Leadership Theory

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Learning Outcomes

After reading this chapter, you should be able to:

1. Explain the importance of corporate theory and organizational strategy.

2. Define strategic leadership and its major components.

3. Explain the role of leaders, vision, mission, and values in the strategy creation process.

4. Describe how the 7-S model and the four frames of reference assist leaders in strategy implementation.

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9 Leadership Strategy

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Walt Disney’s theory of value creation in entertainment was embodied in his vision of the company depicted in his 1957 hand-drawn map listing key company assets and competitive capability combinations (Zenger, 2013). He wanted to bring the world innovative, family- friendly entertainment using a multiplatform approach. Fifteen years after his death in 1966 and into the late 1970s, however, his vision of the company was falling apart. Corporate raid- ers in 1984 tried a hostile takeover to sell off Disney’s assets including the theme park, film library, and brand. Michael Eisner helped reinvigorate Disney’s vision, moving the company’s market capitalization from $1.9 billion in 1984 to $28 billion in 1994. But his leadership style and strategies ultimately didn’t live up to Disney’s original vision of the firm.

When Bob Iger became Disney’s CEO in 2005, the company’s growth had been stagnating for several years. Iger’s predecessor, Michael Eisner, had an autocratic, demanding style that worked well for the company early on, but later hindered the board’s governance process, deal making with other companies, and overall company growth (“A Full-Time Occupation,” 2004). Iger strategically refocused the firm to innovate by decentralizing decision making—allowing decisions to fall to multiple people instead of just one person. He reoriented the company’s 150,000 employees around its roster of franchises, selecting and mobilizing expertise around characters, movies, and TV shows that could be replicated in consumer products. He acceler- ated acquisitions, buying Pixar, and launched new products, including a Tinkerbell line and TV programming sold through iTunes (Grover, 2007).

“Our brand is so powerful because of our heritage,” Iger said. “But you’ve got to innovate, and not just in terms of what is new today but what will be new far into the future” (Barnes, 2010). Building off of Walt’s original vision, he phrased the company’s mission this way: “to develop the most creative, innovative and profitable entertainment experiences and related products in the world.”

Iger has been the protector and chief strategist of Walt’s original vision of the firm. He must keep the company focused on a long-term vision while watching over present-day opera- tions, moving Disney into the future while preserving the best of its leg- acy. Iger’s term with Disney has seen the company’s stock value climb 23% in fiscal 2010, compared with a 12% gain for the S&P; the company’s mar- ket cap has since grown to $184.28 billion (Palazzo, 2011; ycharts, 2015). Tom Staggs, COO, has been named as the successor to continue Iger’s legacy (Littleton, 2015).

In the previous two chapters, we examined two different leadership skills: communication and leading teams. In this chapter, we focus on organizational and leadership strategy. Recent studies on strategy and leadership argue for creative and innovative thinking; agile and flexible execution, especially in a globalizing world that is hypercompetitive and digitally connected (Iansiti & Lakhani, 2014; McGrath, 2013). Strategic thinking

ASSOCIATED PRESS/Jae C. Hong

Bob Iger was the protector and chief strategist of Walt’s original vision of the firm.

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Section 9.1 The Context and Process of Strategic Leadership: Corporate Theory and Organizational Strategy

and implementation require not only thinking outside the box, but also anticipating, forecasting, and analyzing opportunities and threats that haven’t but may very well occur (Daewoo, Chinta, Lee, Turner, & Kilbourne, 2011). When leaders and their teams select a strategy, they must locate and mobilize the right talent and expertise to plan, communi- cate, and execute their course of action (Kim & Mauborgne, 2014; Picken, Liang, Achidi Ndofor, & Priem, 2010).

Effective strategic leadership depends on a number of factors discussed throughout this text; it is still persons and teams whose processes are embedded in the organization’s systems that interact with both internal and external organizational environments and stakeholders to bring about desired results. As McGrath (2013) noted, “One thing about strategy hasn’t changed: It still requires tough choices about what to do and, even more important, what not to do. . . . So defining where you want to compete, how you intend to win, and how you are going to move from advantage to advantage is critical” (p. 70).

Leaders must establish the right strategy for their organization and then secure support from followers and other stakeholders who help realize the strategy (vendors, suppliers, inter- est groups, media, and customers). Implementing, sustaining, and even changing a strategy requires power and influence, which come with their own set of ethical issues. As always, con- sider your own leadership and leadership potential as you read. Assessments are available to help you discover your own sources of visioning, leadership, and power.

9.1 The Context and Process of Strategic Leadership: Corporate Theory and Organizational Strategy

“A leader’s most vexing strategic challenge is not how to obtain or sustain competitive advantage—which has been the field of strategy’s primary focus—but rather, how to keep finding new, unexpected ways to create value” (Zenger, 2013, p. 74). This holistic approach to understand strategy requires, according to Zenger, developing a firm’s “corporate theory”— that is, a theory that explains “how a firm can create value by combining the company’s unique resources and capabilities with other assets” (p. 74). The particular theory of each company reveals how it can continue to create value.

Corporate Theory

Based on Zenger’s (2013) research into a number of highly successful companies, the practice of such leaders as Steve Jobs, Walt Disney, and others first developing a theory of their firms’ purpose and value creation capabilities involves leaders using available knowl- edge and prior experiences to develop a model of the landscape and then try to anticipate where to find value in that model. During this process, leaders start to form a vision of the company’s capabilities and value extensions. Zenger calls this map, “Walt Disney’s theory of value creation in entertainment” or Disney’s “corporate theory” of how the company would work. The map identified patterns of key assets and capability combinations that grew out of Disney’s theory, which did in fact evolve but has not fundamentally changed over time.

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Section 9.1

How can someone tell if an organization’s theory works? Zenger said the answer lies in exam- ining the three “sights” of the theory: Foresight, Insight, and Cross-sight. Foresight identifies beliefs and expectations of how a firm’s industry, customer preferences, relevant technolo- gies, and competitor actions will evolve. Disney’s foresight was that “family-friendly visual fantasy worlds had vast appeal” (Zenger, 2013, p. 74). This process is similar to scanning the issues and opportunities in an environment, which we later discuss. Insight involves dis- cerning the uniqueness of an organization’s assets and activities. Some of Disney’s original insights included the creation of his fantasy characters that were automated. Cross-sight involves identifying how different company assets are complementary and how these can be combined with others to create value.

Disney saw and operationalized the interconnections of his firm’s assets and capabilities. Those later strategies that remained true to Disney’s theory of his firm continued to evolve and succeed in changing marketplaces. It was only when some elements of later leaders’ per- sonalities and styles, or their processes (communications, ways of visioning) and resultant systems (visions, strategies, organizational cultures and structures) strayed from Disney’s theory of the firm did trouble ensue.

Steve Jobs, like Walt Disney, also developed a theory of Apple® from the outset. His foresight was evidenced in his vision of how customers’ tastes would evolve to use individual comput- ers and then devices, like the then Sony Walkman. He believed in the aesthetics and practical- ity of devices that would be consumer friendly and attractive (Zenger, 2013). His insight about the capability and value creation of product design was partly a reflection of his personality: “Jobs was a self-proclaimed artist, obsessed with color, finish, and shape; but he transferred this obsession to the technology as well” (Zenger, 2013, p. 77). His cross-sight was seeing and applying graphical user interface (GUI) technology from Xerox to personal computers in the form of windows, menus, and icons—culminating in the Macintosh computer. Founders like Disney and Jobs had theories of their companies that required new strategies to survive and thrive, but elements of their original visions endured. Even though Jobs was ousted from Apple in 1985, he returned in 1996 to revive and extend Apple’s original vision into new product devices and designs.

Not all founders’ theories and visions of their companies maintain their original or extended value; for example AT&T has struggled in its identity and ability to create value from its assets. Many companies also have no theory grounding their assets, capabilities—that is, they have no organizational strategy.

Organizational Strategy

Organizational strategy is “the sum of the actions a company intends to take to achieve long-term goals” (Johnson, 2015). Strategies also answer a key question, “How do we cre- ate value?” Michael Porter (1996), strategy guru at Harvard, said “The essence of strategy is choosing to perform activities differently than rivals do” (Porter, 1996). Strategies provide direction for organizations. The Roman philosopher Seneca said that if a person does not know toward which port she or he is steering, no wind is favorable. Strategies are needed by boards of directors (and trustees) to ensure that organizational leaders and managers are

The Context and Process of Strategic Leadership: Corporate Theory and Organizational Strategy

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Section 9.1

carrying out their responsibilities of providing direction to an organization for its sharehold- ers and stakeholders. Strategies are also needed by employees for direction and guidance in their work and motivation.

Three types and levels of strategy for larger orga- nizations are corporate, business, and functional strategies (Beard & Dess, 1981; Bryman & Bell, 2015; Robbins & Coulter, 2012). Corporate strat- egy involves an entire company and address the question of what business(es) a company should or desires to be in. Corporate strategy deter- mines the direction that the organization is going and the roles that each business unit in the orga- nization plans in pursuing that direction. Business strategy maps back to the corporate strategy and determines how an organization should compete in its business(es). For larger firms, each business will have its own strategy to deal with products and services. Smaller businesses deal with less complex business strategies. Functional strategy overlaps with and extends the business strategy to func- tional departments like research and development, marketing, sales, manufacturing, human resources, and finance. All strategies extend and relate to the corporate level strategy.

Strategies are the first step before developing orga- nizations’ business models (i.e., how organizations make money; or, the designs for the successful operation of organizations that include sources of revenue, customers, products/services, and financing). If strategies address the question of how value is created, business models address the question, how does strategy translate into value? Following the business model, key performance indicators, or metrics, can be identi- fied to address the question of how we measure our performance. Then corporations define risk management policies and procedures that address the question, What can go wrong and what do we do? (Larcker, 2011).

Developing strategy is a process, not an event. Although the talent, efforts, and styles of indi- vidual founders and CEOs are important in defining, overseeing, and implementing organiza- tional strategies—as the chapter opening scenario about Disney shows—the input of senior leadership teams and others in an organization is also necessary in helping tweak, adjust, and redefine strategies, especially innovative strategies in turbulent, highly competitive environ- ments. Pisano (2015) said that the most senior leaders of the organization guide the strategy process, especially for innovation.

Innovation cuts across just about every function. Only senior leaders can orchestrate such a complex system. They must take prime responsibility for

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Seneca famously expressed that if a person does not know toward which port she or he is steering, no wind is favorable.

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Section 9.3 Strategy Creation

the processes, structures, talent, and behaviors that shape how an organiza- tion searches for innovation opportunities, synthesizes ideas into concepts and product designs, and selects what to do.

9.2 Strategic Leadership Defined A strategy is also defined as a comprehensive plan for how an organization fulfills its pur- pose and realizes its vision (Hambrick & Fredrickson, 2001). Thus, strategic leadership involves leading with a theory of the firm, as discussed previously, and a plan: imagining and anticipating the future, working with others to realize it, and remaining open-minded to changing course as needed (Barnett, Greve, & Park, 1994; Miller, 2002). This type of leadership requires constant assessment and evaluation, of both the external environment and internal resources, and the ability to balance the two to constantly advance toward the organization’s goals. Part of the mission of a strategic leader is to stay a step ahead of the competition through innovative thinking and decision making (Hoskisson, Hitt, Ireland, & Harrison, 2013).

So why do we need strategic leadership? Iger’s work at Disney shows what a difference strategic leadership can make. A leader’s personality and personal style affects strategy identification and implementation (Livengood & Reger, 2010). Eisner’s aggressive style at Disney worked well during some periods of Disney’s history, but not well in later times. Other studies have shown that strategic management can positively impact an organiza- tion’s performance, including profitability (Miller & Cardinal, 1994), while a lack of a lead- ing strategy can negatively affect profitability by up to 44% (Finkelstein & Hambrick, 1996). One study showed that Chinese firms that engaged strategic human resource management (SHRM) in general were able to achieve better performance than firms that did not; Wei and Lau (2008) noted that firms using strategic human resource management “are more conscientious about market needs and take more initiative in developing HR practices that are compatible with business strategies” (p. 4) and lead to better overall motivation. There are two basic elements of strategic management: strategy creation and strategy imple- mentation. A leader spearheads the creation of a strategy using the organization’s vision and mission as guides for new initiatives and supporting structures (Daft, 2016), and then implements the strategy using objectives, policies, initiatives, and supporting structures that translate the organization’s vision and mission into practice. A strategic leader must also model the organization’s values and foster a culture and open climate within the work- place so that the strategy can be implemented more effectively (Greenwood & Miller, 2010; Harrison & St. John, 2002).

9.3 Strategy Creation Forming a comprehensive strategy is no easy task. A leader must fully understand both the environment and the organization’s core strengths, and often must combine past expe- rience with future projections (Ireland & Hitt, 1999). Here we are referring to the highest overall strategy of an organization, the corporate or enterprise level. Other local, or lower

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Vision

Mission

Core Values

Strategy

Strategy Implementation

How we will proceed

What we believe

What we will do

Where we are going

What we stand for

Section 9.3 Strategy Creation

level, strategies all relate back and use parts of the larger strategy. Even in midsize and not- for-profit organizations, this higher-level strategy is needed to guide the other departments, working units, divisions, or teams in their work.

When formulating a strategy, leaders rarely work alone. They brainstorm and work with teams and groups to analyze, question, and argue over different scenarios and options; during this process they also align instincts with assessment (Smith & Shefy, 2004). Smith and Shefy (2004) noted that executives use their intuition as well as facts when working with their teams in formulating a strategy. Intuition, wrote Smith and Shefy (2004), “presents the pos- sibility of turning ideas into action and speeding up decision-making” (2004, p. 79). In writ- ing about Henry Mintzberg, a leading scholar of strategy and management, Morrison (2003) noted that Mintzberg’s argument is as follows: strategic planning is about analysis (i.e., break- ing down a goal into steps, designing how the steps may be implemented, and estimating the anticipated consequences of each step).

Strategic thinking is about synthesis, about using intuition and creativity to formulate an inte- grated perspective, a vision, of where the organization should be heading. The problem is that strategic planning proponents believe that analysis encompasses synthesis; that in the best practice, strategic planning, strategic thinking, and strategy making are synonymous. This belief, in turn, rests on the assumptions that prediction is possible and that the strategy- making process can be formalized (Morrison, 1994).

All strategies must stem from a solid foundation of vision, mission, and core values, as shown in Figure 9.1: where we are going, what we stand for, and what we believe. Only then can we know how we are to proceed (strategy) and what to do (implementation).

Figure 9.1: Building strategy

Vision

Mission

Core Values

Strategy

Strategy Implementation

How we will proceed

What we believe

What we will do

Where we are going

What we stand for

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Section 9.3 Strategy Creation

Strategy Roles of Leaders

A McKinsey study (Birshan, Gibbs, & Strovink, 2014) that surveyed 350 senior strategists representing 25 industries worldwide found that effective organizations are transforming strategy development into an ongoing dialogue about leadership and budget. “Some organizations have even instituted a more broadly democratic process that pulls in company-wide participation through social-technology and game-based strategy develop- ment” (Birshan et al., p. 2). The authors summarized their findings into five archetypes (we would say “roles”) that effective strategists use in their work and that are based on “a strategist’s signature strengths.” The five roles are architect, mobilizer, visionary, surveyor, and fund manager.

The architect uses fact-based analysis to identify industry moves and to understand their companies’ sources of competitive advantage “as a foundation for clear, differ- entiated strategies” (Birshan et al., p. 2). An example of the architect is the strategist of an oil and gas company who recently led a root-and-branch strategic review of her largest business unit, using data analytics methods.

The mobilizer ensures that strategy meetings focus on strategic dimensions and that par- ticipants have the skills to add value. Mobilizers “ask the right questions, scrutinize critical assumptions, and ensure that their companies are learning organizations: porous to outside trends and examples” (Birshan et al., p. 2). In this role, strategy leaders also ensure that strat- egy is articulated concisely and in easy-to-communicate ways that can be seamlessly imple- mented. A strategist at an aerospace company who ran core business skill training programs to help key employees draft clear, researched strategic proposals is an example of a mobilizer.

The visionary scans the environment for trends that signal opportunities or risks for the busi- ness. In this role strategists use big data to spot growth opportunities. The visionary role also helps leaders identify new products, services, and business models. One example of this type was a chief strategist in the paper industry who, even in slow moving markets, designed inno- vation workshops to identify new products, services, and business models.

Surveyors, like visionaries, also scan the environment for risks and opportunities, but this role requires a deep knowledge of government and regulatory strategy. Surveyors help shape public discourse and debate for their industries and companies. For example, an aerospace industry employee characterized his role as a “long-term health” advocate who researched and spotted “the trends, shocks, and competitive behavior that will keep the company around for 100 years” (Birshan et al., p. 5).

As fund managers, strategic leaders use analytics to reallocate resources and optimize their corporate portfolio of their businesses. This role focuses on performance by providing infor- mation to make tough decisions such as if and when their companies should enter and exit businesses, or grow and prune existing portfolios. For example, another chief strategist said her top priority is assisting the company’s executive committee make difficult choices to move resources away from “traditional cash cows and into a disruptive technology that represents the future of the business.”

Clearly there is not one set of definitive roles leaders must play as strategists with their teams. In Chapter 1 we discussed several other roles leaders and managers. Because leaders must

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Section 9.3 Strategy Creation

strategically position and manage their organizations in different changing environments, other roles will no doubt evolve over time. In the following sections, we discuss the primary processes of creating and implementing strategies in organizations.

Vision

A vision is an idealized goal or state that an organization aspires to achieve (Jagersma, 2007). Although it may not be immediately attainable, a vision gives both employees and clients something to believe in, a portrait of improvement (Hamel & Prahalad, 1994). It provides direction for the company’s course by outlining a destination, and it invites par- ticipation through its positive and uplifting description. Before continuing, take this vision assessment (http://www.mentoringgroup.com/personalv2.html). It will give you an idea of the meaning of vision statements, and provide a baseline of how your (and an employ- ee’s) vision maps and matches to an organization’s. Also explore related resources (http:// www.mentoringgroup.com/personalv1.html) about creating or revising your personal vision.

Vision statements accomplish many things, such as

• Define the optimal desired future state—the mental picture—of what an organiza- tion wants to achieve over time.

• Provide guidance and inspiration as to what an organization is focused on achieving in 5, 10, or more years.

• Function as the “north star” to inform and help all employees understand their work that ultimately contributes toward long-term goal accomplishment.

• Align decisions back to the source of the organization’s future state. • Serve as a source for other departments and work units to define their visions both

at their organizational level and as individual contributors in the organization. (Evans, 2010)

Visions, like strategy and business models, are not static, especially in fast-paced, com- petitive, and high-risk environments, in which these must also be adjusted and adapted to changing trends, issues, and opportunities. For example, when the Chinese company Alibaba started its business in China, Internet penetration was less than 1%. Expectations were that this figure would increase, but no one really knew at that time. So founder and CEO Jack Ma and his team experimented with its vision which became one premised on adaptability: “As the market evolved, the company’s leaders reevaluated the vision, checking their hypotheses against reality and revising them as appropriate … When the market changed, so did the vision” (Reeves, Zeng, & Venjara, 2015, p. 77). The company successfully went on to spin off, create, and recreate other parts of the original company as one result of its resiliency and experimental use of visions, strategies, business models, and practices. Of course, not all organizations and companies are like Alibaba, or for that matter Google, Uber, Airbnb, and other such technology companies. But firms like these provide examples and models from which others can learn.

Before reading further, take Assessment 9.1 to see if you have a vision for yourself. There are common competencies between creating a vision for an organization and for oneself.

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http://www.mentoringgroup.com/personalv2.html

http://www.mentoringgroup.com/personalv1.html

Section 9.3 Strategy Creation

Assessment 9.1: Your Personal Vision

Instructions

How much do you think about the positive outcomes you want in your future? Do you have a personal vision for your life? Indicate whether each of the following items is mostly false or mostly true for you.

Mostly True Mostly False

1. I can describe a compelling image of my future. _____________ _____________

2. Life to me seems more exciting than routine. _____________ _____________

3. I have created very clear life goals and aims. _____________ _____________

4. I feel that my personal existence is very meaningful.

_____________

5. In my life, I see a reason for being here. _____________ _____________

6. I have discovered a satisfying calling in life. _____________ _____________

7. I feel that I have a unique life purpose to fulfill. _____________ _____________

8. I will know when I have achieved my purpose. _____________ _____________

9. I talk to people about my personal vision. _____________ _____________

10. I know how to harness my creativity and use my talents.

_____________

Scoring and Interpretation

Add the number of mostly true answers for your score. A score of 7 or above indicates that you are in great shape with respect to a personal vision. A score of 3 or below suggests that you have not given much thought to a vision for your life. A score of 4–6 is about average.

Creating a personal vision is difficult work for most people. It doesn’t happen easily or naturally. A personal vision is just like an organizational vision in that it requires focused thought and effort. Spend some time thinking about a vision for yourself and write it down. Source: Based on Chris Rogers, “Are You Deciding on Purpose?” Fast Company (February/March 1998), pp. 114–117; and J. Crumbaugh, “Cross-Validation of a Purpose-in-Life Test Based on Frankl’s Concepts,” Journal of Individual Psychology 24 (1968). pp. 74–81.

An organization’s vision is articulated in what is called a vision statement. A strong vision statement is not complicated; it catches the imagination through clear, compelling lan- guage. At the same time, the end goal should not be so unrealistic as to be unreachable. Part of the attraction of a powerful vision lies in its possibility (Chattopadhyay, Glick, & Huber, 2001; Kantabutra & Avery, 2010; Slack, Orife, & Anderson, F., 2010). If a vision isn’t attainable, why bother trying? The vision statement serves as an inspiration, an impetus for action. Although a vision statement should be grounded in reality, it also reinvents the pres- ent by showing how today could be substantially different (Douglas, Burtis, & Pond-Burtis,

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Section 9.3 Strategy Creation

2001). For example, people may not all agree with how the No Child Left Behind and Race to the Top education programs are implemented, the names of the initiatives invoke a com- mon goal and conjure scenarios in which all American children graduate from high school with fundamental knowledge and skills. Although currently thousands of students drop out of school or manage to graduate without a basic skill set, it is not inconceivable to imagine all children making it through high school; this vision does not sound like science fiction. The vision is powerful because it could be possible today—meaning it should be happening today.

The Swedish furniture and household-goods store IKEA® has a simple corporate vision statement: “to create a better everyday life for the many people by offering a wide range of well-designed, functional home furnishings at prices so low that as many people as possible can afford them” (IKEA, 2015). IKEA believes that home is the most important place in the world and children its most important people. Creating low-cost furniture is an attainable goal, and there is an implicit ambition regarding how large this organization will scale. These solutions should be available to everyone. The statement carves out a specific niche for the company and defines what the company is striving to achieve as well as frames what it will not do.

Having a vision statement leads to several concrete organizational bene- fits. First, clear vision statements lead to better performance and increased satisfaction among employees (Baum, Locke, & Kirkpatrick, 1998; Kaplan, Norton, & Barrows, 2008). Second, decision making becomes more straightforward because the direction and goals of the organiza- tion are clearly articulated (Kaplan, 2007). Finally, a strong leading vision statement helps set the culture of a company and calls for employees to aspire to a high standard (Daft & Lengel, 1998). IKEA’s vision state- ment exemplifies this. The employees aren’t making cheap furniture for an international distributor; they are improving their customers’ lives and providing afford- able options, which is more satisfying than working for a bottom line. The vision state- ment calls for high-quality work in its description of “better living.” The simplicity of the statement also provides clear guidelines for the organization. For example, given its cur- rent vision, IKEA would never produce a luxury line of furniture because that would be unaffordable.

Beyond the benefits of having a strong vision, a lack of a straightforward vision statement can have detrimental effects on an organization. Research has shown that a large part of employee turnover results from a lack of clear direction in an organization; in other words, there is no leading vision to guide and motivate staff. The Hay Group surveyed 1.2 million peo- ple at 400 organizations and found that “one of the most important predictors of employee

iStock Editorial/Thinkstock

The Swedish furniture and household-goods store, IKEA, has a simple corporate vision: “Affordable solutions for better living”.

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Section 9.3 Strategy Creation

commitment, and ultimately loyalty, is the connection between the individual and the big pic- ture” (Prewitt, 2005, p. 26). People like their work to have purpose and consequence beyond balance statements (Nanus, 1992); without a compelling vision, it can be hard for employees to connect with an organization at a deeper level. Although profit is a fundamental goal of many organizations, a vision statement that captures more than the bottom line lets indi- vidual employees feel like they are part of something bigger, giving them more than a simple financial motivation for their positions (Senge, 1990).

A strategic leader helps employees make this connection with the vision and shows how each individual’s work contributes to the company’s future (Brown, 2005). The vision is not merely a statement to help an isolated leader set the direction (Sashkin, 1988). Instead, the vision statement supports team building by establishing a common goal (Collins & Porras, 1991) and engages individuals at an emotional level (Nanus, 1992).

After faltering during the recent recession, a reinvigorated GM has a new vision that explicitly invokes their employees: “GM’s vision is to be the world leader in transportation products and related services. We will earn our customers’ enthusiasm through continuous improve- ment driven by the integrity, teamwork, and innovation of GM people” (General Motors Corp. GM). This leading vision establishes a domain (transportation products and related services), sets an organizational goal (continuous improvement), and appeals directly to their extraor- dinary employees (known for their integrity, teamwork, and innovation). The inclusive “we” in the mission makes every GM employee part of the team while setting a tone for the organi- zation’s new culture.

Although vision focuses on a future goal, strategic leaders also have to be aware of more immediate objectives. One way of thinking of this connection between long-term and short- term goals is through the analogy of “bifocal vision,” in which a strategic leader addresses current needs while working toward future goals (Harari, 1997). This concept is similar to O’Reilly and Tushman’s (2007) notion of organizational ambidexterity: “Under the appropri- ate conditions, organizations may be able to both explore into new spaces as well as exploit their existing capabilities. These strategic contradictions can be resolved by senior leaders who design and manage their own processes and, in turn, [create] ambidextrous organiza- tions” (pp. 45–46). O’Reilly and Tushman (2007) note that “to accomplish this difficult feat is primarily a leadership task rather than one of structure and design. It requires a leadership team with the skills necessary to provide a compelling vision and strategic intent, a clear con- sensus and commitment within the team” (p. 46).

In the case of the Disney Corporation, described at the beginning of this chapter, the end goal is an entertainment company that offers diverse services. As Disney branches into new media opportunities and tries to identify and create new markets, its chief executive also manages current goals: for example, how to direct television programming resources and how to coordinate movie and toy releases (Grover, 2007). Disney continues to cater to and build its existing markets while imagining new possibilities, and the current projects become stepping-stones to the future vision.

Now take Assessment 9.2. Compare your results on this assessment to your results on Assessment 9.1. Notice what skills in these leadership dimensions you may need to develop, and which skills you possess now.

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Section 9.3 Strategy Creation

Assessment 9.2: Your Strategy Style

Instructions

Think about how you handle challenges and issues in your current or a recent job. Then circle a. or b. for each of the following items depending on which is generally more descriptive of your behavior. There are no right or wrong answers. Respond to each item as it best describes how you respond to work situations.

1. When keeping records, I tend to:

a. Be very careful about documentation

b. Be more haphazard about documentation

2. If I run a group or a proj- ect, I:

a. Have the general idea and let others figure out how to do the tasks

b. Try to figure out specific goals, timelines, and expected outcomes

3. My thinking style could be more accurately described as:

a. Linear, going from A to B to C

b. Thinking like a grasshop- per, hopping from one idea to another

4. In my office or home, things are:

a. Here and there in various piles

b. Laid out neatly or at least in reasonable order

5. I take pride in developing: a. Ways to overcome a bar- rier to a solution

b. New hypotheses about the underlying cause of a problem

6. I can best help strategy by making sure there is:

a. Openness to a wide range of assumptions and ideas

b. Thoroughness when implementing new ideas

7. One of my strengths is: a. Commitment to making things work

b. Commitment to a dream for the future

8. For me to work at my best, it is more important to have:

a. Autonomy b. Certainty

9. I work best when: a. I plan my work ahead of time

b. I am free to respond to unplanned situations

10. I am most effective when I emphasize:

a. Inventing original solutions

b. Making practical improvements

Scoring and Interpretation

For the strategic-innovator style, score 1 point for each a. answer circled for even-numbered questions, and 10 points for each b. answer circled for odd-numbered questions. For the strategic-adaptor style, score 1 point for each b. answer circled for even-numbered questions and 10 points for each a. answer circled for odd-numbered questions. Which of your two scores is higher and by how much? The higher score indicates your strategy style.

Strategic innovation and strategic adaptation are two important ways leaders bring creativity to strategic management. Leaders with an adaptor style tend to work within the situation as it is given and improve it by making it more efficient and reliable. They succeed by building on what they know is true and proven. Leaders with an innovator style push toward a new paradigm and want to find a new way to do something. Innovators like to explore uncharted

(continued)

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Assessment 9.2: Your Strategy Style (continued)

territory and seek dramatic breakthroughs, and may have difficulty accepting an ongoing strategy. Both innovator and adaptor styles are essential to strategic management, but with different approaches. The strategic adaptor asks, “How can I make this better?” The strategic innovator asks, “How can I make this different?” Strategic innovators often use their skills in the formulation of whole new strategies; strategic adaptors are often associated with strategic improvements and strategy execution.

If the difference between your two scores is 2 or less, you have a mid-adaptor/innovator style and work well in both arenas. If the difference is 4–6, you have a moderately strong style and probably work best in the area of your strength. And if the difference is 8–10, you have a strong style and almost certainly would want to work in the area of your strength rather than in the opposite domain. Sources: Adapted from Marcic, D., & Seltzer, J. (1998). Organizational behavior: Experiences and cases, 284–287. Cincinnati, OH: South-Western Cengage Learning; and Miller, W. (1997). Innovation Styles. Dallas, TX: Global Creativity Corporation. The adaptor–innovator concept is from Kirton, M. J. (1976). Adaptors and innovators: A description and measure. Journal of Applied Psychology, 61, 623.

Mission

If the vision and vision statement describe the future goal, the mission defines an organiza- tion’s purpose and answers the question “What do we stand for?”. A mission statement usually comprises two parts: core values and core purpose. Like the vision statement, a strong mis- sion statement provides direction and helps establish an organization’s culture (De Vries, R., Bakker-Pieper, & Oostenveld, 2010; Ellingwood, 2001). It also differentiates one corporation from another by defining unique characteristics (David, 2003). To get a sense of organizational mission statements, try articulating your own mission statement. Take this exercise (http://www .carrollk12.org/Assets/file/MVH/Resources/Portfolio%20-%20Mission%20Statement.pdf ).

Although a mission statement may be brief, it can reveal a great deal about an organization. Google has a rather unique corporate mission: “To organize the world’s information and make it universally accessible and useful” (“Google. Mission Statement,” 2015). The mission is gen- eral enough to encompass services from Google’s search engine to advertising to Gmail and translation. The openness and generality leave room for growth, but Google is clear about its purpose and ambition, and each of its products serves as another step toward organization, usefulness, and accessibility.

Facebook, which was founded in 2004, has another well-known mission statement. Facebook’s mission is “to give people the power to share and make the world more open and connected.” People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them (“Facebook Mission Statement,” 2015). This mission is particularly interesting when compared to an earlier mission statement from 2008, which was “Facebook helps you connect and share with the people in your life”(“Facebook. Mission Statement,” 2008). The older mission has a narrower focus, specifically looking at social spheres at the personal level. Previously, Facebook wanted to reinforce and maintain existing relationships. The updated version communicates a far grander purpose—to share with the world and to facilitate connections worldwide. Facebook’s more recent products, from Face- book Connect (which allows Facebook users to log in to other websites using their Facebook

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Section 9.3 Strategy Creation

profiles) to Open Graph (which lets people “like” web pages outside of Facebook) would have been beyond the scope of the mission from 2008, but clearly fall within the scope of the current mission.

A succinct and straightfor- ward leading mission shares many of the same organiza- tional benefits as a clear vision statement. It can also simplify decision making by providing a blueprint of organizational goals, and it helps employees feel as though they’re working toward a common cause, cre- ating a positive culture with personal investment (David, 2003). Leading visions and missions are key components of strategic leadership.

Values

Core values are the principles that define and guide an organization’s beliefs, behaviors, and interactions. They are the basis of its culture and decision making. Values serve the following purposes: They guide a leader’s vision, mission, strategy formulation, and imple- mentation; set boundaries for members’ expectations; and empower all to serve the high- est interests of shareholders, stakeholders, and society, as well as the organization. Take the online personal values assessment (https://www.valuescentre.com/our-products /products-individuals/personal-values-assessment-pva) to identify your own main values, which can also serve as a basis to see if yours match those of an organization in which you work, or choose to work. Ethical values, in particular, have been recognized as among the most important for leadership and organizations (Barrett, 2006). As noted in Chapter 2, integrity is the foundation of leaders’ credibility and one of the organization’s most valu- able assets—its reputation. Such values as honesty, truthfulness, respect, fair treatment, and concern for others serve as the basis for an organization’s social contract with its stock- holders and stakeholders. In addition, values help attract and retain the best talent in an organization (Bhattacharya, Sen, Sankar, & Korschun, 2008); serve to differentiate an orga- nization’s marketing brand (Maignan & Ferrell, 2001); and help manage economic, politi- cal, and social risks of organizations—for example, oil spills, labor disputes, and natural disasters (Kytle & Ruggie, 2005).

Lockheed Martin’s value statements are “Do what’s right,” “Respect others,” and “Perform with excellence” (“Corporate Vision,” n.d.). Essentially, the company stresses that its employees be committed to the highest standards in all of their conduct, act with honesty and integrity in all transactions, respect the company’s diversity, and strive to excel in all aspects of their business.

iStock Editorial/Thinkstock

Facebook’s original mission statement was “Facebook helps you connect and share with the people in your life,” but it now has a broader focus: “to give people the power to share and make the world more open and connected.”

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Section 9.4 Strategy Implementation

Strong core values have become increasingly important in today’s business environment, particularly as unearthed corporate scandals leave destruction in their wake. After Enron’s accounting practices bankrupted the company, a survey of over 800 MBAs from 11 highly ranked North American and European schools found that a substantial number were will- ing to give up 14% of their expected income to be hired by an organization that had a better reputation for corporate social responsibility and ethics (LaPlante, 2004). A pre-Enron study on this same topic—before 2002—found that 94% of MBAs were willing to give up an aver- age of only 12% of their income to be hired by an ethically and socially responsible company (LaPlante, 2004). There is also a renewed interest in business-ethics curriculums at univer- sities after the 2006 housing crisis, which resulted in part from relaxed lending practices that pushed low-income borrowers into adjustable-rate mortgages they did not understand. The subsequent missed payments and resulting foreclosures, as interest rates rose and house values dropped, contributed to the United States’ tailspin into recession. A business-ethics course is now required in many MBA and graduate business master’s degree programs that include specializations in taxation, finance, and other fields.

9.4 Strategy Implementation Strategy implementation are the activities performed based on a plan that guide overall goal obtain- ment. There are different levels of strategy in organizations, as stated earlier. Depending on the level of strategy in a business organization, the scale and scope of strategy implementation varies. A corporate level strategy, for example, involves the top-level executive and leadership team since that strategy involves the entire organization. A business level strategy could also involve differ- ent divisions and business units in implementation, depending on how broad the strategy is. For example, if it is a marketing strategy that involves several new products, then different divisions could be involved. For smaller companies with one product, fewer people may be involved—such as marketing, sales, and technical support. A functional level strategy usually involves leaders and employees in that function—sales, marketing, production. Again, strategy implementa- tion involvement in organizations depends on who is involved and affected in and outside the organization.

Once the strategy has been created—based on established and articulated vision, mission, and core values—leaders and organizations can look to implementing that strategy. One of the biggest challenges facing leaders today is the speed of change. It is tempting to react to new situations without planning first (Matherne, 2004). However, unthinking action can contrib- ute to long-term mistakes due to poor management of resources, unethical behavior, or flawed implementation (Nutt, 2004). Leaders must create projections, analyze the market, and incor- porate personal experience before making a decision (Strange & Mumford, 2005); this need for thought and patience is part of what makes implementation of a leading strategy so challenging.

A leader must consider multiple factors when making decisions. Among these are how much effort the strategy requires versus how much impact it has: Leaders regularly decide to pur- sue certain options and either disregard or delay others by weighing cost against payoff. A strategy that has a high impact and takes a lot of effort, represented in the upper left box in Figure 9.2, may well be worth executing. However, a strategy that takes a lot of effort and has low impact (lower left box) is questionable. Some critics have asked whether the U.S. military and political strategy in Iraq and even in Afghanistan fits this profile. A strategy that has both low effort and low impact (lower right box) may be helpful for a small business, because it

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Effort

High Low

High 1. High Effort, High Impact

Impact may be worth the effort.

2. High Effort, Low Impact

These are not worth pursuing. Too great a cost for minimal results.

3. Low Effort, High Impact

Ideal place to begin with a potentially big payoff for low effort.

4. Low Effort, Low Impact

Good for small, positive changes. Boosts morale through a series of small successes.

Low

Impact

Section 9.4 Strategy Implementation

iStock Editorial/Thinkstock

Amazon is among the companies that have turned to high- impact, high-effort strategies, for example, experimenting with drone delivery.

could boost morale and pave the way for more small successes. A strategy that has low effort and high impact (upper right box) is ideal, and hopefully can be repeated.

Amazon is among the companies that have turned to high-impact, high-effort strategies. Jeff Bezos, CEO at Amazon, told 60 Minutes in a recent interview, “I know this looks like science fiction. It’s not.” He was referring to Amazon’s test-model “octocopters,” Amazon Prime Air’s vision of using robot drones even though regulatory and technical hurdles await this strategy (Diamond, 2015).

Once a plan is established, it requires deliberate and con- sistent execution (Allio, 2005). However, this does not fall on a leader’s shoulders alone. Employees also should under- stand both what the goals are and how the steps they take will lead to the desired out- come (Boswell, Bingham, & Colvin, 2006). Leaders can set the stage by articulating what the overarching vision is, how

Effort

High Low

High 1. High Effort, High Impact

Impact may be worth the effort.

2. High Effort, Low Impact

These are not worth pursuing. Too great a cost for minimal results.

3. Low Effort, High Impact

Ideal place to begin with a potentially big payoff for low effort.

4. Low Effort, Low Impact

Good for small, positive changes. Boosts morale through a series of small successes.

Low

Impact

Figure 9.2: Leadership strategy implementation

Source: Adapted from Amir Harman, A & Sifonis, J. with John Kador, J. (2000). Net ready strategies for the new e-conomy, 95. New York, NY: McGraw-Hill.

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Section 9.4 Strategy Implementation

immediate goals pave the way toward it, and how employees are helping meet those objec- tives (Boswell et al., 2006). See “Take the Lead: Strategic Leadership: Creating Vision, Mission, and Strategy.”

Take the Lead Strategic Leadership: Creating Vision, Mission, and Strategy

You’ve just been named the leader of a project for your organization that will introduce a new service offering. Although your service is focused on the core business of accounting, your organization has determined that a virtual application will allow them to far exceed their geographic locations currently operating. You envision a website offering the same quality level of service, but leveraging Internet-based technology such as email, chat, web meetings, and so on.

Your challenge in running this operation successfully is that while there can be overlap in organization core competencies that are present (technical accounting skills), there is a need to bring in a new skill set, as well as mind-set, when it comes to delivering best-in-class service. Therefore, although you won’t have to reinvent the wheel, you will have to advance on ground not covered thus far by the organization.

With regard to strategic leadership specifically creating a vision, mission, and strategy, how would you answer the following:

1. What challenges will you face in identifying your vision? 2. Is the creation of vision and mission enough to align the new organization? 3. What implementation challenges can you anticipate with your strategy?

See the Appendix for possible answers.

Leadership literature provides several methods to consider the question of strategy imple- mentation. We will examine two: the 7-S model and Bolman and Deal’s four frames of reference.

The 7-S Model: An Integrating Strategic Framework

The 7-S model offers a classic, widely used way of assessing whether an organization is meet- ing its vision and mission. Developed by two McKinsey and Company consultants, Tom Peters and Robert Waterman, this model posits that an organization has seven interdependent com- ponents that must be aligned in order to fulfill its strategic potential: strategy, structure, sys- tems, shared values (culture), skills, staff, and style. At Disney, for example, Iger used his more aggressive and adaptive style of leadership to bring the company’s structure and systems in line with his strategy of building on the Disney legacy and regaining its former glory. He has continued to emphasize the Disney shared values of providing innovative, quality products, services, and environments where people can be happy while experiencing community, and brought on the staff with skills to match. Disney’s top-level team and employees through- out the world are selected on their ability. Disney has over 140 position titles that relate to

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Section 9.4 Strategy Implementation

“imagineering”—the art of creating and designing new things. Illustrators, architects, engi- neers, lighting designers, show writers, and graphic designers are all considered imagineers who do imagineering in such areas as entertainment centers, theme parks, cruise ships, and other new projects at all levels (Wright, 2005).

The 7-S model can be used as both an assessment tool and a way of maintaining alignment through any organizational change, whether large or small. It is also used as a framework for identifying unintended consequences by revealing disconnects among the dependent com- ponents. The seven factors are divided into “hard” and “soft” elements. The hard elements comprise more easily definable characteristics that can be managed; the soft elements are just as important, but are more invisible.

1. Strategy is the organization’s goals and direction. What is the organization trying to achieve? What is the plan for moving from point A to point B? Strategy encompasses everything from maintaining competitiveness to determining how to allocate limited resources. In previous chapters, we discussed companies like Nike, Microsoft®, and Apple, which require competitive, externally focused strategies to meet external, changing customer demands, whereas firms like Zappos, while also competitively oriented, also require a clanlike strategy that shows concern for and sensitivity to customers’ needs.

2. Structure represents the hierarchy, roles, and division of responsibilities. It defines reporting structures within the organization, whether it is a top-down or decentral- ized model. Smaller companies in more stable, external environments can operate with simple team-oriented, functional structures (i.e., functions or departments like production, research and development, human resources, finance, and sales) that may adequately meet the customer-service needs. Larger companies like Disney, on the other hand, that operate in turbulent, changing international and local environ- ments usually require vertical hierarchies (i.e., top-down reporting systems that flex through the use of franchises, teams, and other integrative leader and manager styles), teams, and horizontal structures where different groups have more auton- omy to make decisions.

3. Systems are policies and procedures for exchanging information and completing work. This includes protocols for how departments communicate as well as systems for hiring, accounting, and evaluation. All organizations, large and small, require dif- ferent systems (e.g., human resources, information technology, and accounting) to deal with all the details, data, and business processes necessary to maintain organiza- tional operations. The larger the organization and its operations, the more sophisti- cated and complex the systems are. Speed, availability, accuracy, control, coordination, and privacy of information are also very important elements of systems to meet the vision, mission, and strategy of organizations.

The soft elements are less simple to measure and articulate but they are just as important to the overall success of the organization. These factors relate more to organizational culture.

4. Shared values form the center of the 7-S model and are also known as core values. They represent the ideal standards of an organization’s culture both internally in how employees relate to each other and externally in relationships with clients, as well as representing the underlying beliefs and attitudes. (Recall from Chapter 3 the different types of cultures—clan, achievement, bureaucracy, and adaptive.)

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Section 9.4 Strategy Implementation

5. Skills are the actual competencies and skills of leaders, managers, and employees. They encompass an organization’s collective expertise. Different types of talent are needed to meet certain types of strategies—for example, achievement-oriented strategies and cultures (discussed in Chapter 3) require follower skills that are aggressive and get the work done, whereas clan strategies and cultures require follower skills that show concern for customers and each other. Ideally, followers would be able to access all of these different skill orientations.

6. Staff are the specialists. They can include employees and their demographics, for example, legal, human resources, ethics officers, and others in the organization, including division of employees across departments.

7. Style is the way the organization is led. The leader, whether the president or CEO, has a particular way of managing the organization, which also contributes to corporate culture. As discussed in previous chapters, some leaders have more of a people- oriented, considerate style, others a production-oriented style, and some lead to effec- tively address most contingencies (i.e., different situations and environments) that an organization faces.

The leadership challenge involves selecting a strategy to address external market demands. Then the leader must develop shared values and a culture that equips and empowers the right talent and skills to meet those demands, as Iger did at Disney. The 7-S model can be applied to a wide range of situations, from planning a corporate merger to modifying a reporting struc- ture to rebranding an organization. Although leaders may consider structures, systems, strat- egies, and staff prior to a merger and map out organization charts and protocols, creating a sense of shared values and developing a leadership style that speaks to each organization are crucial to success, especially if the two organizations have different cultures and management styles. In this case, strategic leaders may conduct an internal rebranding process to develop a new set of common values and a style to fit the joint organization, so that all employees feel as though they’re part of an improved, shared organization.

Leadership challenges also arise in acquisitions, when a large, highly structured corpora- tion purchases a start-up with almost no structure and a different management style. How can leaders from both organizations ease the transition? With the 7-S model, leaders can see a map of their organization’s current state and create a model of where they would like to be, and then plan and execute the transition. Although this model does not provide direct answers or solutions for organizational change, it encourages leaders to ask questions and think systemically so that they create and implement robust strategies.

Four Frames of Reference

Leaders usually see the world, other people, and their organizations through a particular frame of reference: a perspective, mind-set and set of assumptions through which people interpret everything and everybody around them. In this case, leaders have a frame of refer- ence that influences their strategic thinking and determines how they make decisions. Bol- man and Deal (1991) proposed that there are four frames of reference: structural, human resource, political, and symbolic. Understanding an underlying frame of reference can also help an employee navigate the organization, and it provides the leader with an abstract way to view a complex system. Take Assessment 9.3 to see which of the four frames of reference best describes your orientation and why. Leaders, managers, and followers who have equally

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Section 9.4 Strategy Implementation

high scores in all these frames of reference can flexibly move in and out of different situations that call for parts of each of the four frames.

Assessment 9.3: Your Leadership Frame of Reference

Instructions

This questionnaire asks you to describe yourself as a leader. For each of the following items, score the phrase that best describes you with a 4, the item that is next best with a 3, and on down to 1 for the item that is least like you.

1. My strongest skills are:

___ a. Analytical skills

___ b. Inter- personal skills

___ c. Political skills

___ d. Flair for drama

2. The best way to describe me is:

___ a. Technical expert

___ b. Good listener

___ c. Skilled negotiator

___ d. Inspi- rational leader

3. What has helped me the most in being successful is my ability to:

___ a. Make good decisions

___ b. Coach and develop people

___ c. Build strong alli- ances and a power base

___ d. Inspire and excite others

4. What people are most likely to notice about me is my:

___ a. Attention to detail

___ b. Concern for people

___ c. Ability to succeed in the face of conflict and opposition

___ d. Charisma

5. My most impor- tant leadership trait is:

___ a. Clear, logi- cal thinking

___ b. Caring and support for others

___ c. Toughness and aggres- siveness

___ d. Imagina- tion and creativity

6. I am best described as:

___ a. An analyst ___ b. A humanist

___ c. A politician ___ d. A visionary

Scoring and Interpretation

Compute your scores as follows:

For the structural frame, add up the scores you gave choice A in each item: ____.

For the human-resource frame, add up the scores you gave choice B in each item: ____.

For the political frame, add up the scores you gave choice C in each item: ____.

For the symbolic frame, add up the scores you gave choice D in each item: ____.

Your answers reveal your preference among four distinct leader orientations or frames of reference. The higher your score, the greater your preference. A low score may mean a blind spot. The structural frame of reference views the organization as a machine that operates with efficiency to be successful. The human-resource frame of reference views the

(continued)

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Section 9.4 Strategy Implementation

Assessment 9.3: Your Leadership Frame of Reference (continued)

organization primarily as people and treats people like family to succeed. The political frame of reference views the organization as a competition for resources that needs to build alliances to succeed. The symbolic frame of reference views the organization as a system of shared meaning and values, and aims to succeed by shaping the culture.

Do you view politics in a positive or negative light? Most new leaders succeed first by using either or both of the structural or human-resource orientations. New leaders often have a blind spot about politics. As managers move up the hierarchy, they learn to be more political or they miss out on key decisions. The symbolic view usually comes last in a leader’s development. Compare your scores to other students’ and see which orientations are more widely held. Source: © 1988, Lee G. Bolman and Terrence E. Deal. All rights reserved. This survey is based on ideas in Bolman and Deal’s Reframing Organizations: Artistry, Choice and Leadership (San Francisco: Jossey-Bass, 2013).

A structural frame focuses on systems. Roles are clearly defined, and it is easy to understand how one can move upward from one position to the next. A leader who uses a structural frame values procedures and processes in the organization, and would likely feel comfortable leading a bureaucratic-type culture (discussed in Chapter 3). Former IBM CEO Lou Gerstner is famous for restructuring a disorganized mass of competitive departments into a single, streamlined system (DiCarlo, 2002). He reorganized IBM (through layoffs and a methodi- cal management system) in such a way that the firm’s major businesses, departments, and groups shared information, decisions, and knowledge. He most likely would score high on the structural frame.

A human-resources frame emphasizes people and their development. Instead of focusing on how an individual might fit a role or a system, a leader with this frame of reference values trying to grow an orga- nization organically through the employees and their capabilities. Employees may be groomed for future managerial positions, and individual expertise is important. Tony Hsieh at Zappos and Adobe presi- dent and CEO Shantanu Narayen use an HR frame to build and grow their businesses. Narayen structure is building the company around the abilities of his staff: “Challenging individuals by setting goals and then letting them use their ingenuity to accomplish them is something that I hope I can pass on as part of my leadership style. If you set a common vision and then get really scary-smart people, they do things that amaze you” (“Shantanu Narayen,” 2015; Bry- ant, 2009). This frame of reference may correlate to a person’s feeling a fit with what is usually a clan type of organizational culture (see Chapter 3). Clan cul- tures in general value open, friendly environments

Justin Sullivan/Getty Images News/Thinkstock

Adobe president and CEO Shantanu Narayen use a human-resources frame to build and grow his business.

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Summary & Resources

where leaders are considered mentors and group loyalty and tradition are strong. A long- term perspective emphasizes the importance of cohesive teams, participation, and consen- sual decision making. Clan cultures can also be highly focused and results driven, but not at the expense of the human element. Poor performers in highly effective and focused clan cultures may not be tolerated.

A political frame is needed because people are different from and often in competition with each other. Leading and managing among diverse stakeholders with differing stakes and agendas requires political skills, as we discuss in Chapter 11. All astute leaders must be able to skillfully use a political lens while being authentic, ethical. Not an easy task as many profes- sional politicians fail at this task each year. Some people might view politics in Washington, DC through this type of frame, considering the representatives from the 50 states to be in competition over a scarce resource, federal funding. Competition and debate are intended to lead to a balanced outcome so that a single, powerful person does not leave with all of the resources. Rather, individuals must negotiate and distribute funding. Some leaders view their organizations similarly, with different teams or departments competing for resources, each having to justify and negotiate to reach its goals. This is one method of keeping an organiza- tion innovative and competitive.

A symbolic frame focuses on vision. Here the leader is a role model who exemplifies the organization’s ideals and guides employees toward a shared goal. This frame depends to a certain extent on performance, with the leader embodying core values for followers. Most U.S. presidents as well as other nation’s presidents must use a symbolic frame to motivate followers. As discussed in Chapter 6, charismatic leaders in particular use symbolic actions and language to inspire followers to accept their visions. Former Avon President Andrea Jung learned to use a symbolic frame as she helped transform that company from a cosmet- ics company to “‘The Company for Women,’ an organization that enabled its sales reps to achieve economic self-sufficiency” (George, 2007). Jung wanted to “elevate women in the community and create commerce that can better their families’ lives” (George, 2007). Cur- rently several leaders, such as Marissa Mayer at Yahoo®, Meg Whitman at Hewlett-Packard, and Denise Morrison at Campbell Soup Company, use a symbolic frame to complement their other influencing roles to influence followers and stakeholders.

A leader may naturally see an organization through a particular frame of reference, but a strong, effective, and adaptive leader can switch and move across and within frames to respond to different organizational environments, cultures, and follower styles. Leaders need to be flexible and resilient in most of today’s organizations. Leading visions, missions, and strategies of organizations require a wide range of political skills, power sources, and use of different frames of references and styles.

Summary & Resources

Chapter Summary Leading strategy involves leadership as persons, processes, and systems (see Figure 1.1). As per- sons, style counts. Walt Disney and his successors have shown that visionary leaders who can also execute are important if an organization is to sustain its business. Founders and leaders who can also create and build organizations around value capabilities and combinations embedded in creative and realistic visions, missions, and values set the tone and content for success.

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Summary & Resources

Knowing the answer to the question, “What is the Theory of Your Organization?” addresses these foundational ideas on which strategies are designed and executed. Because top-level leaders and their teams identify corporate or enterprise level strategies for their entire orga- nizations, they have more complex roles to play in the process.

In this chapter we discussed five primary roles contemporary leaders play in identifying and formulating strategies to compete in a globalizing, hypercompetitive, digitally connected world: The architect, the mobilizer, the visionary, the surveyor, and the fund manager. Some- times one leader cannot play all of these roles successfully; that’s why leadership teams are required. We also referred you to Chapter 1 and the competing values framework to review those leadership roles that also are important for identifying strategies that match the orga- nization’s environment. Those major leadership strategic roles included innovator, mentor, monitor, and producer. Leaders must also use processes in the roles they adopt to create and implement strategies. With this in mind, we introduced four strategic frames of reference related to roles that leaders use to create, implement, and sustain strategies. Those frames are structural, human resource, political, and symbolic.

Vision, mission, and values were discussed as these are also the bases from which strategies are formed. The 7-S framework also helps a leader envision how a strategy combines with other critical dimensions of an organization: the strategy, structure, systems, shared values, skills, staff, and style. Before the implementation stage of strategy execution, the framework that asks the leader to gauge the amount of effort with the level of impact of the intended strategy was presented. Certainly understanding that a strategy requires tremendous effort and cost to reach low impact may well not be worth pursuing. As you review your results on the assessments and evaluate your strengths and developmental areas in strategy develop- ment and execution, it would also be helpful to look back for patterns among the other assess- ments you have taken in previous chapters. You may begin to see more clearly what skills and capacities you need to develop as a strategic leader.

Web Resources

Vision: Writing a Personal Vision Statement

http://www.mentoringgroup.com/personalv2.html A helpful resource to guide your vision statement.

Create Your Own Mission Statement

http://www.carrollk12.org/Assets/file/MVH/Resources/Portfolio%20- %20Mission%20Statement.pdf This exercise can help you articulate your own mission statement.

Core Values

https://www.valuescentre.com/our-products/products-individuals/personal-values- assessment-pva This online personal values assessment helps you identify your own main values, which can also serve as a basis to see if yours match those of an organization in which you work, or choose to work.

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http://www.mentoringgroup.com/personalv2.html

http://www.carrollk12.org/Assets/file/MVH/Resources/Portfolio%20-%20Mission%20Statement.pdf

https://www.valuescentre.com/our-products/products-individuals/personal-values-assessment-pva

Summary & Resources

Critical Thinking Questions

1. What differences do you believe a leader would have in creating and implementing a corporate strategy versus a functional strategy?

2. Research two organizations in different industries and copy out their vision, mission, and values statements. Compare these statements and explain reasons you observe for their similarities and differences. Which organization or company, if you had to choose only one, would you prefer to work for and why?

3. Argue this statement, “All organizations do not really follow their formal strategies, so why even have them?” (Use the text to back up your arguement.)

4. Argue why, as the chapter states, having a “theory of the firm” might help realize a more effective vision and strategy? State your reasoning and any evidence to agree or disagree.

5. What type of organization according to your assessment results (personal vision, mission, and values) would best suit you (1) for employment, and (2) to possibly lead now or in the future. Explain, using the text and your assessment results.

6. Describe the type(s) of followers’ frames of reference you believe you could as a leader most effectively and least effectively lead in implementing an organizational strategy? Explain, using your own assessment results and chapter content.

7. Argue this statement, “Implementing an organizational strategy for a large business or company would be easier than creating one.” Support your reasoning with text information as well as your own judgment.

Key Terms

business strategy Maps back to the corpo- rate strategy and determines how an organi- zation should compete in its business(es).

core values The principles that define and guide an organization’s beliefs, behaviors, and interactions.

corporate strategy Determines the direc- tion that the organization is going and the roles that each business unit in the organiza- tion plan in pursuing that direction.

frame of reference A perspective, mind- set, and set of assumptions through which people interpret everything and everybody around them.

functional strategy Overlaps with and extends the business strategy to functional departments like research and development, marketing, sales, manufacturing, human resources, and finance.

human-resources frame Emphasizes people and their development. Instead of focusing on how an individual might fit a role or a system, a leader with this frame of reference values trying to grow an organiza- tion organically through the employees and their capabilities.

mission Defines an organization’s purpose and answers the question “What do we stand for?”

mission statement A statement usually comprised of two parts: core values and core purpose.

political frame A mind-set or frame of reference that values and views competition, negotiation, power exchanges, and debate in decision making.

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Summary & Resources

7-S model An assessment of whether an organization is meeting its vision and mis- sion; the seven internal dimensions that must be aligned are strategy, structure, sys- tems, shared values, skills, staff, and style.

strategic leadership Involves leading with a vision, mission, and values; imagining and anticipating the future, working with others to realize it, and remaining open-minded to changing course as needed.

strategy A comprehensive plan for how an organization will fulfill its purpose and real- ize its vision.

strategy creation Using the organization’s vision and mission as guides for new initia- tives and supporting structures.

strategy implementation Using objectives, policies, initiatives, and supporting struc- tures to translate an organization’s vision and mission into practice.

structural frame A mind-set or frame of reference that values procedures and pro- cesses in an organization as important.

symbolic frame A mind-set or frame of ref- erence that focuses on vision and depends to a certain extent on the leader’s embodying core values for followers.

vision An idealized goal or state that an organization aspires to achieve.

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