Competing For Advantage

1. Competing For Advantage Part I – Strategic Thinking Chapter 2 – Strategic Leadership

2. Effective Leadership Style Think about the characteristics of the leadership style of well-known CEOs are mentioned in the text, or in the business world. Who do you think has the most effective leadership style and why? What characteristics do these leaders possess?

3. Inspiring Others The Language of Leadership

4. Language of Leadership • The Message Appeal - What’s said • Expressive Communication - How it’s said • The Setting - Where it’s said • The Messenger Credibility - Who says it

5. Language of Leadership • The Message Appeal - What’s said • Expressive Communication - How it’s said • The Setting - Where it’s said • The Messenger Credibility - Who says it

6. Key Components • Rhetorical Crafting – Use of symbolic language to give emotional power to the message • Framing – Defining the purpose of the organization in a meaningful way

7. Rhetorical Crafting • Metaphors & Analogies • Sun Tzu – Moral law, Heaven, Earth • Harrison Ford is like one of those sports cars that advertise acceleration from 0 to 60 m.p.h. in three or four seconds. He can go from slightly broody inaction to ferocious reaction in approximately the same time span. And he handles the tight turns and corkscrew twists of a suspense story without losing his balance or leaving skid marks on the film. But maybe the best and most interesting thing about him is that he doesn't look particularly sleek, quick, or powerful; until something or somebody causes him to gun his engine, he projects the seemly aura of the family sedan.

8. Rhetorical Crafting • Metaphors & Analogies • Symbols • Organizational Stories • Focus on Audience • Sounds • Repetition • Rhythm • Balance • Alliteration

9. Framing • Amplifying Values – Identification and elevation of values basic to the mission • Belief Amplification – Ideas about which factors support or impede the achievement of those desired values • Mission Importance – why important? • Need for Mission – why arisen? • Antagonist of the Mission – who’s against us? • Efficacy of the Mission – why will we succeed?

10. “This conflict was begun on the timing and terms of others; it will end in a way and at an hour of our choosing.” alliteration, balance, rhythm

11. “Our responsibility to history is already clear: to answer these attacks and rid the world of evil.” values, mission, need, antagonists

12. “Today, we feel what Franklin Roosevelt called, ‘the warm courage of national unity’.'' metaphor, values

13. “They are the names of men and women who began their day at a desk or in an airport, busy with life. They are the names of people who faced death and in their last moments called home to say, Be brave and I love you. They are the names of passengers who defied their murderers and prevented the murder of others on the ground. They are the names of men and women who wore the uniform of the United States and died at their posts. They are the names of rescuers--the ones whom death found running up the stairs and into the fires to help others.” repetition, need, audience

14. “We see our national character in rescuers working past exhaustion, in long lines of blood donors …one man who could have saved himself stayed until the end and at the side of his quadriplegic friend. A beloved priest died giving the last rites to a firefighter. Two office workers, finding a disabled stranger, carried her down 68 floors to safety. A group of men drove through the night from Dallas to Washington to bring skin grafts for burned victims.” amplifying values, beliefs, stories

15. Winston Churchill “ We shall not flag nor fail. We shall go on to the end. We shall fight in France and on the seas and oceans; we shall fight with growing confidence and growing strength in the air. We shall defend our island whatever the cost may be; we shall fight on beaches, landing grounds, in fields, in streets and on the hills. We shall never surrender and even if, which I do not for the moment believe, this island or a large part of it were subjugated and starving, then our empire beyond the seas, armed and guarded by the British Fleet, will carry on the struggle until in God's good time the New World with all its power and might, sets forth to the liberation and rescue of the Old.” efficacy

16. Videos: The Language of Leadership Martin Luther King, Jr. Col. Joshua Chamberlain

17. Martin Luther KingRhetorical Crafting • Metaphors & Analogies • Symbols • Organizational Stories • Focus on Audience • Sounds • Repetition • Rhythm • Balance • Alliteration

18. Col. Joshua ChamberlainFraming • Amplifying Values • Belief Amplification • Mission Importance – why important? • Need for Mission – why arisen? • Antagonist of the Mission – who’s against us? • Efficacy of the Mission – why will we succeed?

19. Individual Strategic Leaders and Influences on Their Decisions • Key Terms • Strategic Leadership – the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary

20. Qualities of Legendary CEOs • Visionary • have a clear view of what they want to accomplish • Transformational • act as agents of change • motivates others to do more • organizational needs above their own

21. Strategic Leadership • Multifunctional • Managerial & Influential • Change tolerant • Uncertainty tolerant • Motivational

22. Skill Hierarchy

23. Level 5 Leaders • Self-confident enough to set up their successors for success • Humble and modest • “Unwavering resolve“ • “Workmanlike diligence - more plow horse than show horse" • Give credit to others for their success and take full responsibility for poor results • “Attribute much of their success to 'good luck' rather than personal greatness"

24. How do these characteristics compare to the list of attributes: • … from Sun Tzu? • … from the beginning of class? • … for those associated with a “typical” entrepreneur

25. Strategic Leadership Style • Directive approach • Collaborative approach • Delegation • Each has its own set of advantages & disadvantages

26. Managerial Discretion and Decision Biases • Discretion – latitude for action or decision making • Hubris – excessive pride, leading to a feeling of invincibility • Heuristics – rules of thumb used in decision making

27. Constraints on Decision Making

28. Decision-Making Biases • Reliance on previously formed beliefs • Focus on limited objectives • Exposure to limited decision alternatives • Insensitivity to outcome probabilities • Illusion of control • Reliance on a limited set of heuristics

29. Hubris • Excessive pride that leads to a feeling of invincibility • Magnifies the effects of decision-making biases

30. Implications for IBP • Be sure you don’t fall prey to decision making biases • Be sure you understand the effects of hubris • Play the role of Devil’s Advocate. • Question decisions constructively. • Other ideas?

31. Top Management Teams • Group composed of the CEO and key managers who are responsible for setting the direction of the firm and formulating and implementing its strategies

32. Factors that Influence the Effectiveness of Top Management Teams • Top management team heterogeneity • The CEO and top management team power • Executive succession processes

33. Heterogeneous Top Management Team • Introduces a variety of perspectives • Has a greater propensity for strong competitive action • Tends to "think outside of the box," leading to more creative decision making, innovation, and strategic change • Offers various areas of expertise to identify environmental opportunities, threats, or the need for change • Promotes debate

34. Heterogeneous Top Management Team Challenges • Cohesion • Communication • Comprehensive examination of threats and opportunities

35. The CEO and Top Management Team Power • CEO Duality - CEO also serves as chair of the board of directors to achieve power relative to the board • Independent Board Leadership Structure –the structure in which the board's ability to monitor top-level managers' decisions and actions (particularly in terms of financial performance) is enhanced by employing two different people to serve as CEO and board chair

36. CEO Duality • Is more common in the United States • Occurs most often in the largest firms • Receives scrutiny from increased shareholder activism • Is criticized for causing poor performance and slow response to change

37. Top Management Power • Members of top management can use their social and business ties with directors • Powerful CEOs can appoint members of the top management team or other sympathetic associates to serve on the board • CEO duality • CEO tenure

38. Executive Succession Processes • Process can be internal or external

39. Benefits of Internal Labor Market • Continuity • Continued commitment • Familiarity • Reduced turnover • Retention of "private knowledge"

40. Benefits of External Labor Market • Since tenure with the same firm is thought to reduce innovation, outsiders can bring • diverse knowledge bases • new social networks • which may offer new synergies and new competitive advantages

41. Effect of CEO Succession and Top Management Team on Strategy

42. Key Strategic Leadership Responsibilities and Actions

43. Acquire, Develop, and Manage Key Resources • Key Terms • Organizational Culture–complex set of ideologies, symbols, and core values that are shared throughout the firm and influence the way business is conducted

44. HR Practices Linked to Strategic Success • Managing intellectual capital • Investing in capital resources • Building effective commitments to organizational goals • Incorporating international experience into the skill sets of employees

45. HR Practices Linked to Strategic Success (cont.) • Employing effective training and development programs to promote strategic vision and cohesion • Establishing effective reward plans • Instituting continuous learning • Leveraging the firm's expanding knowledge base

46. Effective Cultural Qualities • Entrepreneurial opportunism • Employee autonomy • Innovativeness • Risk taking • Proactiveness • Competitive aggressiveness

47. Overcoming Cultural Difficulties • Effective communication • Effective problem solving • Effective staffing • Effective performance appraisals • Effective reward systems

48. Mintzberg’s Managerial Roles

49. Actions for an Ethical Culture • Employ ethical strategic leaders • Establish and communicate specific goals to describe the firm's ethical standards • Continuously revise and update the code of conduct based on stakeholder input • Disseminate the code of conduct to all stakeholders to inform them of ethical standards and practices • Develop and implement methods and procedures to use in achieving the firm's ethical standards • Create and use explicit reward systems to recognize bold acts that demonstrate ethical behavior and decision making • Create a work environment in which all people are treated with dignity

50. What is strategic effectiveness? Consistent, long-term goals and objectives Consistent, long-term goals and objectives