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Harvard Case - SMRT: Internal Crisis Leadership

"SMRT: Internal Crisis Leadership" Harvard business case study is written by Augustine Pang, Lakshmi Appasamy. It deals with the challenges in the field of Organizational Behavior. The case study is 26 page(s) long and it was first published on : Jul 3, 2018

At Fern Fort University, we recommend a multi-pronged approach for SMRT to address the internal crisis, focusing on restoring employee morale, rebuilding trust, and fostering a culture of transparency and accountability. This involves a combination of leadership changes, communication strategies, and organizational development initiatives.

2. Background

This case study focuses on SMRT, a Singaporean public transport company, facing a severe internal crisis following a series of high-profile incidents. These incidents, including train breakdowns and safety concerns, have eroded public trust and led to a decline in employee morale. The case highlights the challenges faced by the CEO, Desmond Kuek, in navigating this crisis and restoring confidence within the organization.

The main protagonists are:

  • Desmond Kuek: The CEO of SMRT, responsible for leading the company through the crisis and restoring public trust.
  • SMRT Employees: The workforce directly impacted by the crisis, experiencing low morale, frustration, and uncertainty about the future.
  • The Public: The stakeholders who rely on SMRT's services and have lost faith in the company's reliability and safety.

3. Analysis of the Case Study

Organizational Culture: The case study highlights a culture of fear and silence within SMRT, hindering open communication and proactive problem-solving. This culture stems from a top-down leadership style, where employees are hesitant to raise concerns due to fear of repercussions.

Leadership Styles: The CEO's leadership style, characterized by a focus on control and a lack of transparency, has contributed to the crisis. This approach has stifled employee engagement and hindered the flow of critical information.

Team Dynamics: The case study reveals dysfunctional team dynamics, with a lack of collaboration and trust between different departments. This siloed approach has hampered effective communication and hindered crisis response efforts.

Communication Patterns: The lack of open and transparent communication from leadership has fueled mistrust and uncertainty among employees. The company's communication strategy has been reactive and ineffective, failing to address employee concerns and build confidence.

Decision-making Processes: The decision-making process within SMRT appears to be centralized and opaque, leading to delays and a lack of accountability. This has hindered the company's ability to respond effectively to challenges and implement necessary changes.

Employee Engagement: The crisis has significantly impacted employee morale and engagement, leading to a decline in productivity and a sense of apathy. This has further hampered the company's ability to recover from the crisis.

Organizational Learning: The case study highlights a lack of organizational learning, with the company failing to learn from past mistakes and implement necessary changes to prevent future incidents. This lack of learning has perpetuated the cycle of crisis and eroded public trust.

Diversity and Inclusion: While not explicitly addressed in the case study, the lack of diversity in leadership positions and a potential lack of inclusion within the organization could contribute to a culture of fear and silence.

4. Recommendations

1. Leadership Change and Transparency:

  • Appoint a new CEO: A new leader with a proven track record of fostering open communication, transparency, and collaborative decision-making is crucial.
  • Establish a transparent communication strategy: Regular, open, and honest communication with employees and the public is essential to rebuild trust. This should include sharing information about challenges, progress made, and future plans.
  • Empower employees: Encourage employees to voice concerns and provide feedback through anonymous channels and regular employee surveys.

2. Organizational Culture Transformation:

  • Foster a culture of safety and accountability: Implement a strong safety culture that prioritizes employee well-being and encourages reporting of safety concerns without fear of reprisal.
  • Promote collaboration and cross-functional teams: Encourage open communication and collaboration between departments to improve information sharing and problem-solving.
  • Invest in employee development: Provide training and development opportunities to enhance employee skills and knowledge, fostering a culture of continuous learning.

3. Focus on Innovation and Technology:

  • Invest in cutting-edge technology: Implement advanced technology solutions to improve train reliability and safety, such as predictive maintenance and real-time monitoring systems.
  • Embrace data analytics: Utilize data analytics to identify potential issues, optimize operations, and improve decision-making.

4. Rebuilding Public Trust:

  • Develop a comprehensive communication strategy: Engage with the public through various channels, including social media, press conferences, and community outreach programs.
  • Highlight positive initiatives: Showcase the company's efforts to improve safety, reliability, and customer service.
  • Acknowledge past mistakes and commit to change: Be transparent about past incidents and demonstrate a genuine commitment to learning from them and implementing corrective actions.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core competencies and consistency with mission: The recommendations focus on restoring SMRT's core competency of providing safe and reliable public transport, aligning with its mission of serving the community.
  • External customers and internal clients: The recommendations address the needs of both external customers (the public) and internal clients (employees), aiming to rebuild trust and improve employee morale.
  • Competitors: The recommendations aim to position SMRT as a leader in the public transport sector by embracing innovation and technology, exceeding customer expectations, and fostering a culture of excellence.
  • Attractiveness ' quantitative measures: While quantifying the impact of these recommendations is challenging, the expected outcomes include improved employee morale, increased productivity, enhanced safety, and restored public trust, ultimately leading to improved financial performance.

6. Conclusion

By implementing these recommendations, SMRT can address the internal crisis, rebuild trust with employees and the public, and position itself for future growth. This requires a fundamental shift in leadership style, organizational culture, and communication strategies.

7. Discussion

Alternative Options:

  • Ignoring the crisis: This would only exacerbate the situation, further eroding public trust and leading to a potential decline in ridership.
  • Focusing solely on external communication: While important, this approach would neglect the internal crisis and fail to address the root causes of the issues.

Risks and Key Assumptions:

  • Resistance to change: Some employees and stakeholders may resist change, requiring effective communication and change management strategies to overcome resistance.
  • Financial constraints: Implementing these recommendations may require significant financial investment, necessitating careful resource allocation and prioritization.
  • Timeframe: Achieving significant change takes time, requiring a long-term commitment and sustained effort.

8. Next Steps

Timeline with Key Milestones:

  • Month 1: Appoint a new CEO and establish a task force to develop a comprehensive plan for change.
  • Month 3: Implement a new communication strategy, including regular employee town hall meetings and public forums.
  • Month 6: Launch employee engagement initiatives, including training programs and feedback mechanisms.
  • Year 1: Implement key organizational development initiatives, including safety training, team-building exercises, and leadership development programs.
  • Year 2: Focus on long-term sustainability, including investment in technology and innovation, and continuous improvement initiatives.

By taking decisive action and implementing these recommendations, SMRT can emerge from this crisis stronger and more resilient, restoring its reputation and regaining public trust.

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Case Description

Asyraf and Nasrul, two young trainees of SMRT Corporation Limited (SMRT), a multi-modal public transport operator in Singapore, were killed on the tracks near the Pasir Ris MRT station on 22 March 2016. They were part of a 15-member team led by an assistant engineer. The team had walked in single file on the maintenance walkway beside the track towards the device that had registered a warning for a signalling fault. At 11:08 am, a train entering the Pasir Ris station from the opposite direction of the work party hit the two trainees who were second and third in the line behind the assistant engineer. Despite applying the breaks, the train captain could not stop the train in time. Meanwhile, the assistant engineer and the rest of the team had jumped to safety upon noticing the oncoming train. No other injuries were reported. The accident impacted organisational morale and reputation, which was already affected by the falling rail reliability and increasing public criticism. Preliminary investigations revealed non-compliance with safety protocol as the cause of the accident, and this exacerbated the situation. The crisis management team sprang into action to mitigate the impact and support the Next of Kin (NoK) of the deceased. In the days following the accident, Desmond Kuek (DK), the President and Group CEO of SMRT, worked to restore confidence and clarity among the employees, besides comforting and supporting the NoK. While DK's energy was focused on promoting a culture of compliance with safety protocol and driving organisational change, his decision to terminate the assistant engineer and the train captain for breach of safety protocols was met with criticism from some factions of the public and employees.

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