Strategic leadership

Unit-6Strategic Leadership

The process of using well considered tactics to communicate a vision for an organization

or one of its parts. Strategic leadership is the ability to get people to make their own

decisions with the company in mind. Strategic leadership theory does not involve using

force or threats in order to get people to follow. When a company uses strategic leadership,

it is able to gain the support of its team members by influencing them in a way that makes

them want to contribute the success of the company. Becoming an effective strategic

leader involves developing your skills and knowledge to cope with competition and respond

quickly to opportunities. Balancing daily operations with visionary planning requires that

you think and act appropriately to sustain a competitive advantage.

Concept of strategic leadership

• Strategic leadership refers to a manager’s potential to express a strategic vision for the organization, or a part of the organization, and to motivate and persuade others to acquire that vision.

• It is the potential to influence organizational members and to execute organizational change. Strategic leaders encourage the employees in an organization to follow their own ideas. Strategic leaders make greater use of reward and incentive system for encouraging productive and quality employees to show much better performance for their organization.

• Major Responsibilities:– Visualize future strategic course– Managing an entire enterprise rather than a functional unit

• Corporate, business, and international strategies

– Coping with change from internal and external environments– Attracting and managing human (includes intellectual) capital– Meaningfully influence others– Ensure above average returns

Compiled by Roshan pant(NCC-MBM)

• According to Harvard Business Review, strategic leadership competencies include six essential skills:

• Anticipate: Collect information from a wide range of sources both inside and outside your company's industry or function, to predict competitors' moves and reactions to new initiatives or products.

• Challenge: View and reframe a problem from multiple angles to understand underlying causes.

• Interpret: Exhibit curiosity and openness when testing several working hypotheses, involving others, before coming to any conclusion.

• Decide: Weigh long-term investments for growth with short-term pressure for results, as well as the risks and trade-offs for customers and other stakeholders, when making decisions.

• Align: Examine stakeholders' incentives and tolerance for change and identify conflicting interests.

• Learn: Convey stories of success and failure to advocate learning; course-correct decisions after they have been made if there is refuting evidence.


Traits / characteristics / features / qualities of effective strategic leaders

• Loyalty- Powerful and effective leaders demonstrate their loyalty to their vision by their words and actions.• Keeping them updated- Efficient and effective leaders keep themselves updated about what is happening within

their organization. They have various formal and informal sources of information in the organization. • Judicious use of power- Strategic leaders makes a very wise use of their power. They must play the power game

skillfully and try to develop consent for their ideas rather than forcing their ideas upon others. They must push their ideas gradually.

• Have wider perspective/outlook- Strategic leaders just don’t have skills in their narrow specialty but they have a little knowledge about a lot of things.

• Motivation- Strategic leaders must have a zeal for work that goes beyond money and power and also they should have an inclination to achieve goals with energy and determination.

• Compassion- Strategic leaders must understand the views and feelings of their subordinates, and make decisions after considering them.

• Self-control- Strategic leaders must have the potential to control distracting/disturbing moods and desires, i.e., they must think before acting.

• Social skills- Strategic leaders must be friendly and social. • Self-awareness- Strategic leaders must have the potential to understand their own moods and emotions, as well

as their impact on others.• Readiness to delegate and authorize- Effective leaders are proficient at delegation. They are well aware of the

fact that delegation will avoid overloading of responsibilities on the leaders. They also recognize the fact that authorizing the subordinates to make decisions will motivate them a lot.

• Articulacy- Strong leaders are articulate enough to communicate the vision(vision of where the organization should head) to the organizational members in terms that boost those members.

• Constancy/ Reliability- Strategic leaders constantly convey their vision until it becomes a component of organizational culture.


Key tasks of strategic leadership

– Clarifying Strategic Intent

– Building an Organization

– Shaping organizational change

– Developing Talented Operational Leadership

– Shaping Organizational Culture and Matching it With Strategy

– Matching Structure with Strategy

– Matching Leadership with Strategy


1.Clarifying strategic intent

• A strategic intent is your company’s vision of what it wants to achieve in the long term

• Leaders help their company embrace change by setting for their strategic intent—a clear sense of where they want to lead the company and what results they expect to achieve

• Leader’s vision—an articulation of a simple criterion or characterization of what the leader sees the company must become to establish and sustain global leadership

• Make clear the performance expectations a leader has for the organization, and managers in it, as they seek to move toward that vision


2.Building an organization

Building an organization simply means creating and sustaining a winning or successful organization.

There are three ways good leaders go about building the organization they want:

1. Education and leadership development is the effort to familiarize future leaders with the skills important to the company and to develop exceptional leaders among the managers you employ

2. Perseverance is the capacity to see a commitment through to completion long after most people would have stopped trying

3. Principles are your fundamental personal standards that guide your sense of honesty, integrity, and ethical behavior


Building a capable organization involves:

1. Matching structure to strategy Size Product/ service delivery Competitive environment and volatility Internal political considerations Information and coordination needs of each

components of the firm Growth/ development potential2. Building distinctive competencies Knowledge, skills, abilities Habits and altitudes Managerial capabilities Administrative supports Top-level’s commitment3.Assembling a management Team Assembling a group of core executives Balancing backgrounds and experience Complementing knowledge and skills Making values, beliefs and lifestyle compatible

Fitting personalities and managing styles4. Availing resources to support the organization’s

objectives Types of resources (tangible, intangible,

secrets) Importance of allocation (by units, division,

branch) Maintaining flexible allocation Overcoming barriers to distribution Applying, updating and upgrading the

resources allocation models and methods


3.Shaping organizational change

• How accurate senior executives are about their competitive environment is indeed less important for strategy and corresponding organizational changes then the way in which they interpret information about their environment.

• Organizational changes is an issue in many cases because the companies are attempting to alter their strategies structure to solve strategic problems.

• Interesting, many organizational changes are taking place in the current economic downtown, apparently because poor performance reveals organizational weaknesses.

• Strategic leadership determines the areas and levels of change can earnings;

• *Structure *Responsibility• *Authority *Process• *Actors *Business networks


4.Developing talented operational leadership

• Operational leadership should be change agents, motivators, innovators etc. if the business is to survive and prosper. Thus, it is the responsibility of strategic leadership to recruit and developing talented operational leadership.

• In order to meet the changing needs of organizations, operational leadership should be hired & developed in such a way that they meet desired qualities as per situation.


What Competencies Should Managers Possess?


Focus on these for developing operational leadership?

• Does a talented operational leadership (managers) or strategic leadership enhances the effectiveness of strategies?

• A global labor market, new exists, is instrumental as firms seek talented individuals to add to their fold?

• Should firm need to buy or to make talented operational leadership? The ability to attract and then manage human capital may be the most critical of

the strategic leader’s skills, especially because the lack of talented human capital constrains a firm’s growth.

Strategic needs to be developed by talented individuals who are familiar with corporate internal and external realities, who should consider the global marketplace as the proper domain of analysis.

Skill inventory Management inventory Succession planning Talent profiling (who have specified feature) Talent pooling


5.Matching existing organizational structure

• Strategy gurus like Alfred Chandler and M. E. Porter argue that structure follows strategy.

• Porter states that corporations can adopt one of three general (generic) strategies: cost leadership, differentiation, and focus. And, for each alternative strategy alternative organization design/structure exists.

• Chandler, on the other hand, has emphasized that organization structures follow the growth strategies of the firms. Alternative structures exist for alternative growth strategies , viz., volume expansion, geographic expansion and product diversification


• Depending upon the strategic choice (along with some other factors like size of the firm, technology used, environmental complexities etc.), a firm may pursue one of the following structures.

• Simple/ Entrepreneurial Structure • Functional Structure • SBU Structure • Divisional Structure• Matrix Structure• Holding Company Structure • Network Structure • Other Structures


6.Shaping organizational culture

• Organizational culture (or its sister term ‘corporate culture’) is the shared values, traditions and operating styles commonly held by the people of an organization. Organizational culture is expressed in inner workings and interactions with the outside world. In order to successfully implement strategies, shaping organizational culture is highly essential.Shaping culture require top management’s commitment to materialize it.Example: Coca-Cola's speed culture (standing meeting)

• Strong vibrant cultures that are vision-guided and values-driven create high levels of performance because they attract and keep talented people and they inspire employees to go the extra mile.

• Leaders also use reward systems, symbols, and structure among other means to shape the organization’s culture

• Leaders look to managers they need to execute strategy as another source of leadership to accept risk and cope with the complexity that change brings about .

• leaders need to be aware that culture is not just something that happens outside of a business. Companies large and small have their own cultures as well.


https://www.torbenrick.eu/blog/culture/must-reads-on-organizational-culture/

• Strategic leadership may experience following in organization cultures:

• Ignorance: people ignore change interventions• Avoidance: people attempt to avoid the change• Bargaining: people bargain with change agent• Resistance: people prevent the change • Tolerance: people bearing change unwillingly• Changing the organizational culture requires time,

commitment, planning and proper execution – but it can be done. Changing culture is a bit like changing the course of a large ship


Essentials of Matching Culture with Strategy

1. Identify the aspects of culture – such as innovation, quality, customer focus, speed etc. – that must be promoted in line with the requirement of strategy.

2. (Re)formulate the organization’s values and articulate them to all people in the organization.

3.Hire employees who prefer the essence of strategies.

4. Instruct and socialize these employees as required.

5.Act as a role model (such as if you want develop customer focus culture,

spend time with them, organize FGD with them, celebrate with them).

6. Design physical infrastructure that supports desired culture.


Essentials of Matching Culture with Strategy

6. Design organization systems (such as appraisal system, communication and reporting system etc.) and procedures as required

7. Train people as required

8. Reinforce people behavior through appropriate reward system

9. Set high performance standards and celebrate success.

10.Penalize (and even expel) those who challenge it.


Matching Strategy with Culture (Just Opposite!)

Culture may be strong or weak.

Strong cultures are difficult to change without great effort, time and substantial disruption.

Thus, it may be wise to adopt strategies consistent with existing cultures for those who have strong cultures.

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Managing the Strategy-Culture Relationship


Manage the Strategy-Culture Relationship

• Link to mission

• Maximize synergy

• Manage around the culture

• Reformulate strategy or culture


7.Matching Leadership Style with Strategy

• Matching leadership style and his/her personality attributes with strategy is another important issue.

• For instance, research evidence (Waldersee & Griffiths, 2004) suggests that gradual & minor change demand participative style whereas exceptional & larger change require unilateral leadership style.

• However, there are debates regarding style-strategy match.• Some scholars (such as Fred Fielder) argue that it is not possible to change

an inherent leadership style to match the situation (e.g., changing strategy requirements). Either situation or the leader should be changed for matching.

• While others (such as Robert J. House) argue, that leader should change his/her style/path in line with the situation confronted.

• But,while hiring operational leaders their personality attributes can be matched with the strategic requirements. Such as creative & open-minded people can be given priority to promote/support innovation strategy.


Strategic leadership

Leadership & Management

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