1 Discussion 13 Creating Vision and Strategic Direction

2 “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.” Jack Welch

3 Chapter Objectives Explain the relationship among vision, mission, strategy, and implementation mechanisms. Create your personal leadership vision. Use the common themes of powerful visions in your life and work. Describe four basic approaches for framing a noble purpose that followers can believe in. Understand how leaders formulate and implement strategy. Apply the elements of effective strategy.

4 Strategic 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

5 Ex The Domain of Strategic Leadership Architecture for alignment and implementation Strategy Mission Vision

6 Vision An attractive, ideal future that is credible yet not readily available

7 Ex Examples of Brief Vision Statements (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

8 Ex The Nature of the Vision Current reality Staying the course Moving toward a desired future Vision

9 What Vision Does Links the present to the future Energizes people and gains commitment Gives meaning to work Establishes a standard of excellence and integrity

10 Common 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

11 Vision Works at multiple levels Must be inspirational at all levels Encourages independent action Self-reference

12 Mission The organization’s core broad purpose and reason for existence

13 Mission Two critical parts: –Core values guide the organization –Core purpose is why the organization exists

14 Leader’s Framework for Noble Purpose Purpose Description Basis for Action Discovery Finding the new Pioneer Excellence Being the best Fulfillment Altruism Providing service Happiness Heroism Being effective Achievement

15 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

16 Develop Strategies Focusing On Core competence Developing synergy Creating value for customers

17 Core Competence Something the organization does extremely well in comparison to competitors

18 Synergy 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

19 Strategy Formulation and Implementation 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

20 Ex Making Strategic Decisions Ease of Implementation HardEasy 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

21 Ex Linking Strategic Vision and Strategic Action The DreamerThe Effective Leader The UninvolvedThe Doer Action Low High Low High Vision

22 SWOT Strengths Weaknesses Opportunities Threats

23 Porter’s 5 Competitive Sources Potential new entrants Bargaining power of buyers Bargaining power of suppliers The threat of substitutes Rivalry among competitors