1 discussion 13 creating vision and strategic direction
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Discussion 13Discussion 13
Creating Vision and Strategic Creating Vision and Strategic DirectionDirection
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“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.”
Jack Welch
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Strategic LeadershipStrategic Leadership
The ability to anticipate and envision the future, maintain flexibility, think strategically, and initiate changes that will create a competitive advantage for the organization in the future
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Ex. 13.1Ex. 13.1 The Domain of Strategic The Domain of Strategic LeadershipLeadership
Architecture for alignment and implementation
Strategy
Mission
Vision
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VisionVision
An attractive, ideal future that is credible yet not readily available
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Ex. 13.2Ex. 13.2 Examples of Brief Vision Examples of Brief Vision Statements Statements (selected)(selected)
Motorola– Become the premier company in the world
Ritz-Carlton (Amelia Island) Engineering Dept.– Where no hotel has gone before – free of all defects
Johnson Controls Inc.– Continually exceed our customers’ increasing expectations
New York City Transit– No graffiti
Egon Zehnder– Be the worldwide leader in executive search
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Ex. 13.3Ex. 13.3 The Nature The Nature of the Visionof the Vision
Current reality
Staying the course
Mov
ing
tow
ard
a de
sire
d
futu
re
Vision
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What Vision DoesWhat Vision Does
• Links the present to the future
• Energizes people and gains commitment
• Gives meaning to work
• Establishes a standard of excellence and integrity
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Common Themes of VisionCommon Themes of Vision
• Vision has broad appeal• Vision deals with change• Vision encourages faith and hope• Vision reflects high ideals• Vision defines the destination and the journey
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VisionVision
• Works at multiple levels
• Must be inspirational at all levels
• Encourages independent action
• Self-reference
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MissionMission
The organization’s core broad purpose and reason for existence
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MissionMission
• Two critical parts:– Core values guide the organization– Core purpose is why the organization exists
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Leader’s Framework for Noble Leader’s Framework for Noble PurposePurpose
Purpose Description Basis for Action
Discovery Finding the new Pioneer
Excellence Being the best Fulfillment
Altruism Providing service Happiness
Heroism Being effective Achievement
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Strategic ManagementStrategic Management
Strategic Management– The set of decisions and actions used to formulate
and implement specific strategies that will achieve a competitively superior fit between the organization and its environment so as to achieve organization goals
Strategy– The general plan of action that describes resource
allocation and other activities for dealing with the environment and helping the organization attain its goals
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Develop Strategies Focusing OnDevelop Strategies Focusing On
• Core competence
• Developing synergy
• Creating value for customers
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Core CompetenceCore Competence
Something the organization does extremely well in comparison to competitors
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Synergy and ValueSynergy and Value
Synergy: the interaction of organizational parts to produce a joint effect that is greater than the sum of the parts
Value: the combination of benefits received and costs paid by the customer
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Strategy Formulation and Strategy Formulation and ImplementationImplementation
Strategy Formulation– The integrating knowledge of the environment, vision,
and mission with the core competence in such a way as to achieve synergy and create customer value
Strategy Implementation– Putting strategy into action by adjusting various parts
of the organization and directing resources to accomplish strategic goals
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Ex. 13.7Ex. 13.7 Making Strategic Decisions Making Strategic DecisionsEase of Implementation
Hard Easy
Strategic Impact
High
Low
High Impact, Hard to Implement.Major changes, but with potential for high payoff
High Impact, Easy to Implement.Simple changes that have high strategic impact – take action here first
Low Impact, Hard to Implement.Difficult changes with little or no potential for payoff – avoid this category
Low Impact, Easy to Implement.Incremental improvements, “small wins;” pursue for symbolic value of success
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Ex. 13.8Ex. 13.8 Linking Strategic Vision and Linking Strategic Vision and Strategic ActionStrategic Action
The Dreamer The Effective Leader
The Uninvolved The Doer
Action
Low HighLow
High
Vision
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SWOTSWOT
• Strengths
• Weaknesses
• Opportunities
• Threats
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Porter’s 5 Competitive SourcesPorter’s 5 Competitive Sources
• Potential new entrants
• Bargaining power of buyers
• Bargaining power of suppliers
• The threat of substitutes
• Rivalry among competitors