Chapter ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1 Creating Vision and Strategic Direction 13

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2 Your Leadership Challenge Explain the relationship among vision, mission, strategy, and mechanisms for execution. Create your personal leadership vision. Use the common themes of powerful visions in your life and work. ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

3 Your Leadership Challenge (cont.) 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. ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5 Ex The Domain of Strategic Leadership Mechanisms for Execution Strategy Mission Vision Where are we headed? Who are we? How do we get there? What do we do right now?

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6 Vision An attractive, ideal future that is credible yet not readily available

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7 Ex Examples of Brief Vision Statements (selected) Ritz-Carlton (Amelia Island) Engineering Dept. –To boldly go where no hotel has gone before – free of all defects –No graffiti New York City Transit –No graffiti Egon Zehnder –Be the worldwide leader in executive search

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8 Ex The Nature of the Vision Current reality Staying the course Moving toward a desired future Vision

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9 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

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10 Mission The organization’s core broad purpose and reason for existence

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 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

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12 Core Competence Something the organization does extremely well in comparison to competitors

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 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

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14 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 Execution –Putting strategy into action by adjusting various parts of the organization and directing resources to accomplish strategic goals

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15 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

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16 Ex Linking Strategic Vision and Strategic Action The DreamerThe Effective Leader The UninvolvedThe Doer Action Low High Low High Vision