STRATEGIC LEADERSHIP

Hugh D. ShermanSeptember 6, 2008

Brazilian Executive Seminar

What is Your Definition of Critical Leadership Skills?

New Competitive Environment

Major Trends in the Environment? 1. Shift in Economic Power Among Nations2. Sustainability as an Opportunity3. Others?

New Competitive Environment

How has management changed to adjust?1. Work Contract2. Structure: decentralization &

empowerment3. External market measures

LEADERSHIP CONTINUUM

Strategic Leader

Transactional - Manager

Laissez-faire

Inspirational motivation –broad vision

Contingent rewards –negotiated

Absence of leadership

Coaching, encouragement

Management by exception

Little contact with employees

Assist individuals to obtain goals development

Individuals as asset to organization

Little concern

NEW LEADERSHIP THEORIES

• The new theories focus on charismatic, transformational, and visionary leadership.

• These theories emphasize the interpersonal processes between leader and followers.

Ireland & Hitt (1999) AME

LEADERSHIP IN DIFFUSE POWER STRUCTURES

• Legislative leadership skill• Relies more on persuasion, political currency

and shared interests• “ Make sure the right decisions happen – for

the long term greatness of the institution and the achievement of its mission” - Collins

STRATEGIC LEADERSHIP

Definition - Ability to anticipate, envision, maintain flexibility and empower others to create strategic change

Long term competitiveness -Need to respond quickly & appropriately to environmental change

Requires continually changing set of assumptions and accepted wisdom as to how industry operates

Ireland & Hitt (1999) AME

STRATEGIC LEADERSHIP TASKS

• Develop Strategic Vision• Core Competence• Develop Human Capital • Effective Organizational Culture• Balanced Control Systems• Ethical Practices

Creation of High Performance Organization:

1. Strategic Vision2. Culture3. Development of People

1. STRATEGIC VISION• Definition - a concept for a new and desirable

future reality• Provides an identity, shared values• Collins & Porras study of long term

performers (Book -Built to Last)

Strategic Vision - Purpose

• Based in Charismatic Research• Similar to mission, aim, target in that it

provides direction and focus• But focus is future opportunities, represents

a change in strategy• Taps people’s energy and emotion

STRATEGIC VISION• Peter Senge (Fifth Discipline) -One of the

most powerful forces is a shared vision. • Shared visions derive their power from a

common caring. People have a desire to be connected to an important undertaking.

STRATEGIC VISION - EXAMPLES

• NASA • Ben & Jerry’s Ice cream• Johnson & Johnson

STRATEGIC VISION - PITFALLS

Need to build consensus & obtain commitment versus compliance (Gertsner – “if people do not buy the logic the change will not stick”)

Takes time & patience - Not a one-shot deal

2. Organizational Culture

• Definition: shared ideology, core values which determines the way things get done

• Gertsner – “culture is isn’t just one aspect of the game – it is the game”

Organizational Culture

• High performing organizations create cultures around their strategic vision.

• Strategic leaders must sincerely believe and continuously practice the stated values. The executives must be careful to lead by example.

3. Development of People

• No job is more important than finding & developing great leaders

• “Have to have the right people on the bus..in the right seats” Collins in Good to Great

• The right people can adjust to change and develop other people

Development of People

Talented managers want:• Exciting challenges• Associated with an organization that is

making a difference• Open, trusting, performance oriented

culture

People

• Disney’s Michael Eisner “Our real product is managing talent. That is what we do here, and we never lose sight of that, because without it what do we have?

• Jack Welch - my whole job is picking and providing opportunities to the right people.

Where have all the leaders gone?

Past: Professional schools teach rational manager approach.

Only effective when world was more stable

Today: Leaders need to:•Visualize the future •Motivate, inspire employees •Ensure that the organization is adapting to changing needs

The best organizations are those that offer us the opportunity to attain meaning and fulfillment in our work.

That have a passion for making a difference.

NEW STYLE OF LEADERSHIP

Lead with purpose, meaning and values Build enduring relationships with people Authentic (definition: genuine, worthy of

trust, reliance or belief)

Man in the Arena – T. Roosevelt

"It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat."