Chapter 16 Flashcards
Leadership
Leadership is the process of influencing an organisation (or group within an organisation) in its efforts towards achieving an aim or goal.
What are the key roles for top managers?
Envisioning future strategy: Effective leaders at the top of an organisation need to ensure there exists a compelling vision of the future, communicated clearly to both internal and external stakeholders. Without a clear and compelling vision, large organisations risk incoherence.
Aligning the organisation to deliver strategy: Ensure that people are committed to the strategy, make the changes needed and that they are empowered to deliver those changes.
Embodying change: A strategic leader will be seen by internal and external stakeholders as intimately associated with a strategic change programme. He is then symbolically highly significant in the change process and needs to be a role model for future strategy.
What does middle managers leadership roles includes?
Champions of strategic issues: Can have better insights into operations and must often sell strategic issues to top management, getting their buy-in in order to push strategy forward.
Sense makers of strategy: Top management may set a strategic, but how it is explained and made sense of in specific contexts may effectively be left to middle managers. They are a *crucial relevance bridge *between top management and members of the organisation at lower levels.
Adapters to unfolding events : Middle managers are uniquely qualified to reinterpret and adjust strategy because they have day-to-day responsibility for implementation at a local or departmental level.
Entrepreneurial leaders
Opportunity spotters: Have to be outward looking and forward-looking, seeing the opportunities.
Resource marshallers Have to marshall for resources
Risk takers Prepared to take risks
Transformational vs Transactional leaders
Transformational leaders emphasises ´soft levers´ for change such as building a vision for their organisation. Transformational leaders are often highly charismatic individuals (i.e., personally inspiring). Typically, they emphasise soft measures (soft implementation). This approach is beneficial for peoples motivation and job performance when organisations face uncertainty.
Transactional leaders emphasise hard levers of change such as designing systems and controls. The emphasis here is more likely to be on changes of structures, setting targets to be achieved, financial incentives, careful project management and the monitoring of organisational and individual performance. Divestments and cutbacks may feature strongly. More common in established organisations.
Leaders often combine the two, spectrum.
Situational leadership
Situational leadership encourages strategic leaderes to adjust their leadership style to the context they face.
The change kaleidoscope
Another framework for assessing the change context:
The change kaleidoscope highlights how contextual features can take various forms supporting or resisting change.
The Time available for change can differ.
The Scope of change might differ in terms of either the breadth of change across an organisation or the depth of cultural change required. For example, a global business with multiple brands is likely to require a high breadth of change, while an established organisation with a long cultural history is likely to demand depth of change.
Preservation of some aspects of an organisation may be needed, some capabilities may be needed for the change, while others can simply be abandoned. Some established parts may be retained in order to generate revenues before the new parts have been established.
Diversity in experience, different views and opinions can help create change and a emergent type of development.
Capacity for change in time and resources.
Power is crucial.
Capability
Readiness, is there a felt need for change across the organisation, widespread resistance or pockets of resistance in som parts of the organisation.
Different contexts:
- Limited managerial capabilities and low readiness might encourage a transactional style of leadership.
- If capability is high but readiness low then persuasion will be more necessary.
Forcefield analysis
A framework for assessing the change context.
Forcefield analysis compares the forces at work in an organisation acting either to block or facilitate change. Forcefield analysis involves identifying those forces that favour change, those that oppose it and those that are neutral. Depending of which forces are the strongest, a decision between more transformational or transactional leadership focus can be made.
Turnaround strategy
Turnaround strategies emphasise rapidity in change, cost reduction and/or revenue generation, with the aim of fast recovery.
Includes five key elements:
Crisis stabilisation: Requires an immediate focus on cost reduction or increase in revenue. Danger in cutting R&D, might be used as discretionary earnings management.
Management changes: New chairman or chief executive.
Gaining stakeholder support: In a crisis, stakeholders are liable to lose confidence in the future viability of the organisation. To keep their support it is important that they are kept clearly informed.
Clarifying the target markets and core products: Central to turnaround strategies is ensuring clarity on the target market or market segments most likely to generate cash and grow profit.
Financial restructuring might be needed.
Organisational ambidextrity
Organisational ambidexterity is the capacity both to exploit existing capabilities and to explore for new capabilities.
Organisations typically need to exploit the capabilities they have built up over time in order to achieve immediate performance goals. However, exploitation alone tends to allow only incremental change, since strategy is being built on existing strenghts. In fast moving environments organisations need also to invest in exploration in order to innovate and build new capabilities.
Structural ambidextrity: Organisations maintain the main core of the business devoted to exploitation with tighter control and careful planning but creates separate units or temporary, perhaps project-based, teams of exploration. These exploratory units will be smaller in size, less tightly controlled with more emphasis on learning and processes to encourage new ideas.
Diversity rather than conformity: Maintaining a diversity of views within the organisation can help promote ambidextrity.
The role of leadership: Leaders need to encourage and value different views and potentially contradictory behaviours rather than demanding uniformity.
Tight and loose systems: Needs to be a balance of both tight and loose systems in order to support both exploitation and exploration.
Levers for strategic change
1.Creating a compelling case for change: Establishing a sense of urgency.
2. Challenging the taken for granted: The organisational paradigm, i.e. the taken for granted assumptions and behaviours of organisational members may impede strategic change. Therefore it is important to challenge this paradigm.
3.* Challenging the operational processes and routines*: “it is easier to act your way into a better way of thinking than to think your way into a better way of acting” - Richard Pascale.
4. Symbolic management : Change levers might be symbolic, changing symbols might help reshape beliefs and expectations. Rituals through rites of passage (training programs) can help reshape environment. Changes in physical aspects of the work environment can play a significant role. Behaviours of managers particularly of strategic leaders. Language used.
5. Power and political systems Strategic change can be a political process. To effect change, support may be required from individuals or groups or a reconfiguration of power structures may be necessary, especially if transformational change is required. Analysing power and interest through stakeholder mapping might therefore be useful to identify bases of alliance and likely resistance.
6. Timing, choosing the precise time to launch strategic change. Building on actual or perceived crisis + windows of opportunity.
7. Visible short-term wins demonstration of such wins may increase commitment to the wider strategy.
There are many levers of change available, which levers are most appropriate depends on the type of change being sought and the context in which it is being carried out.
Political approaches are associated with a more transactional leadership style and are more likely to work in unreceptive contexts seeking limited types of change.
Symbolic management and transformational leadership styles are particularly important when seeking broad change in receptive contexts.
Problems with formal change
Death by planning
Organisational exhaustion
Behavioural compliance, organisation members comply superficially without buying into it.
Misreading scrutiny and resistance as only negatives can be positive and a way for employees to engage.
Informal changes
Are always happening, emergent process. Employees continually adapt and learn in response to changing conditions on the ground. Implication is that top-down planned change programmes can actually get in the way of the local informal adaptations that are more effective because they are closer to market needs. Strategic change can bubble up from the bottom of the organisation. In this view management job is to encourage and multiply successful local adaptations not just impose change from the top.
Resilience
Resilience refers to the capacity of organisations to recover from shocks fast and easily after they have happened. Can be increased by building financial reserves or creating buffer stocks in vulnerable supply chains. Since Global Financial Crisis of 2008, international banks have been obliged by regulators to increase their resilience to unexpected financial crises by building up their financial reserves. Cultural resilience or decentralised structures can also build up resilience.
