Level Three Leadership 3rd Edition

1. Level Three Leadership3rd Edition PowerPoint Lecture Notes James G. Clawson

2. Chapter 11 Introduction Without strategy, leaders are ineffective: they have no direction, no purpose Strategic thinking is especially important today, during the upheavals that accompany the shift from Industrial Age to Information Age Great leadership begins with great dreams; without the ability to develop powerful strategic dreams, leaders� abilities are undermined. Strategists� dreams are of the external kind, typically, not the internal dreams discussed in the resonance chapter.

3. Definitions Strategic issue: any issue that affects your ability to develop and maintain a competitive advantage A competitive advantage has three components: It adds superior value It is difficult to imitate It enhances your own flexibility

4. Strategic challenges and issues occur in three domains: (this is another way in which this is �level three leadership.� The organization The work group (every unit can be outsourced in today�s world) The individual (every person�s job is at risk)

5. Fundamentals of Strategic Thinking �Strategy is the management of natural competition.� (Henderson) Several models for understanding strategic thinking: Fit Models. These models emphasize the importance of finding appropriate niches in the marketplace and optimal times to compete Andrews� nine criteria for evaluating the strength of corporate strategies SWOT (Strengths, Weaknesses, Opportunities, Threats) Porter�s Five Forces Model Porter�s Generic Value Chain Core Capabilities

6. Intent Model. This model focuses on using core capabilities to develop a strategic advantage at some point in the future. It depends on both having a vision and having the determination and resources to bring that vision to pass Ecological Model. This model proposes that in a global marketplace, two companies may be competitors in one region and collaborators in another; therefore they have a complex, �ecological� relationship rather than a simple �business is war� opposition. Strategy should acknowledge this complexity and explore objectives other than elimination of the competition Innovator�s Dilemma. Key measure is percent utilization of product�s features. Rational decision making encourages one not to compete with low tech, unsophisticated, low margin competitors.

7. Experience Economy. Pine and Gilmore argue for phases in economic history. Time between phases and the margins each major focus brought have diminished dramatically. Now that margins on services are declining world wide, they argue that people are paying high margins for �experiences� things that are gone once the moment has past, with no real value added except the experience and its memory. This seems to be true in any industry where customers can get competitive goods and services, the experience is the difference defining where customers will go next.

8. Good to Great. Jim Collins follows up his co-authored blockbuster, Built to Last, with Good to Great that argues for six differentiators among 1600 company sample in which only 11 made the jump from good to great over thirty years. Level Five Leadership (which has nothing to do with our framework�it�s only the recognition of levels in an organization with a somewhat arbitrary definition of the superior executive, one with will and humility), first who then what, confront the brutal facts, hedgehog concept, culture of discipline, and technology accelerators.

9. Scenario Building. The concept developed at Royal Dutch Shell in the �70�s to anticipate alternative possible futures and then to watch for them in the news to track which one was developing. Each possible (NOT best case and worst case) scenario has strategic implications for a company.

10. Strategic conversations. Learning to use the �scientific method� including observations, data collection, analysis, and using that data to make decisions creates a basis for good strategic conversations. This model omits the notion of a creative genius that can inductively construct the data in new ways to find leapfrogging strategies. Systems Perspective. The ability to see how the various forces and components of an industry fit together Focus on Intent. Without clear intent, strategy will vacillate Intelligent Opportunism. Finding, through careful analysis, the profitable places in which to do business Timing. Hypothesis. Implementation of intent must be based on a hypothesis about cause and effect relationships in the industry

11. Chapter 12 Developing strategic thinking is hard, continuous work. Sadly, many--most executives in my experience--seem to get confused when talking about strategy. Here�s a simple framework for helping keep the various elements of strategy clear. These all can occur at the three levels, organizational, work group, and individual. It has five parts: Mission Statement. An explanation of why the organization exists: what business it is in, and for what reason. Don�t waste time on committee generated mission statements that are generic and demotivating. �to provide world class goods and services to our customer with a maximal profit to our shareholders.� One short phrase, 2-10 words.

12. Vision Statement. Describes where the organization is going, through a vivid, often metaphorical description of the organization�s long-term goal Values Statement. Outlines how the organization will go about its work: what means to the end will and will not be tolerated Strategy. The path of choices the organization will make in moving toward its vision. This is often the longest section. Operating Goals. The periodic milestones and objectives the organization will use to monitor the progress of its strategy. Often mistook for strategy in response to twenty-something analysts from Wall Street who�ve never run anything.