BU481 - Chapter 2: Strategic Leadership: Managing the Strategy Process

Strategic Leadership

Executives use of power and influence to direct the activities of others when pursuing an organizations goals

Position Power (based on?)

Based on Authority

Informal Power (based on?)

Based on Persuasion

Dogfooding

requirement to use company products and services only

Upper-Echelons Theory

• Organizational outcomes (including strategic choices and performance levels) reflect the value of the top management team

• Results from innate abilities and learning

5 Level Leadership Pyramid

Shows leadership progression:

Level 1: High capable individual

Level 2: Contributing Team Member

Level 3: Competent Manager

Level 4: Effective Leader

Level 5: Executive

Level 1: High capable individual (5 Level Leadership Pyramid)

Makes more productive contributions through motivation, talent, knowledge and skills

Level 2: Contributing Team Member (5 Level Leadership Pyramid)

Uses high level of individual capability to work effectively with others in order to achieve team objectives

Level 3: Competent Manager (5 Level Leadership Pyramid)

Is efficient and effective in organizing resource to accomplish stated goals and objectives

• Does things right

Level 4: Effective Leader (5 Level Leadership Pyramid)

Presents compelling vision and mission to guide groups toward superior performance. Does the right things.

Level 5: Executive (5 Level Leadership Pyramid)

Builds enduring greatness through a combination of willpower and humility

Strategy formulation

Concerns where and how to compete

Strategy Implementation ***

Organization, coordination and integration of how work gets done (execution of strategy)

Corp Strat, Business Strat, Functional Strat (4/16)

Vision

• Captures an organizations purpose and aspiration (what they want to accomplish)

• Motivates employees (helps bring to and find purpose /meaning in work)

• Statement → forward looking and inspiring to achieve goals

Strategic Intent

A stretch goal that pervades the entire organization with a sense of purpose

• Builds competencies

Strategic Commitments

When enterprise undertakes credible actions

Customer-Oriented Vision

How to best solve customers problem

• identify need but not how to meet it (since means of meeting needs may change)

Product-Oriented Vision

Improving product (fail to adapt to changes)

Positive relationship between vision and performance is more likely when:

• Vision is customer-oriented

• Internal stakeholders are invested in defining a purpose-driven vision

• Organizational structures (see compensation systems) align with firms vision

Mission (5/16)