: a guiding vision, passion and integrity. Although Kotter’s beliefs parallel those of Bennis, Kotter’s focus is on the function of leaders, and the contrast between leaders and managers - aligning and motivating people and giving people direction should be the primary focus of a leader. In contrast to the previous three models, Jean Lipman-Bluman highlights connective leadership. The essence of her philosophy is that leaders assist others in making good connections, and develop a feeling of shared purpose across boundaries, therefore building commitment across a broad area. To examine whether Maria Ramos can be considered a visionary leader, we have to take into account whether she is successful in light of the four models of what visionary leadership entails.

Maria Ramos, through her determination and commitment entered Transnet when it was in a dire financial position and with her strong vision, resurrected the organization, and restored it to a financially stable position. When Ramos entered Transnet, the transport parastatal, approximately two years ago, the organization was excessively fragmented, lumbering, and paralyzed by large debt and inefficiencies. Transnet’s bottom-line losses stood at R6.3 billion and the debt incurred was R63.7 billion in the financial year of 2004. SA Airways, a division of Transnet, in a two year period experienced a R15 billion loss. The results of the changes she implemented, after one year, yielded a 6% increase in turnover to R46 billion, and the loss of R6.3 billion was transformed into a R6.8 billion profit. These facts and figures seem to speak for themselves that Ramos was indeed a visionary leader. However it was her day-to-day decisions that achieved this turnabout – as Jean Lipman-Blumen advocated: leaders must think long-term, and act short-term.

As any visionary leader would do, Ramos had a goal for Transnet - “ to leave behind an organisation that from an organisational point of view is run like a JSE-listed company, although our objectives are broader”. Here already she confirmed one of Bennis’s three basic ingredients of leadership as well as several of the qualities of a visionary leader, which he deems necessary– having a guiding vision, a “long-range perspective”, and having her “eye on the horizon”. Her actions also reinforced Kotter’s idea that the focus of a leader should be in setting direction. She wanted to return financial stability to the business and change its direction so that the main focus was on freight transport. This change ties in with the Kotter belief that “what leaders really do is prepare organizations for change and help them cope as they struggle through it”.

As Kotter suggested, Ramos focused on aligning people with the right position. Although this meant that some people left the organization, she stated that she based her choices on the person’s ability to thrive in that environment, and that did not mean that they could not better thrive in another environment. A leader does the right thing. Sometimes, the right thing means challenging the status quo, as Bennis believed. Even though the departure of senior management was not pleasant, it was the right thing in order for Transnet to achieve the vision Ramos had for it. She ensured that Transnet had the people resources to build team around, so that the organization could be revived. The changes she accomplished required commitment and effort on the part of employees, and if the employees were not motivated enough she would not have been able to cause the turnaround of Transnet.

Bennis characterized leaders as focusing on people and inspiring trust. Here Ramos also came through. She focused on getting the right people for the job and putting together an effective team to salvage the organization. She was able to attract effective people even though Transnet was in such a poor position, demonstrating that people had sufficient faith in her to believe they were not boarding a sinking ship.

The better a leader you are, the better leaders you will attract. A visionary leader attracts powerful people to him or her. He/she needs strong people to help him/her implement his/her vision. Ramos needed to formulate an executive committee who understood the future challenges. The fact that she was able to attract competent and experienced people despite the fact that Transnet is in the public sector and was in such a dire position, indicates that she is a visionary leader. “Despite Transnet’s financial position and the fact that it is in the public sector, Ramos has been “surprised at the number of competent and experienced people we are able to attract”. Not only was she able to attract the shareholder support Transnet sorely lacked in the past, but she was also able to get the Public Enterprises Minister Alec Erwin on board – he says she has “been proactive and has put processes in place to facilitate Transnet’s improvement and enable him to carry out his oversight role”.

Research conducted by Howard Gardner proved that leaders who influenced others’ thoughts, feelings and actions, all seemed to have a burning message – a passionate belief. This central message supplied background and also helped followers to have a strong vision about the future. He noted that people who do not live their message will soon be exposed. Obviously Maria Ramos has a burning message, which she seems to have translated to her newly appointed senior staff since she has managed to gain shareholder support and inspire the staff to work with her. The success of Transnet is evidence enough.

Jean Lipman-Bluman advocates that leaders need to search for meaning, and make connections as Ramos did when she stated that “with all big jobs, be it….there are a set of skills which are common”. She believes that connective leaders identify connections among diverse people, ideas, and institutions, even when those involved do not. “This will be a different challenge for me. I have obviously never run a business like Transnet. But with all big jobs, be it in Transnet or in the financial sector or not, there are a set of skills which are common. All businesses are about sustainability and human capital, and in both areas I feel I will be able to add value”.

Perhaps the toughest challenges that Ramos had to deal with as a leader were the financial challenges, the implementation of a R40 billion capital expenditure programme, and the divestiture of non-core business units (SAA being one of them). The goal of the changes she implemented was to financial stability to Transnet and to change focus of the business to that of freight transport. Even greater than that was the knowledge that she would have to be accountable for all her decisions. As Jean Lipman-Blumen states: “accountability is achieved by being willing to have every choice scrutinized”. Ramos, being a woman, and Transnet being in the position it was to begin with, was probably subjected to much scrutiny.

The changes Ramos made involved financial change, and changes to management and corporate governance. These changes led to the overall turnabout of Transnet into a profitable company.

Visionary leaders need to have a strong vision to direct them, as well as passion, integrity. They use their lives and positions to positively influence others and their actions should reflect their words. Visionary leader are able to achieve the impossible by aligning and motivating people. Maria Ramos proves that she qualifies as a visionary leader since she was able to transform a struggling company into a financially stable and successful organization with a strong vision for the future.

APPENDIX 3:

A woman of substance

Maria Ramos hasn’t flinched in carrying out one of SA’s toughest jobs — saving Transnet

MARCIA KLEIN

‘I can fix things, I can take strategic decisions, but I don’t think I could be quite as effective in an organisation that does not need much done to it’

FIXATION: Transnet chief executive Maria Ramos has been voted Business Leader of the Year Picture: TYRONE ARTHUR

FOR someone who manages a R46-billion company, with a R40-billion capital-expenditure programme and more than 70000 employees, Maria Ramos always appears to be completely unflappable.

Her dispassionate manner, not to be confused with a lack of concern but perhaps showing a touch of aloofness — at least to those who don’t know her well — is clearly a reason why she was appointed to head Transnet and why she has already achieved a measure of success in turning around what was a non-functional transport parastatal.

Her demeanour belies a dogged determination and toughness that does not necessarily make her a popular leader. She has taken some tough decisions, some of which have led, directly or indirectly, to the departure of members of senior management.

Ramos was previously director-general of the Treasury, where she gained a distinguished reputation in local and international financial markets. However, there was concern that her background did not necessarily equip her with the right characteristics for an executive position at Transnet.

She said before her appointment in January last year: “This will be a different challenge for me. I have obviously never run a business like Transnet. But with all big jobs, be it in Transnet or in the financial sector or not, there are a set of skills which are common. All businesses are about sustainability and human capital, and in both areas I feel I will be able to add value.”

She was right. Her mission was and is to fix Transnet, the lumbering transport parastatal which was, some two years ago, paralysed by huge debt and inefficiencies.

Today, there are signs of it stirring, although one should not underestimate the challenges that still lie ahead.

Soon after her appointment, she revealed the extent of the mess she had encountered. Transnet’s bottom-line losses totalled R6.3-billion and its debt was R63.7-billion in financial 2004. SA Airways had lost R15-billion in two years.

After just one year, the financials present a completely different picture. On a 6% rise in turnover to R46-billion, the R6.3-billion loss had reversed to a R6.8-billion profit.

Although no mean feat, this did include a number of financial changes. At operational level, however, the seeds of improvement had also been sown. Financial and operating management was improved, as was corporate governance. A R40-billion capital expenditure programme was put in place as well as a strategy to divest of all non-core business units, including SAA.

The changes would, in time, restore financial stability and redirect the business to focus on freight transport.

The turnaround has to some extent been achieved through cleaning out the balance sheet and unwinding complex financial instruments, but also through the appointment of a team to surround her and to help make operational changes. At the same time, top-level departures have been numerous.

Ramos says that after her appointment it took her a while to understand where the problems lay. The group was not structured to function in the way she needed it to, so she had to make tough decisions, particularly concerning people.

In Transnet, Ramos found an organisation that was too fragmented, with problems that ran deep. She needed to put an executive committee together, one made up of people who understood the challenges ahead.

“All the decisions I have made are based on what the organisation needs. Most of the people [who did not stay on] I did not know, I met them there. I based my decision on whether they could deliver in that environment. This does not mean that they cannot deliver in another environment.

“Organisations at different stages need different resources. The people you bring in to fix are not necessarily the people to maintain. You need the people who can make tough decisions and not be intimidated by uncertainty.”

This pretty much sums up Ramos’s own strengths, but she is not prepared to speculate on her future after her contract expires at the end of next year. She does, however, freely admit that she is a fixer rather than a caretaker. “I don’t think I am good at maintenance. I can fix things, I can take strategic decisions, but I don’t think I could be quite as effective in an organisation that does not need much done to it.”

Ramos is a little too understanding of Transnet’s previous management, saying that “in fairness to previous strategies, in the end you need your board and shareholder and there was not enough shareholder support”.

This she gets in ample amounts from Public Enterprises Minister Alec Erwin, who she says has been proactive and has put processes in place to facilitate Transnet’s improvement and enable him to carry out his oversight role.

“We meet monthly with him and he has made the ministry’s role relevant to what we are doing, and with Portia [Molefe] as director-general we have been getting things done.”

Ramos’s role at the centre of Transnet is to ensure there is a viable financial and operational strategy and then implement it. Unlike companies in the private sector, Transnet has an added complexity in that its shareholder is the government and its role and objectives are broader than those of private sector peers.

The past year has been one largely for accolades, including an Empowerdex ranking of the economic influence of SA’s women, which placed Ramos second only to Deputy President Phumzile Mlambo-Ngcuka.

But there has also been criticism. Sandile Zungu of Umthunzi Telecoms accused Transnet of reneging on a deal to sell its shares in MTN, although Transnet said the terms had yet to be agreed upon. Umthunzi was merely a preferred bidder — there was no deal. And there has also recently been speculation that Transnet was to shed 25000 jobs, which Ramos has dismissed as mischievous.

Ramos said at the end of the financial year that the year had “been about strategy, and the near-term future is about roll-out and implementation”.

This is easier said than done.

As an example, the unbundling of SAA, originally expected to be completed next March, is now only likely by the end of the year due to legislative hitches. Ramos, however, says while there are some areas where Transnet has not been able to move as quickly as expected, “those are risks you need to identify. If you let these things stand in the way of what you plan to do they become your alibi.”

She adds that while it is easy to budget for R40-billion public-sector capital expenditure, it is hard to spend well. Nevertheless, she has set “a high level of deliverables”.

“I want to leave behind an organisation that from an organisational point of view is run like a JSE-listed company, although our objectives are broader.

“We needed to make sure we had the people resources ... The choice of people like [chief financial officer] Chris Wells and [chief operating officer] Louis van Niekerk was on that basis. Now we are in the process of building teams around them.”

Despite Transnet’s financial position and the fact that it is in the public sector, Ramos has been “surprised at the number of competent and experienced people we are able to attract”.

Ramos’s achievements in a year have been numerous and this has been acknowledged by her peers — the CEOs of SA’s Top 100 companies — who have voted her the Business Leader of the Year.

Her longer-term legacy, however, will depend on her ability to see her strategy through to delivery.

http://www.sundaytimes.co.za/articles/article-top100.aspx?ID=ST6A151825

Bibliography

Cameron, E. and Green, M. (2004) MAKING SENSE OF CHANGE MANAGEMENT: A complete guide to the models, tool and techniques of organizational change. London & Sterling: Koogan Page Limited

Maxwell, J.C. (1998) THE 21 IRREFUTABLE LAWS OF LEADERSHIP. Tennessee: Thomas Nelson Inc.

http://scholar.google.com/scholar?hl=en&lr=&q=cache:x3tCNNZuhVUJ:newportal.ncsl.org.uk/media/F7B/97/randd-leaders-business-bennis+

http://scholar.google.com/scholar?hl=en&lr=&q=cache:_lhNyyHso54J:www.uwstout.edu/lib/thesis/2001/2001drenglerk+(warren+Bennis+lessons+of+self-knowledge)

http://www.managementskills.co.uk/articles/ap98-bennis.htm

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