Why smart CEOs rotate their best managers

Citing industry practice, our CEO wishes to set up a system where purchasing and supply chain managers are regularly assigned to other jobs. This is to ensure organizational integrity. How do I deal with the situation given the fact that such managers have been consistently delivering their best performance over the past 15 years? — Blue Falcon.

Excellent performance is not an assurance against compliance risks. The issue is not competence but prolonged familiarity with suppliers and service providers. While the CEO’s concern is valid, limiting rotation only to procurement and related tasks sends the wrong signal and may be perceived as distrust of the incumbent job holders.

Therefore, a better option would be to have a company-wide rotation program for all managers and workers.

If people stay in the same position for years without being challenged to improve their value, they risk staying in their comfort zone. That’s where a dynamic rotation program becomes a powerful strategy where everyone invests in their learning and flexibility towards resilience.

Another advantage is developing a full understanding of all jobs across the organization. For example, a production supervisor assigned temporarily to quality assurance gains a better understanding of inspection standards.

An engineer working briefly in procurement learns the realities of supplier negotiations. A finance analyst spending time in operations discovers how business decisions affect costs on the factory floor. These experiences create well-rounded professionals instead of narrow-minded specialists.

Another important advantage is improved knowledge sharing. Organizations often struggle because critical knowledge resides with few individuals. When those people suddenly resign or become incapacitated, the whole organization suffers.

Employee rotation spreads institutional knowledge across the organization. More people understand important processes, reducing dependency on any single individual. Think of it as diversifying investments. That means, wise investors never put all their money into one stock.

WORKERS OR MANAGERS?
While you’re asking about rotating purchasing and supply chain managers, the best question to ask is whether to include their workers as well. The short answer is both managers and their workers must be rotated for different reasons.

In other words, they should not be transferred at the same time leaving their departments with institutional memory loss. Otherwise, you’ll defeat the point of having a rotation program.

Here is how to look at who qualifies and why, broken down by organizational role.

For non-management employees, the rotation is generally intended for cross-training of high performers ready to perform future challenging roles. It is also intended for those who have already mastered their craft. They must be given new challenges to avoid boredom and promote their career advancement.

Likewise, in an environment with a need for heavy physical strain or cognitive loads, workers must be rotated to distribute workloads to prevent burnout or repetitive injury. More importantly, the rotation must build a flexible and resilient workforce where the workers can readily jump in place of another.

For those holding management functions, the rotation is required to ensure succession planning and business continuity. They are high-potential managers earmarked for top executive posts to give them a holistic understanding of the business.

For example, brilliant technical managers with blinders on the function of other departments can be assigned to strategic areas, like an engineering manager moving to quality assurance or vice-versa. The objective is to build well-rounded leaders who understand the upstream and downstream of operations.

Both managers and workers could be transferred to different assignments or related processes for short terms (six months to one year) or mid-to-long terms (one to three years) depending on the complexity of the job.

CAUTION
Don’t use rotation as a punishment or a way to pass off people to another department. Whether it’s a manager or a worker, qualification should always be tied to a clear strategic objective — to build operational resilience and develop future multi-skilled talent.

This approach reflects good governance through strong internal controls that protect the organization and its people. Also, providing new assignments allows managers and their workers fresh challenges, better learning opportunities, and a greater sense of career progression.

In conclusion, employee rotation is a strategic investment in organizational resilience. It builds versatile employees, develops future leaders, spreads knowledge, stimulates innovation, strengthens internal controls, and prepares companies to respond to unexpected challenges.

As the saying goes, stagnant water breeds mosquitoes, while flowing water stays fresh. The same principle applies to organizations.

Consult Rey Elbo for free. E-mail elbonomics@gmail.com or DM him on Facebook, LinkedIn, X or via https://reyelbo.com. Anonymity is guaranteed, if requested.