Strategic Plan and Self-Reflection Summary

Module 5 Overview, Part 1

· Work individually to gather information to identify the characteristics needed to create an ethical culture and a learning organization.

· Understand the role leaders play in creating an ethical culture.

· Apply the concept of a learning organization to the firm to demonstrate how knowledge can be a source of competitive advantage.

· Understand the role a leader's emotional intelligence plays in an organization.

· Describe how corporate responsibility may affect a firm's performance.

· Apply ethical reasoning and ethical principles throughout the strategic management process.

Welcome to Module 5, Part 1!

This module you will focus on several important topics that are key ingredients in successful strategies:

· People

· Leadership

· Ethics

· Organization

It is almost too obvious to state that it is the people who get things done and accomplish great undertakings. Pooling talent and expertise of people in a group helps achieve great accomplishments. If a group has effective leadership, it will have optimal results.

This section you will answer some questions such as:

· What is leadership?

· What is corporate leadership?

· What do leaders do to set strategic direction, design effective organizations, and shape a high-performing culture while serving the best interests of multiple stakeholders?

· What do leaders do to build ethical and learning organizations?

You will start with discussing leadership by reviewing several definitions of leadership. You will analyze leadership traits in detail.

You will also learn about corporate leadership and followership toward building an ethical and well-led organization.

Through this module's lectures you will briefly discuss how leadership mind-set and skill-set can be developed, without being in a formal position of authority.

Click here  to view some background information about Harley Davidson that will help you with the final project. (I have it at the bottom)

Business Policy and Strategic Decisions Project Scenario: Strategic Planning for Harley Davidson, Inc. Scenario The purpose of this exercise is to develop a Strategic Business Plan for Harley Davidson Inc., a publicly traded, employee owned manufacturer of heavyweight motorcycles, recreational and commercial vehicles, military defense items, and small engines, distributing its products to domestic and international markets targeting men and women of all ages. Harley Davidson, Inc. began in 1903 as the Harley Davidson Motor Company by William Harley and Walter Davidson along with his brother Arthur. The original product of these young mechanics was a three-horsepower motorized bicycle which they built in their backyard shed in Milwaukee, Wisconsin. Sales took off almost immediately and in 1907 they began to advertise. In 1909 they introduced the V-twin engine which created the sound synonymous with the Harley Davidson motorcycles. A history of the Harley Davidson, Inc. and additional informational resources can be found at: http://www.encyclopedia.com/topic/Motorcycle_industry.aspx http://users.soe.ucsc.edu/~callon/hd.html http://www.wikinvest.com/stock/Harley-Davidson_(HOG) The motorcycle industry consist of the following major manufacturers: in the United States (Harley Davidson), in Japan (Honda, Yamaha, Kawasaki, Suzuki), in Germany (BMW). The industry practice is to sell their products internationally through foreign distributors. They rely on domestic sales through franchise operations. The fast-growing markets of India and China pose unique problems and opportunities as Harley struggles to meet these new challenges. Industry Issues: Like many industries, the motorcycle industry has faced many challenges over the past years and, as a result, some industry expansion and alliances has occurred intensifying the competition. The impact of these trends and others should be considered in the plan along with how to address these issues and concerns shared by the industry as a whole. Harley’s Board and executive leadership are very concerned about the developments in this industry. They have decided that the Harley Davidson should take a leadership role in the industry by addressing them in a proactive way. Many environmental concerns and other criticisms are also faced by the industry. They want to see that HD continues its leadership role by ensuring that it operates with the highest ethical principles in an increasingly global economy. They are confident that where HD goes, the rest of the industry will follow and for that reason, your strategic planning will be focusing your efforts on HD as you work to develop the plan. Note to Students: During the next weeks, you will be working towards a final project that requires you to develop a Strategic Business Plan. The plan will be developed based on activities performed each week.

Leadership

Leadership, or the lack thereof, shows during times of change.

Leaders who can effectively lead people through rough times are able to achieve these targets:

· Establish a Climate of Positivity: The leaders or managers should be able to sift through the negatives in a changing environment and focus on the positives. The climate of positivity is depicted through a climate of forgiveness, compassion, and gratitude. This, if done genuinely, will reframe the situation for the team and the coworkers, and raise hope.

· Create Readiness within the Organization for Change: The leaders should be able to illustrate the performance gaps by comparing the firm's performance with its goals and with the performance of competitors. This would help create readiness within the organization toward change.

· Generate Commitment to the Vision and to the Strategic Change Proposed: The leaders should be able to generate commitment in the employees by sharing the vision of the future and what the organization will be after the change is fully integrated into the company.

· Institutionalize the Positive Change: The leaders should have the ability, which involves developing people, turning organizational novices/students into teachers of others, and identifying measures and metrics to track success and maintain accountability.

Most of the above qualities fall in the category of "strategic leadership." Individual contributors may not contribute all the qualities but may contribute to some or a combination of the qualities to support strategic changes within their firm.

Leadership Traits

Emotional Intelligence: A Trait of Wise Leaders and Followers

To understand leadership, it is important to learn about leaders and about their traits or capabilities. In the literature on leadership, the qualities or traits attached to effective leaders include intelligence, integrity, maturity, high energy, motivation to lead, and expertise.

The leadership literature is vast and therefore, summed up in three main categories:

· Technical Skills: Include skills from a functional area such as finance, marketing, strategy, or operations.

· Cognitive Abilities: Include analytical skills, business judgment, recognizing patterns, and critical thinking skills.

· Emotional Intelligence: Consists of two broad sets of skills:

· Self-management Skills: Include self-awareness, self-regulation, and motivation.

· Managing Relationships: Include empathy and social skills.

· Level Five Leadership

· Another interesting perspective on leadership comes from management consultant and author Jim Collins, who wrote the books Good to Great and Built to Last. In his book he describes companies that were able to sustain performance over a long period. He discusses multiple contributing factors to the firms' above-average results, including what he calls level five leadership.

· Collins described that the leaders consistently demonstrate two characteristics: humility and fierce resolve.

· His definition of humility is simple. It is a trait in a leader who abundantly gives credit to those around him or her for the success of the organization and does not have an ego the size of the Titanic that needs to be fed. This is a person with high emotional intelligence.

· Complementing the humility is a resolve to help the organization and its people succeed. A level five leader understands the importance of hiring the best people in the company and then listens to them.

· The level five leader is, however, decisive and is able to lead change. This perspective, although interesting, is one approach to leadership, but interestingly, it challenges the myth that leaders should be charismatic to be effective.

· Leadership as a Temporary State

· Robert Quinn, in his interesting book Build the Bridge as You Walk on It, released in 2004, states that no person is a leader all the time and that leadership is a temporary condition where specific skills and competencies come to the fore.

· Quinn's view was called radical by some.

· When these skills are displayed leadership occurs, and when they are not displayed leadership is absent.

· Quinn says that people elect or choose to display the leadership behaviors in specific situations and at specific times. He calls this entering the leadership state.

· He says, "Understanding that leadership is a temporary, dynamic state brings us to a radical redefinition of how we think about, enact, and develop leadership. We come to discover that most of the time, most people, including Chief Executive Officers (CEOs), Presidents, Prime Ministers, are not going to be leaders. We discover that anyone can be a leader. Most of the time, none of us are leaders."

· Quinn's definition is true when we reflect on the ways and places people may display leadership behaviors and the leadership mindset.

· Think about the youth coach who motivates 10-year-old children for peak performance on the baseball diamond but is quiet and unassuming at work.

· Or think about the person who rises to the occasion during a crisis such as Rudy Giuliani during the events of 9/11.

· There are opportunities to lead, and a person who steps in the void and displays leadership skills and competencies is able to develop and hone the requisite skills. This is a call for action to those of you who aspire to lead.

· Do it. Try it. Practice it, and the skills will come.

· They will be acquired faster if you ask for and receive regular feedback about how you are displaying those skills.

· Engendering the Followership Response

· Followership Is Key: Engendering the Followership Response

· What comes to your mind when you first read the phrase, "followership response?"

· There are people you want to follow, and there are people you don't. Therefore, leaders who engender or bring out this followership response are better and effective leaders. They are able to achieve results faster and accomplish goals with others.

· What kind of person will you follow?

· What kind of person fails to generate the followership response in you?

·  

· Combining this ad hoc list with Quinn's ideas, we obtain a definition of a leader as a person willing to step into a leadership role and take action while displaying the leadership mind-set.

· We know that leaders are present at every strata in an organization and are not always in formal positions of authority or "have the title" to be a leader. Therefore, let's look at a way to develop your skills.

Service Leadership

Strategies to Gain Leadership Skills: Service Leadership

No discussion of leadership, especially that adopts Quinn's radical posture on leadership, would be complete without a discussion of how an individual contributor can develop and hone leadership skills.

There are strategies for leadership skill development, and we will talk about two of them:

· First, you should want to lead. Everyone does not aspire for leadership roles or is happy to lead in private life but not at work.

· Second, you need to practice the skills. I have seen tremendous skill development in those people who volunteer with an organization that does what they have a passion for. Most nonprofit organizations welcome volunteers. You may start out working on a committee for an event and work up to serving on the board of directors or a board committee. The good news here is that you get practice away from work where you can observe leadership in action, try out new leadership skills, and do well at the same time. Volunteering is a win-win situation for all.

Let's consider examples on how volunteering helps.

Emily, an MBA student, was elected treasurer of the Young Democrats of Minnesota (MN). She went to a meeting, passionate about a cause—electing Democratic candidates—and was willing to let herself be nominated and run for this office. Yes, she would devote hours of her time, but in return, she would network with many people, gain additional skills in finance and accounting, work for a cause she cares about, and head a committee.

John, an employee with a private organization, started attending luncheon gatherings of the key stakeholders interested in working on behalf of human rights. From serving on a board committee, fund-raising in this case, John went on to serve as a member of the board of directors and, eventually, chair the board. This led to greater visibility in the business community, a broad network, and a much better, more satisfying career path.

These are just two examples that outline the benefits of volunteering: skills building, networking, and giving back to the community. The rate of interest on this is potentially great.

How to Be a Star

How to Be a Star at Work

Doing your job alone, even if the performance is excellent, does not make you a star.

Finding ways to add value across the organization helps you reach there.

Now let's turn back to the idea of strategic leadership, and look at several important and interrelated themes:

· Setting direction

· Shaping corporate culture as an ethical, learning culture

· Organizational design

Corporate Leadership

Direction Setting

Direction setting consists of all strategy-related activities that move the organization forward toward its vision and help achieve its objectives and goals.

To do this a holistic view of the organization is needed. This view should provide a robust picture of the firm's stakeholders, along with a deep understanding of the firm's business model and drivers of profitability.

Organizational Design

Effective strategic leaders are paradoxically hands-on and hands-off. They are practical in setting and reinforcing values, vision, mission, goals, and strategies. These leaders are also active at designing the "right" organizational design to fit the strategy.

Being hands-on in this area ensures that the processes, systems, people development, incentives, and rewards all work to align teams and individuals behind the organizational strategy.

CEOs who define themselves as hands-off in these crucial areas may end up with a great strategy on paper but poor execution in the field. This has lead to the CEO role changing into a more direct, hands-on role and an ascendancy of the chief financial officer (CFO) as a key player.

The role that may have taken a hit in this new configuration is the chief operating officer (COO). When a CEO focuses on strategic, operational, and tactical activities, this will water down the COO's role.

Organizational Culture: Fostering Excellence and Ethics

As you know, culture is the DNA of a corporation exercising a powerful force. Culture shapes strategy, and strategy shapes culture. The history of success or failure within an organization also impacts the culture.

Leaders need to continually be tuned in and plan culture-shaping activities, events, rituals, programs and processes. These activities present opportunities to deliver and reinforce messages of performance excellence and ethical behavior.

All communications present a chance to shape and reinforce values and behavior needed for success and high performance.

Building an Ethical Organization

Ethical organizations are shaped by factors that include the ethics of the founders, the values of the leaders, the corporate culture, hiring practices that focus on hiring ethical people, and mechanisms for ethical decision-making.

Firms May Adopt One of Two Broad Views of Ethics

Management writers and ethics scholars divide the corporate posture on ethics into two broad views:

· A compliance-based approach

· An integrity-based approach

Each approach leads to a different matrix of actions and behavior.

Compliance-Based Approach

Firms adopting the compliance-based approach focus on conforming to all external regulations and laws, and preventing criminal action and misconduct.

These firms place their standards in the hands of lawyers who advise them on what is legal and what is not. Managers are educated on what is legal and how to comply with laws and regulations. The forms of controls used are auditing and reducing degrees of freedom and managerial discretion.

Integrity-Based Approach

In contrast, the integrity-based approach is more value driven. A set of explicit standards of behavior is used to create a self-governing culture that enables responsible and ethical conduct.

The leaders in the organization model integrity and ethical decision-making. Therefore, leaders model the way with help from human resources, corporate communications, and legal and compliance officers.

This approach stems from the assumptions that people will behave ethically based on the mix of culture, ideals, values, incentives, and peer-group behavior. These firms emphasize both what is legal and what is right, which places emphasis on hiring, developing, and rewarding people who "get it" about operating from an uncompromising position of integrity.

Building a Learning Organization

Learning organizations show the following characteristics:

· Empowering employees at all levels that leads to sharing of information and employee ownership in initiatives and corporate strategies.

· Gathering and sharing knowledge across business units. This also includes sharing what works and what does not. The best practices and lessons learned are disseminated across all levels and across business units.

· Accumulating and acting on relevant data in the external environment that can affect the firm's strategy.

· Challenging the status quo and enabling creativity. This is difficult and requires building in mechanisms and processes to gather information and share it. The activities include developing employee skills for empowerment, scanning the external environment, and working with stakeholders in a culture that embraces challenges to innovation and creativity.

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Characteristics of a Learning Organization

Learning organizations take a systems perspective. They follow the practices espoused by the Society for Organizational Learning founded by Peter Senge and others from Massachusetts Institute of Technology (MIT). In the groundbreaking book The Fifth Discipline, Senge outlines five characteristics of a learning organization, including:

Personal Mastery: This is a discipline of aspiration. It involves formulating a coherent picture of the results that people most desire to achieve as individuals — their personal vision along with a realistic assessment of the current state of their lives, or their current reality.

Team Learning: This is a discipline of group interaction. Team learning has its rewards. Through techniques, such as dialogs and skillful discussions, teams reform their collective thinking and learn to mobilize their energies and abilities. The effect of their combined energies is more than the sum of the effects of the individual members’ energies.

Mental Models: This discipline of reflection and enquiry skills focuses on developing awareness of the attitudes and perceptions that influence thought and interaction. By continually reflecting upon, talking about, and reconsidering attitudes and perceptions, people can easily govern their actions and decisions.

Shared Vision: This collective discipline establishes a focus on mutual purpose. People learn to nourish a sense of commitment in a group or an organization by developing shared images of the future they seek to create.

Systems Thinking: In this discipline people learn to better understand interdependency and change. They deal more effectively with the forces that shape the consequences of their actions.

Corporate Teams in Emerging Markets

With the advent of globalization and technology, corporations of today are facing new challenges as they pertain to changing markets and consumer preferences. The focus of today’s business strategies, among other things, is on quality, value, and on-time delivery. Having been faced with these challenges, companies have, in many cases, opted to move away from the traditional corporate structure to a team-based work environment. Statistics have shown that the team approach is quickly taking over virtually every aspect of the business. Implementing team concepts in the workforce enables organizations to move beyond the original organizational and functional boundaries, to solving problems and providing customer satisfaction. However, the success of the team approach relies totally on the type of team that is formed and how it is implemented in the organization. One of the things that should be remembered at all times is that the culture of the organization will have a lot to do with the success or failure of a team. Some of the most common teams that are used by organizations are given below:

Cross-Functional Team: A cross-functional team is a team composed of at least three members from diverse functional entities working together toward a common goal. This team will have members with different functional experiences and abilities, and will likely come from different departments within the organization. There are several applications in which a cross functional team may be used. Some concurrent engineering applications include product research, design, development, reengineering, manufacturing, and redesign.

In these cases, the majority of a product’s costs are committed early in the design and development process. Therefore, companies apply cross-functional teams to the onset of a project to ensure that all the functional perspectives are able to give input into original concept design. Some other applications for cross-functional teams are: to develop total quality management; to study a production problem; to sell company products; to overhaul company procedures; and/or to purchase necessary material.

When new products are developed, budgets are formulated and funds are allocated prior to the start of the project. Once the development process initiates, it is generally driven by the Engineering departments. Due to the complexity of today’s marketplace, it has been determined that engineers developing new products are not totally aware of all customer requirements and manufacturing constraints. Therefore, this concept calls for involving supporting departments such as Marketing, Manufacturing, and Customer Support in the design process so that concerns/issues are addressed up front and valuable resources are not wasted fixing issues at the latter stage of the development process.

Problem Solving Teams: Problem solving teams bring key line managers together to solve real-time project problems with the help of a facilitator. It is the missing link between learning and doing and is focused on a particular problem/issue.

Benefits: Some of its benefits are as follows:

· As participants are from different functional or opertaional areas, this provides them with an opportunity to work together and create synergy. In short, the team will have more knowledge, more support, and more momentum. At times, a well-coordinated team may solve a problem more effectively and efficiently than an individual.

· As the most common approach for this team is "brainstorming," sessions are generally very creative. Ideas created by team members are definitely larger in number than those created by an individual, hence the probability of discovering a “winning” idea to solve a problem is much higher. Ideas can also be better developed within the team, from the “embryo” idea stage to the winning idea stage.

· Teams may be excellent decision makers, if well coordinated. They are more capable of scrutinizing, assessing, judging, and evaluating ideas than individuals.

· Teams may be excellent planners for the implementation stage. As said  earlier, if the implementation is not performed correctly, the demise of any team is imminent.

Drawbacks: Some of the drawbacks of these kinds of teams are:

· Teams may lose momentum and energy during the process.

· “Group Think” phenomenon may develop.

· Takes too much time and ties too may resources.

Example: To solve traffic congestion at a particular intersection.

In this example, the team has been presented with a problem and needs to come up with a solution. The problem is that at a particular intersection, there is traffic congestion. Even though the traffic engineer may have some possible solutions to resolve this issue, inputs from other agencies such as traffic control or environmental agencies can add value in the decision making process. The concept is similar to that of a cross-functional team, however, the focus of this group is narrow and is specified to a particular problem.

Project Teams and Manager Led Teams

Project Teams: These teams are comprised of members belonging to different groups and functions and are assigned to activities for the same project. The structure calls for them to take direction from the Project Manager, and they are tied to the project until its completion.

Benefits:

· Assignments for team members are specific, measurable, attainable, realistic, and time constrained.

· Roles, responsibilities, and deadlines are clearly defined.

· All members have one goal: Completion of project in a timely manner.

· Have only one person (Project Manager) providing direction.

Drawbacks:

· While working on a project, innovation and creativity in other areas suffer.

· Concern for the life of a project after it has been completed becomes a major concern for team members toward the end of the project.

· Reassignment of team members at the conclusion of a project can become challenging for the organization.

Example: Construction projects

These teams consist of members from disciplines, such as Electricians, Framing, and HVAC personal who work together on a construction project with the goal of its completion in a timely manner.

Manager Led Teams: These are the most traditional teams. Here, the manager acts as the team leader and is responsible for defining the goals, methods, and functions of the teams. Managers are also responsible for monitoring and managing performances and processes, overseeing design, selecting members, and interfacing with the organization.

Benefits:

· Efficient: Members do the work of setting goals and outlining the work that needs to be done.

· Managers do not have to watch the teams make the same mistake that was made earlier.

· These teams have low start-up cost.

Drawbacks:

· Responsibility pertaining to the success/failure of the team lies on the shoulders of one individual (Manager)

Examples:

· Flight crew

· Stage crew

· Fire Fighting crew

· Emergency room crew

In all of these teams, the Managers issue directives and are responsible for the end results.

Self-managing; Self-directing; and Virtual Teams

Self-managing Teams:

In these teams, the manager or leader determines the overall purpose or goal of the team and the team is at liberty to manage the method by which to achieve that goal.

Benefits:

· These teams build commitment

· Improve morale

Drawbacks:

· Manager has less control over the process and product

· Progress is difficult to assess

· Process is more time consuming

Example: Executive search firms

Here, the team members manage their own client base, draw up their own contracts, and develop the schedule themselves.

Self-directing Teams:

These teams select their own project and formulate a method by themselves to solve/address the issue. Such a team would be ideal in a company with a marketplace culture. A marketplace culture is one that is highly perfered in professional organizations such as a law firm. Most of the team members are considered equals and therefore need very little direction.

Benefits:

· More opportunity for innovation, higher goal commitment

· Problems are solved by people who are the closest to the issue

Drawbacks:

· Is extremely time consuming

· Have greatest potential for conflicts

· High start-up costs

Examples:

· Quality Circles

· Toyota

These teams consist of individuals who volunteer their time to solve problems as they deem necessary.

Virtual Teams:

Also known as “geographically dispersed team,” “distributed team,” or “remote team.” This team consists of a group of individuals who work across time, space, and organizational boundaries using web-based communication technology such as e-mail, video conferencing services like GoToMeeting, etc.

Benefits:

· Flexibility for team members

· Ease of knowledge transfer

· Increased productivity

· Team cohesiveness

Drawbacks:

· Lack of management

· Limited progress tracking

· Dependent on technology

Examples: Field service teams

Here, the teams are located at secondary locations and communicate with the main office through phone/Internet and other forms of communication.

Summary, Part 1

We covered many important topics this module as we explored leadership and how to develop a learning organization. We talked about how individual contributors can hone leadership skills and adopt the leadership mind-set. Several good ideas were presented, including service learning as a way to become a leader.

In context to leadership in business management, we discussed:

· The meaning of leadership.

· The traits that make you a leader.

· The significance of corporate leadership.

· What an ethical organization is.

· What it takes to build an ethical organization.

· What it takes to build a learning organization.

Linking to the Business Plan—Final Project Activity

In your Harley-Davidson scenario you are on the last leg of the journey to the business plan. Be sure to incorporate ideas in this module's lecture as you develop your plan. At the end of this module you will present your strategic plan.

This second half of this module will include a small recapitulation session of the main topics studied through the course.

The strategic plan will emphasize the implementation and communication of the plan, and the way to overcome resistance or barriers to change.