Monday, December 19, 2011

Should the finger be pointing at the CEO? A moleview of the SMRT saga....

image from here
All of sudden there seems to be deluge of bad news for SMRT. The latest involves a woman who fell and and sustained a head injury. Apparently she remains in coma. Gigamole wishes her well.

The public outcry against the SMRT is both understandable and justified. The hounds are now baying for the head of the CEO, Saw Phaik Hwa. The mass media has been particularly unkind, I think, and has dug up as many photos as they have on  file that portray her in the most unflattering light.

However, Gigamole somehow feels this antipathy against the CEO has been somewhat misplaced. Yes, because she heads the SMRT, the responsibility for all the mishaps falls squarely on her lap. Bt we should not forget that as CEO she acts upon the guidance of the SMRT Board. It was also the SMRT Board who examined her credentials and appointed her to the post. It was the SMRT Board who crafted up the directions and strategies for the CEO. By appointing Ms Saw to the post, the Board obviously prioritized the retail agenda above operational and service needs. Whether they did this as a conscious strategic  decision is unclear. It may well have been it seemed like an OK thing to do at that time, and only now shown to be inappropriate.

It seems clear at the moment that the SMRT CEO did all she could within her capabilities. Unfortunately though her experience was principally in retail and marketing. Was she someone who had a good insight into the technical/engineering and operation needs of the SMRT? Should we blame her for  lapses in areas outside her expertise. Yes, as she is CEO; but not entirely, as the Board should account for why they did not think operational/service skills were critically important for a train and transport company. Transport Minister Lui was spot on when he picked up the phone to speak with Chairman SMRT. This is a problem squarely shared by the Board and Management.

So for those who are happily shooting off arrows at Ms Saw, hold your fire a bit, and see if perhaps some of the arrows need to be redirected towards the SMRT Board.


Anonymous said...

I don't think it is misdirected. The trust and confidence of SMRT under the leadership of Ms Saw has now reached rock bottom (beyond repair) if I might say. This has nothing to do with the excellent profits they have shown, but strictly from a public commuters point of view. You cannot run a service provider if you lost the confidence from your customers. However, in this case, because they are the ONLY SOLE PROVIDER, you get a sense that commuters don't have a choice, as SMRT can decide to ignore your calls anyway. Which is what's happening.

By calling for her resignation, the Board has to decide if that's the way to remedy its brand and reputation. So the ball is then on the court of the BOD to make that unpopular decision. If they choose not to , then clearly both the Board & CEO have failed the public. That's what is at stake here.

Anonymous said...

similarly, i think the blame is not misdirected too to the extent that she is the President of the Board and this is her 9th (?) year into this position. Yes, the board could be held much more responsible should this happens in the first 2 years of her service. But after all these years with her both as a CEO and the president of the board???

gigamole said...

I think there is no doubt that as CEO she should be held responsible for the fiasco. The point I was trying to make is that she was put in that position to look after certain strategic interests for the SMRT, interests that were primarily about retailing services, leasing etc rather that maintaining operational readiness or service standards to commuters. She may be CEO and President of SMRT but she still reports to the Board and Chairman of the Board. They were the ones who installed her, set the strategic directions and monitored her performance all these years.

Nine years, did you say? I don't know what are the shelf lives of train processes, procedures and equipment. If you don't invest in looking after these especially with new added pressures on the systems, things will eventually breakdown. She had a good run for nine years. That it all seems to be falling apart now seems like neglect.

The Board must share responsibility with senior management in having maintained the facade of efficiency/profitability while allowing the service to decay to this extent. How the LTA and Board manages this from now on will give us an idea if the appropriate lessons have been learnt.

Should she resign?.... I believe so. Should there be changes at the Board level? Yes.

auntielucia said...

Merry X'mas! Best thing for SMRT is for the Govt to nationalise the MRT travel while freeing the buses and taxis to true competition. That way, commuters will then have a true choice of efficient transportation -- besides walking and car owning. :D!

gigamole said...

AuntieL!! A very blessed Christmas to you too!
I am not sure nationalization is the only way to go. I think there are various alternatives to re-calibrating the balance between fiscal efficiency and social responsibilities. I do believe we have swung too far with respect the former. SMRT is 54% owned by Temasek Holdings. Recalibration will incur some loss of profitability and will untimately reduce share prices, but it will need to be done.

Social responsibilities unfortunately comes with a cost to profitabiity.