Executive Leadership

Scenarios & Strategy

Executive Leadership

Scenarios & Strategy

Patricia Riley, Zhan Li

Sandi Evans, Elisiheve Weiss & Jackie Selby

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AgendaAgenda

1. Objectives1. Objectives

2. Introductions2. Introductions

3. Leadership3. Leadership

4. Strategy 4. Strategy

5. Scenarios & Story5. Scenarios & Story

6. Next steps6. Next steps

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PhilosophyPhilosophy

• Some information will be new and some will be well understood

• Attempting to create a “pool of shared knowledge” for the institute and beyond

• Goal is to make the information actionable at the enterprise level as well as in your own units

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Objectives of This SessionObjectives of This Session• Enhancing transformational and organizational

leadership• How conversations about the future improve strategic

thinking for the enterprise• Developing your analytical skills

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New Approaches to LeadershipNew Approaches to Leadership

• Transformational leadership• Cascading leadership• Leadership as an organizational trait• Thought leadership and strategy at the

enterprise level

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Leadership is Not What You Think

• Direct vs. indirect• Networked and

shared• Institutional capacity• Enabling systems

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May the Best Story Win!

• Teachable POV• The “Vision Thing”

• Think outside the box• The space pen

• Competing stories• Management of

attention• Continuous partial

attention problem

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Transformational LeadershipTransformational Leadership

“Unlike the transactional leader who indicates how current needs of followers can be fulfilled, the transformational leader simply arouses or alters the strength of needs which may have lain dormant ... It is leadership that is transformational that can bring about the big differences in groups, organizations, and societies.”

Bass

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Transformational LeadersTransformational Leaders

• Creative– Innovative, foresighted,

not afraid of failure

• Interactive– Powerful communicators

through images, models and metaphors

• Visionary– Communicate concise

and compelling visions

• Empowering– Gives the power to make

decisions and act on those decisions to followers

• Passionate– Love the work they do and

passionately committed to the people and organization

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Cascading LeadershipCascading Leadership

• Strong leaders at the top empower other leaders down the line– Depends on

continuing support – Requires excellent

communication

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Leadership as an Organizational Trait Leadership as an Organizational Trait

• Leadership is distributed throughout the organization– Not personality dependent

• Rooted in the culture of the organization– Employees act more like entrepreneurs than hired

hands– Embedded in systems and procedures—is

measured and rewarded• There is a common philosophy and language

of leadership that paradoxically includes tolerance for contrary views and a willingness to experiment

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Global Leadership Study*

• Methodology

– Thought-leader panels

– Focus, dialogue groups

– In-depth interviews– Surveys of the

next generation of corporate leaders,

• Emerging Trends– Thinking globally– Developing

technical savvy– Developing the

organization and sharing leadership

– Appreciating cultural diversity

*Goldsmith et al., 2006

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Are we learning as fast as the world is

changing?

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The Future Has a Short Shelf LifeThe Future Has a Short Shelf Life

• Disruptive technologies

• Speed of global change

• Generational differences

• Niche markets

Where are the inflection points?

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The Strategy StoryThe Strategy Story• Strategy formulation took off in the 60s and 70s

– Advanced computerized statistical models and forecasting tools were developed

• By the 90s strategy was much maligned as a concept– Many argued it was not worth the time because the

environment changes too rapidly– Some organizations were paralyzed by their strategies and

unable to change course

• After the dot-com bubble burst, however, many companies learned that knowing what their core strategy was and operating according to those principles was the best way to gain competitive advantage

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Strategy BasicsStrategy Basics• It is about choice

– What to do, what not to do to achieve the vision• A strategy can be formulated at three different levels

– Corporate/enterprise—• Reach—has to do with types of businesses and how they will be

integrated and maintained• Competitive contact—defining where in the corporation

competition is to be localized• Managing activities and business interrelationships—synergies,

joint investments• Management practices—governed centrally or more or less

autonomous government– Business unit

• Positioning the business against rivals• Assessing and adjusting to changes in demand and

technologies• Vertical or horizontal integration• Lobbying

– Functional• Business processes and the value chain

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Competitive AdvantageCompetitive Advantage

• Three major approaches– Cost leadership– Differentiation

• Creativity• Market niches

– Focus

• To deal with rivalries– Threat of substitutes

• Switching costs• Buyer inclination

– Buying power• Volume• Brand identity

– Barriers to entry• Access to distribution

– Supplier power• Volume

– Degree of rivalry• Exit barriers• Industry concentration

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Strategy ImplementationStrategy ImplementationOnly 10% of

organizations execute their strategy

Vision Barrier

Only 5% of the workforce understands the strategy

People Barrier

Only 25% of managers have incentives linked to strategy

Management Barrier

85% of executive teams spend less than one hr per mth. discussing strategy

Resource Barrier

60% of organizations don’t link budgets to strategy

Barriers to strategy execution

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Strategic LeadershipStrategic Leadership

USC Center for Organizational Effectiveness

Remember:Strategic thinking and planning is

the process of deciding the optimal alignment between unlimited needs and limited resources to achieve your priorities.

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New Business VentureNew Business Venture

• Identify market– Competitive landscape

• Financial metrics and issues– e.g., Possible revenues and likely costs

• Options– Evaluating different paths through scenario

planning– Risks?

• Formulate strategy• Next steps

– Specific and actionable– Timetable

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Scenario PlanningScenario Planning

Scenario planning is a discipline for rediscovering the original entrepreneurial power of creative foresight in contexts of accelerated change, greater complexity, and genuine uncertainty.

—Pierre Wack, Royal Dutch/Shell

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Scenario ProcessScenario Process• Step 1—Uncovering the decision

– Related to mission, e.g., “where is the industry going?”

– Find key factors in the business system that would influence the success or failure of the decision

• Step 2—Information-hunting and –gathering– Science and technology developments– Perception-shaping events– Fringe ideas that spread

• Step 3—Identifying the driving forces of a scenario (organizations normally have little control over these)– Government regulations– Social forces– Environmental developments

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Scenario Process continuedScenario Process continued

• Step 4—Uncover the predetermined elements (will happen independent of the scenario)– Demographics– “Pipeline” effects

• Step 5—Identify critical uncertainties– Two or three factors that are most important and

most uncertain– e.g., education funding, strength of USD

• Step 6—Compose scenarios– Like a script—has a plot line– Narrow down ideas to 2-3 stories

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Scenario AnalysisScenario Analysis

• Step 7—Analysis of the implications of the decisions according to the scenarios– Is the strategy more robust in one scenario

versus the other?– What vulnerabilities have been revealed?

• Step 8—Selection of leading indicators– Monitor to see which scenario is unfolding

or whether an unforeseen path is emerging (e.g., societal response to 9/11)

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ScenariosScenarios

• Stories• Plausible• 5- 20 years out• The key is the conversation

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Scenario ExerciseScenario Exercise

• Few talked about own organizations– When they do they say good things!

• Scattered future

• Non-profits scenarios are not much based on technology

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Effective LeadersEffective Leaders

GoodStory

Good PeopleRight ToolsProcesses

Communication

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A Good Story Needs Good Communication

A Good Story Needs Good Communication

• Communicating in a “Confidentiality Culture”

• Communicating across functions

• Creating organizational alignment

• The enterprise view– Creating real

organizational synergies through improved communication and collaboration

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When you have a real

innovation, don’t compromise!

Peter Drucker

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Performance: Balanced ScorecardPerformance: Balanced Scorecard

• Be sure to measure – Financial and creative performance– Performance for the customer– The performance of internal business

processes– Learning and growth

• Typically you don’t get what you don’t measure

Adapted from Niven, 2002.

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“You can’t depend on your eyes if your

imagination is out of focus.”

Mark Twain