1. Strategic Leadership and Managing Crises and Change
Chapter 11
Strategic Leadership and Managing Crises and Change
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

2. Summary of Lecture 18 and 19 Max Weber on charismatic leadership.
Argument for and against the locus of charismatic leadership.
How one can acquire charismatic qualities.
Socialized VS personalized charismatic leaders.
Charismatic VS transformational leadership.
Phases of the transformation process.
Transformational VS Transactional leadership
Stewardship and servant leadership
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

3. Learning Objectives Role of leadership in strategic management process
Relevance of internal and external environment
Importance of a vision and mission statement
Relationship between corporate objectives and strategies
Importance of strategy evaluation
Risk Assessment Process
Crises Leadership and Management
In Next Lecture
- Crises Leadership and Management
- Need for Change
- Phases of the change process
- Major reasons for resisting change
- People and task-oriented techniques for
overcoming resistance to change
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning 3

4. Strategic Leadership Success is not by chance depend on decisions
made by strategic leaders
Leader is responsible to analyze company
Environment
“Strategic leadership is a person's ability to
anticipate, envision, maintain, flexibility, think
strategically, and work with others to initiate
changes that will create a viable future for the
organization”
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

5. STRATEGIC MANAGEMENT
Strategic leader can be from top, middle and front line
Top managers are responsible for company success and
failure
Strategic management is 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 organizational goals
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

6. STRATEGIC LEADERSHIP
The process of providing the direction and inspiration necessary to create and implement a vision, mission, and strategies to achieve and sustain organizational objectives
The purpose of strategic leadership is to effectively implement and guide the process of strategic management
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

7. Strategic Leaders
Strategic leaders choose appropriate strategy, create
effective and supportive team, identify and focus on
potential markets and customers, sustain competitive
advantage, maintain ethical standards, and have
excellent customers relationships
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

8. Strategic Leaders Strategic leaders perform following responsibilities
1 Conceptualize organization vision, mission and core values
2 Assist to formulate objectives, strategies, policies and structures that translate vision and mission into business decisions
3 create culture and communication structure to facilitate organizational learning and coordination among employees and customers
4 Act as a leader and role model for others
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

9. Strategic Leaders
Strategic decisions at time destroy company because they are made on only judgment
Executive intuition at time bring innovation or may cause blunders
Strategic Management Process
1) Strategy Formulation
2) Strategy Implementation
3) Strategy Evaluation
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

10. The Strategic Leadership/ Management Process
Analyze the environment
Internal (Strengths and Weaknesses)
External (Opportunities and threats)
Strategic flexibility: In order to survive manage environment
Know customers, market trends, competitors, suppliers, economic condition, technological advances and government policies
Strategic fit
Environmental changes are uncertain, strategic leaders must rely on intuition and rational analysis
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

11. Strategic Management Before starting strategic planning think of
1) Who are we (core ideology)?
2) Why do we exist (core purpose)?
3) What do we believe in (core values)?
4) What inspires us (envisioned vision)?
5) Where we want to go (vision statement)?
6) What future look like when we go there (vivid description)
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

12. Strategic Management Develop a strategic vision
An ambitious view of the future that everyone in the organization can believe in, that is reasonably attainable, and which offers a future that is better in important ways than what now exists
Strategic Vision answers
What does organization aspire?
What Strategic Vision do?
- Facilitate decision making
- Inspires
- Link past, present and future
- Give meaning to work (what and why people do it?)
- Establishes standard of excellence
Microsoft: “ A personal computer on every desk in every home”
American Express: “To be the world's most respected service brand”
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

13. Strategic Management Strategic Mission
What is the organization's purpose?
What business we are in?
Two main components: core values and core purpose
Identifies scope of organization operations in service/product and market terms
“Mission statement is an enduring statement of purpose that distinguishes one organization from other similar organization”
3M: “To solve unsolved problems innovatively”
Merck: “To preserve and improve human life”
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

14. Strategic Management Analyze the mission statements and identify
Zenith: making television sets
Analyze the mission statements and identify
What's Wrong
Motorola: applying technology to benefit the public
The March of Dimes : To Cure Polio
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

15. The Strategic Leadership/ Management Process
Write a meaningful mission statement
Defines the core purpose and reasons for organizational existence
Should be both broad and precise
Not easy
Can take months and years
Must change as organization changes
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

16. The Strategic Leadership/ Management Process
Create Corporate Level Objectives
Desired outcomes that an organization seeks to achieve for stakeholders
Include both financial (return on investment, sales, profits) and strategic objectives (new customers, market, or product types)
Help everyone to focus in same direction
Targets against which performance is compared
Encourage broader participation
Link rewards to goal achievement
Help to evaluate performance and strategy
Set priorities
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

17. The Strategic Leadership/ Management Process
Develop SMART Corporate Level Objectives
Specific
Measurable
Achievable
Relevant
Time bound
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

18. The Strategic Leadership/ Management Process
Formulate Strategy
Strategy is the general plan of action that describes resource allocation and other activities for exploiting environmental opportunities and helping the organization attain its goals
Means to end (How)
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

19. The Strategic Leadership/ Management Process
Formulate Strategy that:
Enhances value to customers
Ratio of benefits to cost
Creates synergistic opportunities
Whole is greater than the sum of the parts (2+2=5)
Builds on company core competencies
Performs extremely well in comparison to competitors
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

20. 5 Elements of Good Strategy Development
Arena: Where the organization will focus its resources
Vehicles: How the organization will get there
Differentiators: How the organization will stand out in the market place
Staging: What will be the speed and sequence of moves
Economic logic: How the organization will obtain its returns
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

21. The Strategic Leadership/ Implementation
Most difficult part of strategic management
- Also the most important
- Action Plan
Without appropriate implementation, the best
of strategies can fail
Must be integrated and coordinated
Must overcome resistance to change
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

22. The Strategic Leadership/ Implementation
Effective leader require to execute strategy
Decisions regarding structure, culture, reward, budget allocation, rules and policies must match requirements of chosen strategy
Mismatch: Differentiation through innovation within hierarchical and bureaucratic structure
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

23. Strategy Evaluation -Review internal and external factors
To determine the effectiveness of strategic choices
Fundamental activities:
-Review internal and external factors
Measure performance against objectives
Take Corrective action
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

24. Crisis Leadership
Leaders need skills and competence to lead during crises
To provide stability, reassurance, confidence, and a sense of control
“…tough times won’t create leaders, … they show you what kind of leaders you already have.” Larry Barton
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

25. Crises
What is Crises
Sudden change or incident that disrupt operations
or put threats to company survival and reputation
Natural disaster
Product failure
Human errors (accidents)
System failure
unexpected death of CEO (Owner)
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

26. Preparing for Crisis
We cannot foresee future crises, but we can prepare in a general manner
Pre-Crisis Planning
Do not want to start from zero when crisis occurs
Crisis Team
Good mix of organizational skill sets (include members from all departments, select calm and strong nerves employees)
Crisis Leader duties
Requires logs
Monitors complaints and behaviors
Identifies patterns or trends
Coordinates team activities
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

27. Risk Assessment Used to anticipate crises
What could happen?
Tries to identify weaknesses and threats
Where are we vulnerable?
Identify potential incidents
Common tool in crisis planning
What is the worst-case scenario?
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

28. Risk Assessment Model Risk Identification (Risk Chart) S W O T 2
Risk Assessment & Ranking 1 S W O T 3
Risk Reduction Strategies 4
Crisis Prevention Simulations 5
Crisis Management
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

29. Discussion Questions
Discussion Question 1: List key elements of strategic management process?
Question 2: Elaborate difference between mission and objectives?
Discussion Question 3: How strategic leadership contribute towards achieving organization strategy and objectives?
Discussion Question 4: Describe role of leader in crises?

30. Summary Role of leadership in strategic management process
Relevance of internal and external environment
Importance of a vision and mission statement
Relationship between corporate objectives and strategies
Importance of strategy evaluation
Risk Assessment Process
Crises Leadership and Management
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning 30