Many cars and mobile phones have built-in GPS systems that will guide you to the restaurant, business, or residence you’re trying to get to. If you take a wrong turn, the unit will reset and report something like “recalculating route.” That’s similar to what leaders do. They look forward and recalculate the route when it is necessary to keep the organization thriving.2 Superior organizational performance is not a matter of luck. It is determined largely by the choices leaders make. Top leaders are responsible for knowing the organization’s environment, considering what it might be like in 5 or 10 years, and setting a direction for the future that everyone can believe in. Lorraine Monroe, former principal of the renowned Frederick Dou- glass Academy in Harlem and founder of the Lorraine Monroe Leadership Institute, refers to a leader as “the drum major, the person who keeps a vision in front of people and reminds them of what they’re about.”3
Stimulating Vision and Action
In the waiting lounge of a fine lakeside restaurant, a sign reads, “Where there is no hope in the future, there is no power in the present.” The owner explains its pres- ence there by telling the story of how his small, picturesque village with its homes and businesses was sacrificed to make way for a flood-control project. After losing their fight to reverse the decision, most business leaders simply let their businesses decline and die. Soon, the only people who came to the village did so to eat at the cheery little diner, whose owner became the butt of jokes because he continued to work so hard. Everyone laughed when he chose to open a larger and fancier restau- rant on the hill behind the village. Yet, when the flood-control project was finally completed, he had the only attractive restaurant on the edge of a beautiful, newly constructed lake that drew many tourists. Anyone could have found out, as he did, where the edge of the lake would be, yet most of the business owners had no vision for the future. The restaurant owner had a vision, and he took action on it.
Hopes and dreams for the future are what keep people moving forward. Read the story in the Consider This box for some insight into the importance of vision as a window to the world that followers may not see. Leaders not only tap into dreams for the future; to make a real difference, they link those dreams with strate- gic actions. Vision has to be translated into specific goals, objectives, and plans so that employees know how to move toward the desired future. An old English churchyard saying applies to organizations as it does to life:
Life without vision is drudgery.
Vision without action is but an empty dream.
Action guided by vision is joy and the hope of the earth.4
Exhibit 13.1 illustrates four possibilities of leadership in providing direction.
Four types of leaders are described based on their attention to vision and attention NEW LEADER
ACTION MEMO
As a leader, you can combine vision with action. You can make a difference for your team or organization by both having big dreams and transforming them into significant strategic action.
394 PART 5THE LEADER AS SOCIAL ARCHITECT
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to action. The person who is low both on providing vision and stimulating action is uninvolved, not really a leader at all. The leader who is all action and little vision is a doer. He or she may be a hard worker and dedicated to the job and the organiza- tion, but the doer is working blind. Without a sense of purpose and direction, activ- ities have no real meaning and do not truly serve the organization, the employees, or the community. The dreamer, on the other hand, is good at providing a big idea
EXHIBIT 13.1 Linking Strategic Vision and Strategic Action
Vision
Action
Source: Based on William D. Hitt,The Leader–Manager: Guidelines for Action(Columbus, OH: Battelle Press, 1988), p. 7.
Consider
Opening a Window to a Brighter World
A blind man was brought to the hospital. He was both depressed and seriously ill. He shared a room with another man, and one day asked, “What is going on outside?” The man in the other bed explained in some detail about the sunshine, the gusty winds, and the people walking along the sidewalk. The next day, the blind man again asked, “Please tell me what is going on outside today.” The roommate responded with a story about the activities in a park across the way, the ducks on the pond, and the people feeding them. The third day and each day thereafter for two weeks, the blind man asked about the world outside and the other man answered, describing a different scene. The blind man enjoyed these talks, and he grew happier learning about the world seen through the window.
Then the blind man’s roommate was discharged from the hospital. A new roommate was wheeled in—a tough-minded businessman who felt terrible, but wanted to get work done.
The next morning, the blind man said, “Will you please tell me what is going on outside?”
The businessman didn’t feel well, and he didn’t want to be bothered to tell stories to a blind man. So he responded assertively, “What do you mean? I can’t see outside. There is no window here. It’s only a wall.”
The blind man again became depressed, and a few days later he took a turn for the worse and was moved to intensive care.
Source: Based on a story the author heard at a spiritual service in Santa Fe, New Mexico.
©iStockphoto.com/JOECICAK
CHAPTER 13CREATING VISION AND STRATEGIC DIRECTION 395
with meaning for self and others. This leader may effectively inspire others with a vision, yet he or she is weak on executing strategic action. The vision in this case is only a dream, a fantasy, because it has little chance of ever becoming reality. To be an effective leader, like Nick Saban at the University of Alabama football program, one both dreams big and transforms those dreams into significant strategic action, either through one’s own activities or by hiring other leaders who can effectively execute the vision and strategy.
Strategic Leadership
Strategic leadership is one of the most critical issues facing organizations.5Strategic leadershipmeans the ability to anticipate and envision the future, maintain flexibil- ity, think strategically, and work with others to initiate changes that will create a competitive advantage for the organization in the future.6 In a fast-changing world, leaders are faced with a bewildering array of complex and ambiguous infor- mation, and no two leaders will see things the same way or make the same choices.
The complexity of the environment and the uncertainty of the future can over- whelm a leader. In addition, many leaders are inundated with information and overwhelmed by minutiae. They may have difficulty finding the quiet time needed for “big-picture thinking.” One study looked at the time executives in various departments spend on long-term, strategic activities and found discouraging results.
In the companies studied, 84 percent of finance executives’ time, 70 percent of information technology (IT) executives’ time, and 76 percent of operational man- agers’ time is focused on routine, day-to-day activities.7 Another study found that, on average, senior executives spend less than 3 percent of their energy on building a corporate perspective for the future.8 Yet no organization can thrive for the long term without a clear viewpoint and framework for the future.
Exhibit 13.2 illustrates the levels that make up the domain of strategic leader- ship. Strategic leadership is responsible for the relationship of the external environ- ment to choices about vision, mission, strategy, and their execution.9 At the top of Exhibit 13.2 is a clear, compelling vision of where the organization wants to be in 5 to 10 years. A vision is an aspiration for the future and answers the question
“Where are we headed?”10 The vision works in concert with the company’s mission—its core values, purpose, and reason for existence. Mission answers the question “Who are we as an organization?” The next level in Exhibit 13.2, strategy,
Strategic leadership the ability to anticipate and envision the future, maintain flexibility, think strategically, and initiate changes that will create a competitive advan- tage for the organization in the future
NEW LEADER ACTION MEMO
As a leader, you can learn to think strategically. You can anticipate and envision the future, and initiate changes that can help the group or organization thrive over the long term.
EXHIBIT 13.2 The Domain of Strategic Leadership
©CengageLearning
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responds to the question “How do we achieve the vision?” Strategy provides direction for translating the vision into action and is the basis for the development of specific mechanisms to help the organization achieve goals. Execution specifies
“What do we do right now?” Strategies are intentions, whereas execution is through the basic organizational architecture (structure, incentives) that makes things happen.
Each level of the hierarchy in Exhibit 13.2 supports the level above it. Each part of this framework will be discussed in the remainder of this chapter.
Strategic leadership doesn’t come naturally, but leaders can develop the neces- sary skills for thinking strategically and navigating uncertainty:11
• Anticipate threats and opportunities. Effective leaders are continuously scan- ning the environment—talking to customers and other outsiders, researching the industry and markets, and so forth—so they don’t miss important signs of change that could help or hurt the organization.
• Challenge the status quo. Strategic thinkers question their own and others’
assumptions and mental models, as we discussed in Chapter 5. They examine problems or opportunities from many perspectives.
• Interpret trends. Leaders look for patterns in what they see and hear and seek new insights rather than accepting the easy answer. One food company execu- tive was developing a marketing plan for the company’s low-carb cake line, but she noticed that most of the customers she talked to kept mentioning problems with eating too much sugar. She worked with other leaders and came up with a highly profitable change in the product mix from low-carb to sugar-free cakes.
• Achieve alignment. Leaders have to get buy-in among employees and other sta- keholders who may have different, even conflicting views and interests. To achieve the vision, everyone must be aligned in the same direction.
To improve strategic leadership, leaders can identify weak points in these skills and work toward correcting them. John Riccitiello, former CEO of Electronic Arts (EA), talks about the importance of these leader skills.
IN THE LEAD
John Riccitiello, Electronic Arts
Several years ago, John Riccitiello saw that EA was in trouble. Social networks and mobile phones were threatening the traditional video game business, and people in the company were scared. Riccitiello had a realization that as a leader “you need to paint a picture that everyone can buy into, even though you’re not sure yourself it’s going to work because you’re trying to see the other side of a technology transition.”
Riccitiello listens to people both inside and outside the organization to try to make sure he’s not heading left when he should be heading right, but he understands that being a leader in a fast-changing industry requires continual adjustment. He is honest with people and tells them that charting a new direction means that sometimes it may be only 70 percent certain because of the uncertainty of the industry, but he emphasizes that every- one has to be 100 percent committed to the direction and know that leaders will pull back and make adjustments when they learn something isn’t working. Riccitiello successfully steered EA through a major transformation from console games to the world of mobile phones and tablets by aligning everyone in the same direction. In a large organization, he says, “you’re mostly painting a picture for a lot of people for whom you’re just a concept….
Check out CengageNOW to complete an online ques- tionnaire that examines your approach to setting goals.
CHAPTER 13CREATING VISION AND STRATEGIC DIRECTION 397
So you’ve got to find a way to be incredibly consistent, so when other people repeat the same thing it conjures up the same image for everyone else.” Without a vision that everyone understands and buys into, people can find themselves pulling in opposite directions—that makes it tough for the company to get where it needs to go.12
Riccitiello resigned in 2013, saying he felt it was time for a new top leader to take EA to the next phase of growth. During his time with EA, Riccitiello took some bold and risky moves. Some paid off and some didn’t, but his approach to strategic leadership was generally positive for the company. One person who worked closely with Riccitiello on shaping strategy says, “The truth is that the game industry continues to pivot very rapidly. EA is in a good place but it requires a lot of energy and laser focus…. He’s been pivoting the company hard for many years, but the industry keeps pivoting faster.”13
Firm strategic leadership is essential for organizations to be effective. Consider that the Conference Board recently reported that 40 percent of all IT development projects are canceled before they are completed, at a significant cost to organizations, and the primary factor explaining their failure is ineffective strategic leadership.14