The Leader as Visionary

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The Leader as Visionary

• Transitioning Into A Leadership Role

2
Learning Objectives

• What is leadership and how is it different from
  management?
• What traits, skills, behaviors, and styles lead
  to effective leadership?
• Visionary leadership how to develop a
  compelling vision and inspire people to achieve
  it
• Charismatic and transformational leadership.

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The Changing Features of the Contemporary
Organization

• Traditional Firm
• Tall hierarchy
• Formal/standardized
• Independent jobs
• Formal boundaries
• Homogenous
• Domestic focus

• Contemporary Firm
• Flat
• Flexible
• Team-based jobs
• Networked
• Diverse
• Global

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Features of the Contemporary Firm Flat Structure

• Lean fewer layers of management and reduced
  number of employees
• Employees empowered to make decisions
• Why is structure becoming flat?
• Pressures to cut costs and increase productivity
• Middle management role of monitoring now done
  through technology
• Improve quality and accountability

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Features of the Contemporary Firm Flexible
Systems/Policies

• Less sticking with the rules and more
  flexibility to meet customer, stakeholder, and
  employee needs
• More flexibility in employment relationships
• Balance between standardization and customization
• Why? - Informed customers, diverse workforce,
  need to adapt

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Features of the Contemporary Firm
Networked/Team-based

• Greater interdependence and cooperation
• Permeable boundaries frequent movement of
  people and information across units and
  departments
• Team-based job designs
• Networks to collaborate with buyers,
  competitors, and stakeholders rather than
  buffering from them
• Why? To improve processes and outcomes, to
  acquire scarce resources, to improve relationships

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Features of the Contemporary Firm Diverse

• Diversity in the workforce
• Diverse array of career paths
• Part-time, contingent (temp), contract
• Diversity among clients and stakeholders
• Diverse policies and systems
• Why? - To accommodate population diversity,
  multi-cultural society

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Features of the Contemporary Firm Global

• Networks are global outsourcing, off-shoring
• Global competition for customers
• Global competition for resources
• E.g. rising prices of oil because global demand
  is outstripping global supply capability
• Why? - Homogenization of global markets - enabled
  by technology, drop in transportation costs

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The Employment Relationship is Also Changing

• Old Relationship
• Lifetime employment
• Vertical Advancement
• Seniority-based Pay
• Well-defined Jobs
• Independent Work
• Individual Rewards

• New Relationship
• Lifetime employability
• Lateral Advancement
• Merit-based Pay
• Multi-dimensional Jobs
• Inter-dependent Work
• Group Rewards

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Skills in the New Firm
Features Individual Skills Managerial Skills
Networked Teamwork Team Building, Org. Design
Flat Negotiation Motivation
Flexible Multitasking Leadership
Diverse/Global Communication Manage Conflict, Culture, Diversity
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What Is Leadership?

• The ability to direct and influence a group
  toward achievement of goals.
• The ability to create a compelling vision and
  inspire others to accept and achieve it.
• The ability to give purpose, meaning and
  direction to the organization strategic
  leadership. Strategic leaders anticipate and
  visualize the future, think strategically, and
  work with others to create competitive advantage
  for the firm.

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Leaders versus Managers
Managers Leaders
Cope with complexity Shield the firm from externally-driven chaos Use plans, budgets, and structure to control and protect against change Supervise/organize Short-term transactions Appointed from above Cope with change Steer the firm toward externally-driven change Use vision, direction to inspire and motivate people to change Energize/align LT transformation Selected from below
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Trait Theory of Leadership

• Effective leaders have certain personal
  characteristics or traits.
• Personality traits e.g. drive, honesty,
  ambition, motivation to lead,integrity,
  self-confidence
• Intellectual Traits knowledgeable, decisive,
  intelligent, effective communicator, cognitive
  ability
• Problem with this theory leadership is not
  universal, it can be learned

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Behavioral Theory of Leadership

• Effective leaders exhibit two types of behaviors
• Task Behaviors initiating structure
• Get the job done, establish roles, give direction
• Relationship Behaviors consideration
• maintain harmonious work relationships, friendly,
  trustworthy, commands respect, people-oriented
• Problem does not consider the situation same
  behavior may not work always

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Situational Theories of Leadership

• Effective leaders adapt their behaviors (or
  leadership styles) to the situation at hand.
• Situation determines the appropriate style.
• Leader-subordinate relations
• Ability and motivation of subordinates
• Decrease task style/increase relationship style
  as ability/motivation increase.
• Task structure or nature of decision
• Power, credibility and authority of the leader
• Different situations call for different styles.

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Leadership Styles How Leaders Make Decisions
(Vrooms theory)
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Vrooms Guidelines

• To improve decision quality
• Avoid autocratic style if leader lacks info
• Avoid group style if subs do not share goals or
  if they do not have needed information
• Use the group style if leader lacks info
• To improve commitment to decision
• Use group style if commitment is suspect or if
  conflict is likely
• If time is a constraint, use autocratic style

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Leadership Styles How Leaders Provide
Direction/Support (Path-Goal)

• Effective leaders help subs achieve goals by
  providing direction and/or support. 4 styles
• Directive clarify expectations, guidance
• Supportive show concern for subs needs
• Participative consult subs, use their input
• Achievement-oriented set challenging goals,
  expect high performance
• Style depends on task structure, culture, and
  subs ability and locus of control

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Path-Goal Theory
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Path-Goal Theory Guidelines

• Make the path to the goal easier by providing
  direction and coaching
• Reduce barriers to goal attainment
• Increase opportunities for personal satisfaction
  by giving greater payoffs to people who achieve
  their goals
• Take into account both the cultural environment
  and the personal characteristics of followers

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Emotional Intelligence

• E.I. the ability to manage ourselves and our
  relationships effectively. Four capabilities
• Self-Awareness ability to read our emotions and
  recognize the impact on performance/relationships.
  
• Self-Management ability to control our impulses
  and disruptive emotions, to adapt, to be ethical,
  to seize the initiative, to be an achiever
• Social Awareness ability to empathize, to meet
  others needs, to read and navigate office
  politics
• Social Skills ability to take charge, influence,
  listen, develop others, communicate, manage
  conflict, build bonds, promote cooperation,
  effect change

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E.I.-based Leadership styles

• Coercive Style Demands immediate compliance
• Good in turnarounds, crises, or with problem
  employees
• Inhibits flexibility, dampens motivation
• Authoritative Style Mobilize people toward a
  vision
• You state overall goal but let people chose the
  means
• Works well when business is adrift but not when
  you are working with experts who are more
  experienced than you
• Affiliative Style Build emotional bonds and
  harmony
• Harmony and bonds more important than tasks and
  goals
• Useful when building team harmony and morale
• Focus on praise lets poor performance go
  uncorrected

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EI leadership styles (cont.)

• Democratic Style Consensus via participation
• Gets buy-in, accountability, new ideas,
  flexibility
• Endless meetings, confused employees
• Pacesetting Style Set high standards
• Leader sets example motivates those who are
  competent others feel overwhelmed/neglected
• Coaching Style Develop people for the future
• Focuses more on development than work/tasks
• Does not work well when people resist change
• Switch between styles as needed

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Charismatic Leadership

• Charismatic leaders
• Have great confidence and conviction in the moral
  righteousness of their beliefs
• Have high expectations of their followers and
  show great confidence in them
• Articulate ideological goals
• Inspire trust, confidence, acceptance, obedience,
  emotional involvement, affection, admiration, and
  higher performance in their followers

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Transformational Leaders Generate Passion by

• Being charismatic
• Providing individualized attention
• Do not treat everyone alike
• Assign challenging work to deserving people
• One-on-one mentoring to develop people
• Being intellectually stimulating
• Arouse awareness of problems by articulating
  opportunities and threats
• Stir the imagination with their insights
• Promote a passion for taking on problems

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Guidelines for Transformational Leaders

• Develop a compelling vision
• Communicate your vision
• Build trust and credibility
• Align people with your vision gain acceptance
  from followers
• Motivate and inspire people to achieve it
• Have a positive self-regard
• Recognize your personal strengths and compensate
  for weaknesses
• Know how to learn from failure

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Vision

• Firms that enjoy long-term success do so by
  preserving their core while making progress
• This rare ability to manage continuity and change
  comes from having a sound vision.
• Vision provides guidance about what core to
  preserve and what future to move toward.
• Unfortunately, firms are not clear on what a
  vision is or how it is developed many have a
  boring, confusing statement that fails to inspire
  employees or stimulate progress.

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What is Vision?

• A vision is an attractive, ideal future that is
  credible yet not readily attainable.
• Reflects high ideals encourage faith/hope
• Has broad appeal
• What a vision does
• Connects what is going on now with what the firms
  aspires to in the future.
• Energizes people and increases commitment
• Gives meaning to work dignity and pride
• Sets a standard of excellence and integrity

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Components of Vision

• Core Ideology a firms character and identity
  what we stand for - the glue that holds a firm
  together when everything else is up for grabs
• Core Values and Core Purpose
• Envisioned Future our hopes and dreams what
  we aspire to become, to achieve, to create what
  the firm will be like in future
• Big, Hairy, Audacious Goals
• Vivid Descriptions

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Core Values

• Handful of timeless, guiding principles by which
  a firm navigates - they reflect internal values
  rather than market needs
• To identify core values, ask what is truly
  central to the firm?
• Would you want to hold them even if they became a
  competitive disadvantage?
• Examples
• Nordstrom service to customer above all else
• HP respect for the individual

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Core Purpose

• The firms fundamental reason for being what
  inspires people to do the firms work go deeper
  than goals, customers, products
• To identify core purpose, ask repeatedly why an
  articulated purpose is important.
• McKinsey 1st management consulting final
  helping corporations be more successful
• Example
• Merck To preserve and improve human life
• Disney To make people happy

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Discovering Core Ideology

• Understand core ideology by looking inside
• Its role is to guide and inspire, not to
  differentiate
• Clear understanding of core ideology makes work
  more meaningful and easier to attract, motivate
  and retain people
• Many firms can have same core ideology the
  extent to which they live up to it is what
  differentiates visionary firms from the rest
• Does not need a formal or fancy statement but
  your people need to share it.

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Big, Hairy, Audacious Goals

• Ambitious plans that rev up the entire firm
• Commitment to a huge, daunting challenge is
  clear and compelling, serves as unifying point of
  effort, and a catalyst for team spirit.
• BHAGs have the following characteristics
• They engage people reach out and grab them
• People get it right away need little
  explanation
• They are long term 10 to 30 year time frame
• Not a sure bet but people believe it can be
  reached with big effort have a clear finish line

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Types of BHAGs

• Four categories of vision-level BHAGs
• Target BHAGs quantitative or qualitative
• Become 125b firm by 2000 (Walmart, 1990)
• Common-enemy BHAGs David v. Goliath
• Crush Adidas (Nike, 1960s)
• Role-model BHAGs
• Become Harvard of the West (Stanford, 1940s)
• Internal-transformation BHAGs
• Become 1 or 2 in every market (GE, 1980s)

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Vivid Descriptions

• A vibrant, engaging, specific description of what
  it will be like to achieve the BHAG.
• Involves translating the vision from words to
  pictures an image that people can carry in
  their heads makes the BHAG tangible.
• Must express emotion, passion, conviction
• Example
• Sony 50 years from now, our brand name will be
  as well known as any in the world

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Creating an Envisioned Future

• Do not confuse core with future
• Identifying core is a discovery process but
  setting the future is a creative process.
• Core purpose is never finished it is like a
  star on the horizon to be chased forever
• BHAG is a mountain to be climbed once you get
  to the top, move on to other BHAGs
• Work backwards from vivid description
• What would we love to see in 20 years? What
  should we look like? If a major magazine were to
  write about us, what will they say?

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Example of Vision Sony (1950s)

• Core Ideology
• Be a creative pioneer, elevate Japanese status
• Core Purpose
• To innovate and apply technology for the benefit
  and pleasure of the general public
• BHAG
• Become known for changing the worldwide
  poor-quality image of Japanese products
• Vivid Description
• Our products will pervade the whole world
• Made in Japan will symbolize quality, not
  shoddiness
• We will succeed where U.S. companies have failed

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Key Points in Vision Building

• You cannot analyze your way to a compelling
  vision instead ask
• Does it get our juices flowing? Does it move us?
• Have a certain level of audacity and a great deal
  of commitment to the dream
• The gulp factor not entirely reasonable
• A crusade bet the company on the goal
• Build firm strength to create the future
• Beware of the Weve Arrived syndrome
• Failure to replace an achieved BHAG Apple

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From Vision to Visionary

• Building a visionary company requires 1 vision
  and 99 alignment
• Leaders must get organizational members to commit
  to the vision
• Sign up and adopt the vision as their own
• Work hard toward its accomplishment
• Aligning people behind the vision requires
• Leader credibility, motivation techniques, public
  commitments, a small-wins strategy, frequent
  communication, and institutionalization

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Develop Credibility

• To be believed, demonstrate honesty and
  integrity, knowledge, passion, enthusiasm
• Behaviors that build and maintain credibility
• Be clear and consistent (not wishy-washy)
• Create positive energy (not cynicism, criticism)
• Begin with commonality, reciprocity, empathy
• Manage disagreement use 2-sided arguments
• Present both sides first, then argue your view
• Encourage and coach
• Share information and ask for feedback

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Motivate

• Apply principles of recreation
• Identify clear goals linked to vision
• Identify progress criteria - self-monitored
• Provide mechanisms for frequent feedback
• Give people personal choice and maximum
  discretion possible
• Maintain stable/consistent rules/expectations
• Set a competitive standard against which to
  evaluate performance

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Ensure Public Commitments

• Have people declare their commitment in public
  open pronouncements increase motivation and
  consistency of behavior
• Encourage people to restate the vision themselves
  or come out in favor of it
• Assign individuals to represent the vision to
  outside groups or other employees
• Form discussion groups so others can help refine
  or clarify the vision

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Institute Small-Wins Strategy

• People become committed to change when they see
  progress being made, so identify small wins
  changes that are easy to make and that build
  momentum.
• Find something thats easy to change. Change it.
  Publicize it. Then find another and repeat
  process.
• Minor, quick victories create commitment by
• Reducing the importance of any one change
• Reducing demands on any group or person
• Improving the confidence of participants
• Limiting organized resistance or retaliation
• Creating a bandwagon effect
• Limiting risk of harm that could come from a big
  flop

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Communicate Vision Frequently

• Articulate and rearticulate the vision
  continually, consistently, and in many ways
• Refer to it in public statements, newsletters,
  ceremonies, speeches, daily interactions.
• Leaders must also model the vision in their
  personal behavior and actions
• Remember - you get commitment to that which you
  say, that which you do, and that which you reward

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Institutionalize the Vision

• Create irreversible momentum by
• Making every employee an advocate of the vision
  one who converts others to it
• Embedding it in the firms human capital people
  throughout the firm must be capable of fulfilling
  the vision, creating change, and carrying on
  under their own initiative.
• Establish metrics (indicators of success),
  measures (methods to assess success), and
  milestones (benchmark to identify progress)