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Lesson#40
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STRATEGIC LEADERSHIP
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STRATEGIC LEADERSHIP
Strategic Leadership is the ability to anticipate and envision the future,
maintain flexibility, think
strategically, and initiate changes that will create a competitive advantage for
the organization in the
future.
“Without a strategy the organization is like a ship without a rudder, going
around in circles.” Joel Ross
and Michael Kami.
Strategy is the essential of all business games. Even in real life without
strategy and plan one can not be
successful. Leader, manager, business man and even individual need to do
strategic planning and
develop strategies in the changing environment. The Three Big Strategic
Questions every body needs
to ask before thinking/planning a strategy are:
o Where are we now?
o Where do we want to go?
o How do we get there?
What is Strategy? A Team’s strategy consists of the set of competitive
moves they are employing to
manage the team/objectives of the team/organization.
o Strategy is Team’s “game plan”
to
• Conduct operations
• Compete successfully
• Achieve Team objectives
Strategic Management:
The set of decisions and actions used to formulate and implement
specific strategies that will achieve
a competitively superior fit between the organization and its environment so as
to achieve organization
goals
Business Strategy Levels:
o Corporate-level strategy
asks, “What business are we in?”
o Business-level strategy asks,
“How do we compete?”
o Functional-level strategy
asks, “How do we support the business-level strategy?”
Strategic Planning:
A Basic Planning Model consists of following steps.
o Missions and Goals
o External Analysis - Opportunities and
Threats
o Internal Analysis - Strengths and
Weaknesses
o Selection of Appropriate Strategies
o Implementation of Strategies
About Mission Statement we have already discussed during previous chapters. Next
two stages/steps
are AWOT analysis. After Analysis, one needs to select appropriate strategy and
finally implement it.
Examples of SWOT Elements:
o Strengths: Favorable
location, talented workers, state-of-the-art equipment
o Weaknesses: Unfavorable
location, outdated equipment, limited capital
o Opportunities: Culturally
diverse customer base, changes in technology, deregulation
o Threats: Ecommerce, declining
market, new competitors
Sample Strategies
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Depending on the nature of business, analysis and priorities,
organization may choose any strategy. Few
examples are given bellow.
o Cost leadership
o Focus
o High quality
o Strategic alliances
o Growth through acquisition
o High speed and first-mover strategy
o Product and global diversification
o Sticking to core competencies
o Brand leadership
o Creating demand by solving problems
o Conducting business on the Internet
Strategic Leadership:
Strategic Leadership involves: The ability to anticipate, envision, maintain
flexibility and empower
others to create strategic change
Vision
An attractive, ideal future that is credible yet not readily available.
o Links the present to the future
o Energizes people and garners
commitment
o Gives meaning to work
o Establishes a standard of excellence
and integrity
Common Themes of Vision:
o Vision has broad appeal
o Vision deals with change
o Vision encourages faith and hope
o Vision reflects high ideals
o Vision defines the destination and
the journey
Mission
The organization’s core broad purpose and reason for existence
Strategy
o Strategy is Team’s “game plan”
to
• Conduct operations
• Compete successfully
• Achieve Team objectives
Strategy Formulation and Implementation
Strategy Formulation
o The integrating knowledge of the
environment, vision, and mission with the core
competence in such a way as to achieve synergy and create customer value
Strategy Implementation
o Putting strategy into action by
adjusting various parts of the organization and directing
resources to accomplish strategic goals
Strategic Leadership
o Requires the Managerial
Ability to:
o Anticipate and envision
o Maintain flexibility
o Empower others to create strategic
change as necessary
o Strategic Leadership is:
o Multi-functional work that
involves working through others
Effective strategic leaders:
o Manage the Team’s operations
effectively
o Sustain high performance over
time
o Make better decisions than
their competitors
o Make straight, courageous,
practical decisions
o Understand how their decisions
affect the internal systems in use by the team/organization
o Solicit feedback from peers,
superiors and team members about their decisions and visions
Determining Strategic Direction:
o Determining strategic
direction involves developing a long-term vision of the Team’s strategic
intent
• Five to ten years into the future
• Philosophy with goals
• The image and character the Team seeks
o Ideal long-term vision has two
parts:
• Core ideology
• Envisioned future
o A charismatic leader can help achieve
strategic intent.
o It is important not to lose sight of
the strengths of the organization/team when making changes
required by a new strategic direction.
o Leaders must structure the team
effectively to help achieve the vision.
Exploiting and Maintaining Core Competencies:
Core competencies
o Resources and capabilities of
team that serve as a source of competitive advantage over its
rivals
o Leadership must verify that the
team’s competencies are emphasized in strategy
implementation efforts
o Teams must continuously develop or
even change their core competencies to stay ahead of
competitors
o In many large orgs, and certainly in
related diversified ones, core competencies are exploited
effectively when they are developed and applied across different organizational
units.
o Core competencies cannot be developed
or exploited effectively without developing the
capabilities of human capital.
Developing Human Capital:
Human capital
o The knowledge and skills of the
org/team entire workforce are a capital resource that requires
investment in training and development
o No strategy can be effective unless
the org/team is able to develop and retain good people to
carry it out.
o The effective development and
management of the team’s human capital may be the primary
determinant of a team’s ability to formulate and implement strategies
successfully.
Sustaining an Effective Organizational Culture:
Organizational culture
o The complex set of ideologies,
symbols and core values shared through the team/org, that
influences the way business is conducted.
o Changing a Team’s/ organizational
culture is more difficult than maintaining it
o Effective strategic leaders
recognize when change in culture is needed
o Shaping and reinforcing culture
requires:
o Effective communication
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o Problem solving skills
o Selection of the right people
o Effective performance appraisals
o Appropriate reward systems
Emphasizing Ethical Practices:
o Effectiveness of processes used
to implement the Team’s strategies increases when based on ethical
practices
o Ethical practices create social
capital and goodwill for the team/org
Actions that develop an ethical organizational culture include:
o Establishing and communicating
specific goals to describe the team’s ethical standards
o Continuously revising and updating
the code of conduct
o Disseminating the code of conduct to
all stakeholders to inform them of the team’s/org’s ethical
standards and practices
o Developing and implementing methods
and procedures to use in achieving the team’s/org’s ethical
standards
o Creating and using explicit reward
systems that recognize acts of courage
o Creating a work environment in which
all people are treated with dignity
o Leaders set the tone for creating an
environment of mutual respect, honesty and ethical practices
among employees
Establishing Organizational Controls:
o Controls
o Formal, information-based
procedures used by leaders to maintain or alter patterns in
team/organizational activities
o Controls help strategic leaders
to:
o Build credibility
o Demonstrate the value of strategies
to the team’s/org stakeholders
o Promote and support strategic change |
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