Chapter 11 Strategic Leadership and Managing Crises and Change Lussier, R. and Achau, C. (2007):...

Chapter 11Chapter 11

Strategic Leadership and Strategic Leadership and Managing Crises and Managing Crises and

ChangeChange

Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

Summary of Lecture 18 and 19

Max Weber on charismatic leadership.Argument for and against the locus of charismatic leadership.How one can acquire charismatic qualities.Socialized VS personalized charismatic leaders.Charismatic VS transformational leadership.Phases of the transformation process.Transformational VS Transactional leadershipStewardship and servant leadership


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Learning ObjectivesLearning Objectives

Role of leadership in strategic management processRelevance of internal and external environment Importance of a vision and mission statementRelationship between corporate objectives and strategiesImportance of strategy evaluationRisk Assessment ProcessCrises Leadership and Management

In Next Lecture - Crises Leadership and Management -Need for Change - Phases of the change process - Major reasons for resisting change - People and task-oriented techniques for overcoming resistance to change


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Strategic Leadership

Success is not by chance depend on decisionsmade by strategic leaders

Leader is responsible to analyze companyEnvironment

“Strategic leadership is a person's ability toanticipate, envision, maintain, flexibility, thinkstrategically, and work with others to initiate

changes that will create a viable future for theorganization”


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STRATEGIC MANAGEMENT

Strategic leader can be from top, middle and front line

Top managers are responsible for company success andfailure Strategic management is 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

organizational goals


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STRATEGIC LEADERSHIPThe process of providing the direction and

inspiration necessary to create and implement a vision, mission, and strategies to achieve and sustain

organizational objectives

The purpose of strategic leadership is to effectively implement and guide the process of strategic management


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Strategic LeadersStrategic leaders choose appropriate strategy, createeffective and supportive team, identify and focus on

potential markets and customers, sustain competitiveadvantage, maintain ethical standards, and have

excellent customers relationships


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Strategic Leaders

Strategic leaders perform following responsibilities

1 Conceptualize organization vision, mission and core values

2 Assist to formulate objectives, strategies, policies and structures that translate vision and mission into business decisions

3 create culture and communication structure to facilitate organizational learning and coordination among employees and customers

4 Act as a leader and role model for others


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Strategic Leaders

Strategic decisions at time destroy company because they are made on only judgment

Executive intuition at time bring innovation or may cause blunders

Strategic Management Process1) Strategy Formulation2) Strategy Implementation3) Strategy Evaluation


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The Strategic Leadership/ Management Process

Analyze the environmentInternal (Strengths and Weaknesses)

External (Opportunities and threats)

Strategic flexibility: In order to survive manage environment

Know customers, market trends, competitors, suppliers, economic condition, technological advances and government policies

Strategic fit

Environmental changes are uncertain, strategic leaders must rely on intuition and rational analysis


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Strategic Management

Before starting strategic planning think of 1) Who are we (core ideology)?2) Why do we exist (core purpose)?3) What do we believe in (core values)?4) What inspires us (envisioned vision)?5) Where we want to go (vision statement)?6) What future look like when we go there (vivid description)


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Develop a strategic visionAn ambitious view of the future that everyone in the organization can believe in, that is reasonably attainable, and which offers a future that is better in important ways than what now exists

Strategic Vision answers

What does organization aspire?

What Strategic Vision do?- Facilitate decision making- Inspires- Link past, present and future- Give meaning to work (what and why people do it?)- Establishes standard of excellence

Microsoft: “ A personal computer on every desk in every home”

American Express: “To be the world's most respected service brand”


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Strategic MissionWhat is the organization's purpose?What business we are in?

Two main components: core values and core purpose

Identifies scope of organization operations in service/product and market terms

“Mission statement is an enduring statement of purpose that distinguishes one organization from other similar

organization”

3M: “To solve unsolved problems innovatively”Merck: “To preserve and improve human life”


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Mission Statement

Zenith: making television sets

Analyze the mission statements and identify

What's Wrong

Motorola: applying technology to benefit the public

The March of Dimes : To Cure Polio


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Write a meaningful mission statement

Defines the core purpose and reasons for organizational existence–Should be both broad and precise

Not easy• Can take months and years

–Must change as organization changes


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Create Corporate Level Objectives

Desired outcomes that an organization seeks to achieve for stakeholders–Include both financial (return on investment, sales, profits) and strategic objectives (new customers, market, or product types)

–Help everyone to focus in same direction

–Targets against which performance is compared

–Encourage broader participation

–Link rewards to goal achievement

–Help to evaluate performance and strategy

–Set priorities


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Develop SMARTDevelop SMART Corporate Level Objectives

SSpecific

MMeasurable

AAchievablechievable

RRelevant

TTime bound


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Formulate Strategy

Strategy is the general plan of action that describes resource allocation and other activities for exploiting

environmental opportunities and helping the organization attain its goals

Means to end (How)


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Formulate Strategy that:Enhances value to customers

• Ratio of benefits to cost

–Creates synergistic opportunities•Whole is greater than the sum of the parts (2+2=5)

–Builds on company core competenciesBuilds on company core competencies•Performs extremely well in comparison to Performs extremely well in comparison to

competitorscompetitors


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5 Elements of Good Strategy Development

Arena: Where the organization will focus its resourcesVehicles: How the organization will get thereDifferentiators: How the organization will stand out in the market placeStaging: What will be the speed and sequence of movesEconomic logic: How the organization will obtain its returns


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The Strategic Leadership/ Implementation

• Most difficult part of strategic managementMost difficult part of strategic management- Also the most important- Action Plan

Without appropriate implementation, the bestof strategies can fail–Must be integrated and coordinated–Must overcome resistance to change


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The Strategic Leadership/ Implementation

• Effective leader require to execute strategy Effective leader require to execute strategy • Decisions regarding structure, culture, reward, budget Decisions regarding structure, culture, reward, budget

allocation, rules and policies must match requirements allocation, rules and policies must match requirements of chosen strategy of chosen strategy

• MismatchMismatch: Differentiation through innovation within : Differentiation through innovation within hierarchical and bureaucratic structure hierarchical and bureaucratic structure


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Strategy Evaluation

To determine the effectiveness of strategic choices

Fundamental activities:

-Review internal and external factors

–Measure performance against objectives

–Take Corrective actionTake Corrective action


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Crisis LeadershipLeaders need skills and competence to lead during crises

To provide stability, reassurance, confidence, and a sense of control

•“…tough times won’t create leaders, … they show you what kind of leaders you already have.” Larry BartonLarry Barton


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Crises

What is Crises

Sudden change or incident that disrupt operations

or put threats to company survival and reputation

Natural disaster

Product failure

Human errors (accidents)

System failure

unexpected death of CEO (Owner)


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Preparing for CrisisWe cannot foresee future crises, but we can prepare in a general mannerPre-Crisis Planning

• Do not want to start from zero when crisis occurs

Crisis Team• Good mix of organizational skill sets (include

members from all departments, select calm and strong nerves employees)

Crisis Leader duties • Requires logs•Monitors complaints and behaviors• Identifies patterns or trendsIdentifies patterns or trends•Coordinates team activitiesCoordinates team activities


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Risk Assessment

Used to anticipate crisesWhat could happen?

•Tries to identify weaknesses and Tries to identify weaknesses and threatsthreats–Where are we vulnerable?–Identify potential incidents

•Common tool in crisis planning–What is the worst-case scenario?


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Risk Assessment Model

Risk Identification(Risk Chart)

Risk Assessment & Ranking

Risk Reduction Strategies

Crisis Prevention Simulations

Crisis Management

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Discussion Question 1: List key elements of strategic management process?

Question 2: Elaborate difference between mission and objectives?

Discussion Question 3: How strategic leadership contribute towards achieving organization strategy and objectives?

Discussion Question 4: Describe role of leader in crises?

Discussion Questions

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Summary Summary

Role of leadership in strategic management process

Relevance of internal and external environment

Importance of a vision and mission statement

Relationship between corporate objectives and strategies

Importance of strategy evaluation

Risk Assessment Process

Crises Leadership and Management


Chapter 11 Strategic Leadership and Managing Crises and Change Lussier, R. and Achau, C. (2007):...

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