Role of Strategic Leader & What they do Use Power & indluence

67% face to face meeting

13% working alone
7% email, 6% call, 5% business
How CEO spend their days meal, 2% public event

Level 1: Higly capable individual

How you can become a strategic leader Level 2: Contributing team member
Level 3: Competent Manager
2. 1 Strategic Leadership Level 4: Effective Leader
How do you become a strategic leader Level 5: Executive

Strategy Formulation:
concern where and how to compete
Strategy Process Strategy Implementation
concerns how work gets done or strategy execution

Corporate Strategy:
concerns where to compete as
Role of Corporate, Business, Functional to industry, markets, and
geography

Cost Leadership
Business Strategy:
concerns how to compete Differentiation
Strategy Formulation & Implementation
Value Innovation

Functional Strategy:
concerns how to implement a
chosen business strategy

Strategic sucess begins when vision

formulated, vision implemented

An inspiring vision helps employees find

Vision: meaning in their works
- What do we want to
accomplish ultimately? Using the vision as its foundation, a firm will
- A statement about what build the necessary resources and
an organization ultimately capabilities to translate a stretch goal or
To gain and sustain a competitive wants to accomplish; it strategic intent into a reality, usually through
advantage captures the company’s continuous organizational learning, including
2.5 Implications for Strategic Leader aspiration. learning from failure.
all employees should feel invested in and inspired by - A vision begins with the
the firm’s vision and mission Customer Oriented Allow company to adapt to
infinitive form of a verb
: changing environments
(starting with to)
a business in terms of
providing solutions to Made finding a solution much easier
theory of bounded rationality customer needs
When individuals face decisions, their rationality is Identify a critical need but leave
confined by cognitive limitations and the time available open the means of how to meet that
to make a decision. Thus, individuals tend to “satisfice” need
rather than to optimize Type Effectiveness of
Vision Statement To force managers to take a more
cognitive limitations: Constraints such as time or the brain’s myopic view of the competitive
Evaluate the strategic Product Oriented:
inability to process large amounts of data that prevent us from landscape
implications of product- a business in terms
appropriately processing and evaluating each piece of
oriented and of a good or service Focus employees on improving existing
information we encounter
customeroriented vision provided products and services without
System 1: statements consideration of underlying customer
- It is our default mode because it is automatic, fast, problems to be solved
and efficient, requiring little energy or attention
- System 1 is prone to cognitive biases that can lead to
Strategic Leadership: A positive relationship
The visions are customer-oriented
systematic errors in our decision making Managing the Strategy Process 2.2 Vision, Mission, Value
between vision
statements and firm
Internal stakeholders are invested in defining the vision
System 2: performance
- Applies rationality and relies on analytical and logical 2 distinct modes of decision making
Organizational structures such as compensation systems align with
reasoning the firm’s vision statement
-It is an effortful, slow, and deliberate way of thinking
Mission:
illusion of control: A cognitive bias that - How do we accomplish our goals?
highlights people’s tendency to - What an organization does and how it
overestimate their ability to control events. proposes to accomplish its vision
- The mission is often introduced with the
escalating commitment:
preposition by
A cognitive bias in which an individual or a group
faces increasingly negative feedback regarding the Core values statement:
likely Statement of principles to guide Without commitment and involvement from top
outcome from a decision, but nevertheless continues an organization as it works to managers, any statement of values remains merely a
to invest resources and time in that decision, often public relations exercise
achieve its vision and fulfill its
exceeding the earlier commitments 2.4. Strategic Decision Making Value: mission Must be lived with integrity, especially by the top
confirmation bias: What commitments do we make, and what safe guards management team
A cognitive bias in which individuals tend to search do we put in place, to act both legally and ethically as
for and interpret information in a way that Cognitive biases: Obstacles in thinking that we pursue our vision and mission? Provide stability to the strategy, thus
supports their prior beliefs. Regardless of facts lead to systematic errors in our decision laying the groundwork for long-term
and data presented, individuals will stick with their making and interfere with our rational thinking Cognitive Biases & Decision Making success
prior hypothesis 2 Function strong ethical values
As guardrails to keep the company on track
reason by analogy:
A cognitive bias in which individuals use simple
analogies to make sense out of complex problems Top-Down Strategic Planning:
A rational, data-driven strategy process
representativeness: through which top management attempts
A cognitive bias in which conclusions are based on small to program future success
samples, or even from one memorable case or Anecdote
Vision, Mission, Value
Groupthink:
A situation in which opinions coalesce around a leader Analysis External Analyis
without individuals critically evaluating and challenging that Strategic planning
leader’s opinions and assumptions Internal Analysis

devil’s advocacy: Corporate strategy

Technique that can help to improve strategic decision making; a key element is that 3 steps of strategic management
of a separate team or individual carefully scrutinizing a proposed course of action by Formulation Business strategy
questioning and critiquing underlying assumptions and highlighting potential Functional strategy
downsides
Structure, culture & control
dialectic inquiry Implementation
Technique that can help to improve strategic decision making; key element is that How to improve strategic decision making
Corporate Governance & business ethic
two teams each generate a detailed but alternate plan of action (thesis and anti-
thesis). The goal, if feasible, is to achieve a synthesis between the two plans When scenario planning, also
starts with a top-down approach
to the strategy process
Scenario planning:
Strategy planning activity in which top The goal is to create a number of detailed and executable strategic plans
2.3 Strategic Management management envisions different what-if
scenarios to anticipate plausible futures in order Model the scenario-planning approach; (AFI) strategy
to derive strategic responses framework in a continuous feedback loop, where
analysis leads to formulation to implementation and back
to analysi

black swan events:

Incidents that describe highly improbable but high-impact events

Strategy as planned emergence:

Strategy process in which organizational structure and
systems allow bottom-up strategic initiatives to emerge
and be evaluated and coordinated by top management