Ch.16 Leadership and Strategic Change Flashcards
What is leadership?
Leadership is the process of influencing an organisation (or a subgroup within) to achieve certain goals. Effective leadership ensures clarity of purpose and motivation to execute strategies.
Leadership is intrinsically tied to strategic change, as highlighted by John Kotter’s differentiation between “good management” (maintaining consistency) and leadership (coping with change).
What are the three Strategic leadership roles?
Top managers, Middle managers, Entrepreneurial leaders
What are the three aspects of Top managers leadership?
- Envisioning Future Strategy: Leaders need to communicate a compelling vision of the future. (Clearly
communicated to both internal and external stakeholders. No clear vision → risk incoherence) - Aligning the Organization to deliver that strategy: Ensuring alignment and empowerment for change.
- Embodying Change: Leaders symbolize change and should act as role models.
What are the three aspects of Middle managers leadership?
- Champions of Strategic Issues: They bridge the gap between top management and the ground realities.
- ‘Sense Makers’ of Strategy: They provide context to top management’s strategic direction.
- Adapters to Unfolding Events: They adjust and reinterpret strategy based on day-to-day situations.
What are the three aspects of Entrepreneurial leaders?
- Opportunity Spotters: They identify potential opportunities.
- Resource Marshallers: They gather necessary resources from the ground up.
- Risk Takers: Entrepreneurs face higher risks than established organizations.
Describe the two leadership styles. Is there a third option?
Transformational (or charismatic) Leaders:
Focus on “soft” levers for change like building a vision.
Often charismatic, emphasizing mission and energizing the team.
This approach is to leadership beneficial for people’s motivation and performance
Transactional Leaders:
Emphasize “hard” change levers, including designing systems and controls.
Change of structures, setting targets, financial incentives. Careful monitoring of performance.
Divestments and cutbacks may be featured strongly.
More common in established organizations.
Transformational and transactional leadership are on a spectrum. Leaders often blend elements of both.
Situational leadership: suggests adjusting leadership style based on the context. Daniel Ek spotify had to
change
What are two tools to help analyze the change context?
Forcefield analysis & The change kaleidoscope
Describe Forcefield analysis.
A forcefield analysis compares forces that either hinder or facilitate change within an organization. It also helps in identifying the balance between pro-change and anti-change forces and those more or less neutral.
Forces could be impersonal factors like organisational incentive systems, financial resources or competitive threats. Can also involve people ex middle managers working as facilitators of as blockers of change.
Key Aspects:
Determine what blocks change and how to overcome them. Ex, more training could reduce the blocking effect of employee skills.
Identify what supports change and how to boost these supporting factors. Ex, increased investment in new technologies might facilitate change.
Introduce or develop new forces to aid change, drawing insights from frameworks like the McKinsey 7S (Ch
15).
Describe the Change Kaleidoscope.
Change Kaleidoscope Assesses the change context by highlighting various factors that can either support or resist
change.
Features of the Change Kaleidoscope:
Time: Duration available to bring about the change.
Scope: Extent of change required, both in terms of breadth and depth.
Preservation: Some aspects of the organization might need to be retained during the change.
Diversity: A variety of experiences and viewpoints can aid or hamper change.
Capacity: Resources available for the change. Change can be costly both financially and in management time.
Power: Ability to initiate and control the change process.
Capability: Organizational expertise in managing change.
Readiness: The organization’s overall willingness to embrace change.
The change kaleidoscope: What are the implications on leadership styles?
Factors like capabilities and readiness can dictate the type of leadership style needed during change.
Depending on the factors, leadership styles can range from transactional to transformational.
It’s crucial for change leaders to recognize which factors are most pertinent in a given scenario and make necessary trade-offs.
Describe the styles of change leadership according to capability and readiness.
Persuasion, Collaboration (transformational), Direction (transactional), Coaching
What are the two primary forms of strategic transformation?
Incremental and Transformational change.
Incremental change builds on existing strategy with a great deal of continuity: change comes in small increments. Increments can include the acquisition of related businesses (Ch 12) or reorganisation of business units (Ch 15).
Transformational change involves (discontinuity with the existing strategy and is deeper and more pervasive) a deeper shift from current strategies. Transformations: ex, fundamental changes in the business model (Ch 8) or the organisational culture (Ch 7).
Transformational change not necessarily exclusively associated with transformational leadership style.
Transformational change may require some mix of transformational and transactional leadership.
Transformational change: What are the two important forms of transformation?
Digital Transformation: Pervasive and discontinuous change triggered and shaped by the Widespread use of
digital technologies, leading to broader organizational shifts (ex orgs overall boundaries, routines and
organisational culture).
Sustainability Transformation: Change focusing on positive economic, social, and environmental impacts. Is
pervasive and discontinuous change of organisational business models, capabilities and operations aimed at
creating positive social and environmental impact.
Describe Turnaround strategies. What are the five key elements?
Turnaround strategies emphasizes rapid change, aiming for quick recovery through cost reduction or revenue generation.
5 key elements of turnaround strategies are:
- Crisis Stabilisation: Control over deteriorating situations with an emphasis on cost reduction and/or revenue increase. There are dangers of cutting long-term investments in R&D, training or brand-building, with negative implications for long-term future of the org.
- Management Changes: Replacing or modifying leadership, especially at the top.
- Gaining Stakeholder Support: Keeping stakeholders informed to retain their trust.
- Clarifying Target Markets and core products: Understanding and focusing on key market segments for revenue generation.
- Financial Restructuring: Revamping the financial structure, reducing debt, and ensuring resilience against future crises.
What is ambidexterity?
Organisations do not always have to choose between incremental and transformational change, or rapid and slower change. Orgs can combine various forms of change at the same time.
Organisational ambidexterity is the capacity both to exploit existing capabilities and to explore for new capabilities.
Describe Organisational ambidexterity. What are the four approaches to handling ambidexterity?
Organisational ambidexterity is the ability of organizations to balance and combine different forms of change. It
consists of:
Handling contradictory pressures of being focused yet flexible.
Approaches to handle ambidexterity:
Exploiting current capabilities while exploring new ones.
- Structural Ambidexterity: Separate units or teams for exploration and exploitation.
- Diversity rather than conformity: Maintaining diverse views and experiences within the organization. Can help promote abidexterity.
- Role of Leadership: Encouraging diverse views and being open to experiments, and potentially contradictory
behaviours rather than demanding uniformity, but also need to have the authority to stop experiments that are
not worthwhile - “faili fast” philosophy. - Tight and Loose Systems: Balancing structured strategies with open systems for innovation, all while maintaining coherence in the organization’s mission. All above shows that there needs to be a balance
between tight systems of strategy development that can exploit existing capabilities and looser systems that encourage new ideas and experimentation. Can be given coherence from org mission or culture that allows diff units to express the orgs overall purpose in diff ways.
What are Levers for strategic change? Name some of Kotter’s eight steps for change.
Having identified both the type of change required and the receptiveness of the context - change leaders must choose between the various levers (or means) for change.
Successful change initiatives often employ multiple levers. Levers can be applied simultaneously or in sequence, such as in Kotter’s Eight Steps for Change.
Strategic change typically adopts a top-down approach. What are the three main limitations to this approach?
- Issues inherent to the process, 2. underestimating informal change, and 3. the
occasional necessity for resilience.
The problems of formal change: What are the four common problems?
Death by Planning: Overemphasis on planning can lead to “analysis paralysis,” where actual implementation is delayed.
Organisational Exhaustion: Change is often not a one-off process, might take ongoing series of initiatives.
Continuous change initiatives can lead to change fatigue among employees and managers.
Behavioural Compliance: Employees might only superficially comply with changes, without internalizing the new changes.
Misreading Scrutiny and Resistance: Resistance and scrutiny are often seen as negative but can be vital for
engagement and uncovering legitimate issues.
Describe the issue of Underestimating informal change.
Informal, spontaneous changes are constantly occurring and are often overlooked by management.
Such changes are inherent and can be more effective as they are closer to market needs.
The role of management should be to encourage and amplify successful local adaptations, rather than solely imposing top-down strategies.
Describe the Need for resilience.
Resilience is the capacity of organizations to recover quickly from shocks, such as economic crises, natural
disasters, or sudden policy changes. Recover from unwanted change.
Building financial reserves, creating buffer stocks, adopting decentralized structures, and fostering loyal organizational cultures can enhance strategic resilience.
Investing in resilience is costly; therefore, a balance needs to be struck in determining the appropriate structures and systems.
