Harvard Case - Harry Susilo: Moral Leadership and Family Business Succession
"Harry Susilo: Moral Leadership and Family Business Succession" Harvard business case study is written by Jean Lee, Liman Zhao. It deals with the challenges in the field of Organizational Behavior. The case study is 13 page(s) long and it was first published on : Jun 29, 2018
At Fern Fort University, we recommend that Harry Susilo adopt a multi-pronged approach to address the challenges of family business succession and foster a sustainable future for the company. This approach involves implementing a strategic leadership transition plan, fostering a culture of open communication and collaboration, and developing a robust talent management system to ensure long-term growth and stability.
2. Background
This case study focuses on Harry Susilo, the founder and CEO of PT. Susilo, a successful Indonesian manufacturing company. Harry faces the challenge of transitioning leadership to the next generation, specifically his son, Andre. The company faces internal conflicts, generational differences, and a lack of clarity regarding future direction. This situation highlights the complexities of family business succession, where personal relationships, power dynamics, and organizational goals intersect.The main protagonists of the case study are Harry Susilo, the founder and CEO, and Andre Susilo, his son and potential successor. The case also involves other family members, senior managers, and employees who are impacted by the succession process.
3. Analysis of the Case Study
This case study can be analyzed through the lens of several frameworks, including:
- Leadership Styles: Harry's leadership style is characterized by a strong, autocratic approach, which has been successful in building the company but may not be suitable for the future. Andre, on the other hand, embodies a more collaborative and participative leadership style. This difference in leadership styles creates tension and potential conflict.
- Organizational Culture: PT. Susilo has a strong, hierarchical culture built on Harry's vision and leadership. However, this culture may hinder innovation, adaptability, and employee engagement. The succession process presents an opportunity to evolve the culture towards a more inclusive and collaborative environment.
- Family Dynamics: The case highlights the complexities of family dynamics within a business context. Personal relationships, power struggles, and conflicting expectations can significantly impact decision-making and organizational performance.
- Succession Planning: The lack of a formal succession plan has created uncertainty and anxiety among stakeholders. A structured approach to succession planning is crucial to ensure a smooth transition, maintain continuity, and minimize potential disruptions.
4. Recommendations
To address the challenges faced by PT. Susilo, the following recommendations are proposed:
1. Implement a Strategic Leadership Transition Plan:
- Develop a clear succession plan: This plan should outline the roles and responsibilities of Harry, Andre, and other key stakeholders during the transition process. It should define timelines, milestones, and performance metrics for evaluating progress.
- Formalize mentorship and training: Harry should actively mentor Andre, providing him with the necessary skills and experience to assume leadership. This mentorship program should include exposure to various aspects of the business, including operations, finance, and strategic decision-making.
- Create a leadership development program: This program should focus on developing the leadership skills of other potential successors within the family and outside the family. This will ensure a pool of qualified candidates for future leadership positions.
2. Foster a Culture of Open Communication and Collaboration:
- Encourage open dialogue: Harry should create a safe space for open communication and feedback from employees, family members, and stakeholders. This will help address concerns, build trust, and foster a more collaborative environment.
- Implement team-building activities: These activities can help break down silos, improve communication, and foster a sense of shared purpose among employees.
- Promote transparency and accountability: Establish clear communication channels and processes for sharing information, making decisions, and holding individuals accountable for their actions.
3. Develop a Robust Talent Management System:
- Implement a performance management system: This system should provide regular feedback, identify training needs, and recognize high-performing employees.
- Invest in employee development: Provide opportunities for employees to develop their skills and knowledge through training programs, mentorship, and cross-functional assignments.
- Attract and retain talent: Implement a competitive compensation and benefits package, create a positive work environment, and focus on employee engagement to attract and retain top talent.
- Promote diversity and inclusion: Create an inclusive workplace that values diversity of thought, experience, and background. This will foster innovation, creativity, and a more engaged workforce.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations aim to maintain the company's core competencies while adapting to the changing business landscape. They also align with the company's mission of providing high-quality products and services to its customers.
- External customers and internal clients: The recommendations prioritize the needs of both external customers and internal clients, ensuring customer satisfaction and employee engagement.
- Competitors: The recommendations consider the competitive landscape and aim to maintain PT. Susilo's competitive advantage by fostering innovation, efficiency, and adaptability.
- Attractiveness ' quantitative measures if applicable: The recommendations are expected to improve the company's financial performance by enhancing operational efficiency, increasing employee productivity, and attracting and retaining top talent.
6. Conclusion
By implementing these recommendations, PT. Susilo can navigate the complexities of family business succession, foster a sustainable future, and ensure the company's long-term success. This approach emphasizes the importance of strategic planning, open communication, and a robust talent management system in building a strong and resilient organization.
7. Discussion
Other alternatives not selected include:
- Selling the company to an external entity: This option could provide immediate financial benefits but may not align with the family's long-term goals or the company's legacy.
- Hiring an external CEO: This option could provide fresh perspectives and expertise but may create challenges in integrating the new CEO into the family business.
- Continuing with the current leadership structure: This option may lead to stagnation and resistance to change, potentially hindering the company's growth and adaptability.
The recommendations presented in this case study solution are based on the assumption that Harry Susilo and his family are committed to the long-term success of PT. Susilo and are willing to embrace change and adapt to new leadership styles.
8. Next Steps
To implement these recommendations, the following steps should be taken:
- Develop a detailed implementation plan: This plan should outline specific actions, timelines, and responsible individuals for each recommendation.
- Secure buy-in from stakeholders: Engage all stakeholders, including family members, senior managers, and employees, in the implementation process to ensure their support and commitment.
- Monitor progress and adjust as needed: Regularly evaluate the effectiveness of the implemented recommendations and make adjustments as necessary to ensure optimal results.
By taking these steps, PT. Susilo can successfully navigate the challenges of family business succession and create a thriving future for the company.
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Case Description
Sekar Group (Sekar), based in Surabaya, Indonesia, started in 1966 as a small business purchasing fish and shrimp. Led by its founder Harry Susilo, Sekar grew into a large holding company with several business divisions in the global market. Sekar's achievements were closely linked to Susilo's moral leadership, which was greatly influenced by Eastern culture. As the eldest of a large family, Susilo had cared for his siblings as his own children. Some of these siblings were involved with Sekar, and the last of them was preparing to retire. Susilo, as the company's patriarch, was facing the challenge of ensuring lasting success. A new leader from the next generation needed to be chosen to assume Susilo's moral leadership and to sustain family business management and corporate ethics. Who should become the new leader and how would Susilo pass down his ethical framework to a generation largely raised with Western values?
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