L2b 384 Strategic Leadership

8/6/2019 L2b 384 Strategic Leadership

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LeadingStrategicallyThroughEffec5ve

VisionandMission

STC395

Jeffrey A. Martin, PhD 1


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OBJECTIVES

2

1

2

3

4

5 Explain how ethics and biases may affectstrategic decision-making

Identify a firms stakeholders and explain whysuch identification is critical to effectivestrategy formulation and implementation

Understand the roles of vision and mission indeter-mining strategic purpose and strategiccoherence

Understand the relationships among vision,mission, values and strategy

Explain how strategic leadership is essentialto strategy formulation and implementation


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PullingAUSD1BillionCowOutofaDitch


Xerox introducesthe Xerox 914copier in 1959.

This copiertransformed thework place

Xerox was chartermember of thenifty 50-50stocks mostfavored byinstitutionalinvestors

Since 1970s,however, Xeroxhas been crippledby competition(mostly Japanese)

October 2001,Xerox reports firstquarterly loss in16

years. Mulcahy isnot obvious choicefor top position

She lacks productdevelopment andfinancial expertise

She gets it becausethe board hasconfidence in herstrategic mind.

Refines Xeroxvision and remindspeople of core

values

Aligns operationwith the refinedmission and values

Sells Xeroxs Chinaand Hong Kongoperations and half

of a stake in a jointventure with Fuji

Closes down inkjetbusiness

Annual expenses cutby USD 1.7 billion

Sold USD 2.3 billionworth of non-coreassets

Reduced long-termdebt to USD 9.2billion from USD15.6 billion

Xerox returns toprofitability in 2002,generating USD 1.9billion in operatingcash flow and USD91 million in netincome on USD 15.8billion in sales

The fall fromthe nifty 50

Mulcahy takes

over

She lends aturnaround

Xeroxreachesprofitability


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AnneMulcahy,ChairandCEOofXerox-

Leadership


http://www.youtube.com/watch?v=qZG7J98PX58&feature=related


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StrategicLeadership


The task of exerting

influence on otherpeoples pursuit ofgoals in anorganizational context

Leadership:

Managing an overall

enterprise and influencingkey organizational out-comes, such as companywide performance,competitive superiority,innovation, strategicchange, and survival

Strategic leadership:


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Execu5veRoles


Formalauthority andstatus

Interpersonal roles Figure head Leader LiaisonInformational roles Monitor Disseminator SpokespersonDecision roles Entrepreneur Disturbance handler Resource allocator Negotiator


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LevelLeaders


Level 5leaders

Build greatness throughcombination ofwill andhumility

Level 4 leaders

Can lead a group tosuperior levels of

performance

Level 3 leaders

Organize people resources toaccomplish predeterminedobjectives

Level 2 leaders

Work effectively with othersas a member of a team toachieve group objectives

Level 1 leadersMake individualcontributions throughtalent and work ethic


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TwoAributesofLevelLeaders


Professional

modesty

Professional

will

The ability totranslate strategic

intent into theresolve needed to

pursue a strategy

and usually tomake hard

choices over a

period of time

Being someone

who prefers toshare credit rather

than hog it

who tends to shunpublic attention,

act with calmdetermination,

and

exerciseambitions on thecompanys behalf

rather than ones

own


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10/25

WhatDoesitTaketoBeaGoodCEO


Charisma?

There is littleconsensus

on whether

personality or

background

matters more

An Ivy league

MBA?

Integrity

International

management

experience?


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Culture

Cultureis[T]hevalues,businessprinciples,

andethicalstandardsthatmanagement

preachesandprac>cesac>onsspeaklouderthanwords!(Thompsonetal.p.386)



12/25

AnneMulcahy,ChairandCEOofXeroxon

Culture


http://www.youtube.com/watch?v=bt8YWkElLhg&feature=channel


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CriteriaofanEffec5veTop-ManagementTeam

1.Theteamrespondstoacomplexandchangingenvironment.

2.TheteamcanmanagetheneedsofinterdependentbutoNendiverseunits,arenas,orfunc>onalareas.

3.Theteamhasavaluableandeffec>vesocialnetwork.

4.Theteamisabletodevelopacoherentplanforexecu>vesuccession.



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Vision,MissionandStrategy


Vision andMission

Fundamentalpurpose Values View of future

StrategicGoals and

objectives Specific

targets

Measurableoutcomes

Strategy

The central, integrated,externally-orientedconcept of how the firmwill achieve itsobjectives. Consists of 5elements: arenas,vehicles, differentiators,staging, and economiclogic


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VisionUsesofAmbi5onandAmbiguity


Sonys vision in early 1950s:

becoming the company that mostchanges the worldwide image of

Japanese products as being of poorquality.

CitiBanks vision in 1915:

the most powerful, the mostserviceable, the most far reaching

world financial institution the world hasever seen.

Vision statements

generally express long-term action horizons,

are ambitious and forcethe firm to stretch.

theirambiguity allowsflexibility for changing

strategy orimplementation tactics


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VisionAnchoredinGoalsandObjec5ves


Vision

Goalsandobjectives

Examples

Wal-Mart

Grow sales and profitsby 70% per year

Ryanair Be Europes largestairline in 7 years

Matsushita To become a supermanufacturingcompany


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StrategicCoherence


The symmetrical co-alignment of the five

elements of a firmsstrategy

The congruence ofpolicies in functions (e.g.,finance, production,marketing) with these

elements

The overarching fit ofvarious businesses underthe corporate umbrella

Strategic coherence is

Staging

Differentiators

Economic

logicVehicles

Arenas


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BenefitsofUsingStakeholderAnalysis

Canusetheopinionsofthemostpowerfulstakeholderstoshapeyourstrategyandtac>csatanearlystage.

Gainsupportfrompowerfulstakeholderstohelpwinmoreresources.

Canensurethatstakeholdersfullyunderstandwhatyouaredoingandunderstandthebenefitsofyourproject.

Canan>cipatewhatpeoplesreac>onstoyourprojectmaybeandbuildac>onsintotheplanthatwillwinpeoplessupport.



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StakeholderAnalysis


Stakeholders:Individuals orgroups who havean interest in anorganizationsability to deliverintended resultsand maintain theviability of itsproducts andservices

Steps inidentifyingstakeholders

1. Determineinfluences onstrategy formulationdecisions

2. Determine stake-holders power andinfluence overstrategy executiondecisions

3. Determine theeffects of strategicdecisions

After identifying stakeholders ask

Have I identified any vulnerablepoints in either the strategy or itspotential implementation?

Which groups are mobilized andactive in promoting their interests?

Have I identified supporters andopponents of the strategy?

Which groups will benefit fromsuccessful execution of the strategyand which may be adverselyaffected?

Where are various groups located?Who belong to them, and whorepresents them?


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MappingStakeholderInfluenceandImportance


UnknownLittle/Noimportance

Moderateimportance

Significantimportance

Influence ofstakeholder

Unknown

Little/Noimportance

Moderateimportance

Significantimportance

Importance of Stakeholder


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EthicsandBiases


ImplementationExecuting newstrategy to realizegoals

Is the decisionethical?

Have any potential biasesclouded our decision-making process?

Common illusions about ourselves (e.g.,favorability optimism , control)

Escalating commitments Self-serving fairness bias Overconfidence bias Ethnocentrism and stereotyping Risk assessment

New strategy A new means toaccomplish goals

Authority structures Incentive systems Role of corporate

governance


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23/25

WHATDOESITTAKETOBEAGOODFOLLOWER?



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25/25

Exercise:DiamondsintheRough


Staging

Differentiators

Economic

logicVehicles

Arenas

Vision andMission

Fundamentalpurpose

Values View of future

StrategicGoals andobjectives

Specifictargets

Measurableoutcomes

Instructions (15 minutes):

On Flip Chart Paper

1. Its 1 year after youve launchedyour venture

2. Vision & Mission3. Goals & Objectives4. List 1-3 items for each element

on the strategy diamond

Documents

L2b 384 Strategic Leadership