Content M-6: Leadership and strategic change

Question 1

Which two characteristics define the ability of leaders to navigate their companies through the turbulence and successfully implement strategic change?

Answer 1

• Foresight of technology and market trends
  > Decisions about the direction and manner of change
• Convincing people to be on board for a new strategic direction
  > Mobilization of the organization to implement these decisions

Question 2

What does transformational leadership entail?

Answer 2

• Transformational leadership goes beyond satisfying current needs through reward.
• It is about advancing followers toward achievement and growth.
• It aims at constant improvement at both the personal and organizational levels.

“Going beyond extrinsic rewards and providing people with intrinsic motivation to join the change ffort”

Question 3

What are extrinsic rewards?

Answer 3

A tangible and visible reward given to an individual for achieving something e.g, salary, bonus, public recognition.

Question 4

What is extrinsic motivation?

Answer 4

Incentive to do something for extrinsic rewards

Question 5

What are intrinsic rewards?

Answer 5

An internal (psychological) satisfaction felt by an individual after achieving something e.g. feeling of being valued, successful, or useful.

Question 6

What is intrinsic motivation?

Answer 6

Incentive to do something for intrinsic rewars.

Question 7

What does the use of extrinsic incentives for leadership require? And why is transformational leadership more relevant when an organization is going through a strategic change?

Answer 7

• The ability of the leader to specify and clarify goals
• Considerable knowledge about how those goals can be achieved
• Objective ways of measuring performance
• The ability to allocate rewards based on performance.

During strategic change leaders don’t have these tools due to uncertainties created by the disruption that necessitated strategic change -> cannot rely only on extrinsic rewards to lead -> need to motivation followers intrinsically -> transformational leadership.

Question 8

What do transformational leaders do?

Answer 8

• Articulate an appealing and inspiring vision
• Act as a role model for behavior, ethics, and commitment
• Have high aspirations and expect the same from followers
• Recognize the role of individuals in realizing the shared vision and attend to their concerns.

Question 9

What is self-concept?

Answer 9

Our perceptions about our values, beliefs, behaviors, abilities, and goals.

“What kind of person am I?”

Question 10

To realize their self-concepts people have a natural need to:

Answer 10

• Express themselves
• Find meaning in what they do
• Maintain self-worth, a sense that they are competent and useful
• Develop a social identify, a sense of belonging.

Question 11

Why does strategic change have a possibility to rise threat perceptions for self-concept of members of an organization?

Answer 11

• Their competencies may become irrelevant
• They may need to revise beliefs and value about their work
• Their established social status within the organization may change
  All these are associated with a high degree of uncertainty.

–> To defend their self-concepts people often exhibit resistance to change.

Question 12

How do transformational leaders motivate people?

Answer 12

Transformational leaders motivate people, with their words and actions, bot be a part of the change, rather than to resist it, by aligning the expected efforts for change with people’s self concepts.

Question 13

How to motivate people:

Answer 13

• Increase the intrinsic value of the efforts for change
  > “Your effort itself reflects important values aligned with your self-concept”
• Enhance people’s self-worth
  > “I am confident that you an meet high expectations”
• Increase the intrinsic meaning of accomplishing goals set by the change initiative
  > “Accomplishing change goals means that you realized your self-concept”
• Emphasizing collective effectiveness and the sense of belonging
  > “We are a great group, and we are in this together”

Question 14

Leadership requires the contribution of more than a single individual. Leadership is more than the CEO, it is a collective phenomenon.

Answer 14

TRUE!

Question 15

For an effective change leadership there need to be an alignment (coupling) at three levels. Which three?

Answer 15

• Strategic coupling
  > Alignment between members of the leadership team
  > CEO and middle managers, CEO and COO, co-CEOs etc.
• Organizational coupling
  > Alignment between leaders and their direct followers
  > Divison head and division members
• Environmental coupling
  > Alignment between leadership team and the environment
  > Leaders and customers, suppliers, partners etc.

Question 16

Alignment among leaders, between leaders and organization member, and between leaders and environment are fragile during strategic change due to tensions between organizational aspirations and the demands of the environment. Why?

Answer 16

• Conflicts develop between leaders about how change should take place
• Leaders become detached from their organizations
• Leaders become detached from the environment

Question 17

Challenges of leading change. Is there a solution?

Answer 17

• Seeking alignment in a sequential way rather than simultaneously.
• Other sequences can also be feasible
• The appropriate sequence depends on the contextual factors such as the power disruption among leaders, organizational culture and structure, severity of the decoupling from the environment etc.

Question 18

Conclusion

Answer 18

• Leadership is a collective phenomenon
• Alignments among leaders, between leaders and organization members and between leaders and environment are vital for strategic change
• Leaders motivate people for change by aligning the change efforts with people’s self-concepts.