Executive Leadership Scenarios & Strategy

1. Executive Leadership Scenarios & Strategy Patricia Riley, Zhan Li Sandi Evans, Elisiheve Weiss & Jackie Selby

2. Agenda 1. Objectives 2. Introductions 3. Leadership 4. Strategy 5. Scenarios & Story 6. Next steps USC Annenberg

3. Philosophy • 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 USC Annenberg

4. Objectives of This Session • Enhancing transformational and organizational leadership • How conversations about the future improve strategic thinking for the enterprise • Developing your analytical skills USC Annenberg

5. New Approaches to Leadership • Transformational leadership • Cascading leadership • Leadership as an organizational trait • Thought leadership and strategy at the enterprise level USC Annenberg

6. Leadership is Not What You Think • Direct vs. indirect • Networked and shared • Institutional capacity • Enabling systems USC Annenberg

7. 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 USC Annenberg

8. Transformational 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 USC Annenberg

9. Transformational 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 USC Annenberg

10. Cascading Leadership • Strong leaders at the top empower other leaders down the line • Depends on continuing support • Requires excellent communication ACE Management Education

11. 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 USC Annenberg

12. 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 12 USC Annenberg

13. Are we learning as fast as the world is changing? USC Annenberg

14. Disruptive technologies Speed of global change Generational differences Niche markets The Future Has a Short Shelf Life Where are the inflection points? ACE Management Education

15. The 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 USC Annenberg

16. Strategy 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 USC Annenberg

17. 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 Competitive Advantage ACE Management Education

18. Barriers to strategy execution Strategy Implementation Only 10% of organizations execute their strategy Vision Barrier People Barrier Management Barrier Resource Barrier Only 25% of managers have incentives linked to strategy 85% of executive teams spend less than one hr per mth. discussing strategy 60% of organizations don’t link budgets to strategy Only 5% of the workforce understands the strategy ACE Management Education

19. Strategic Leadership Remember: Strategic thinking and planning is the process of deciding the optimal alignment between unlimited needs and limited resources to achieve your priorities. USCCenter for Organizational Effectiveness USC Annenberg 19

20. New 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 ACE Management Education

21. Scenario 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 ACE Management Education

22. Scenario 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 ACE Management Education

23. Scenario 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 ACE Management Education

24. Scenario 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) ACE Management Education

25. ACE Management Education

26. Scenarios Stories Plausible 5- 20 years out The key is the conversation USC Annenberg

27. Scenario Exercise • Few talked about own organizations • When they do they say good things! • Scattered future • Non-profits scenarios are not much based on technology ACE Management Education

28. Effective Leaders GoodStory Communication Good People Right Tools Processes ACE Management Education

29. 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 USC Annenberg

30. When you have a real innovation, don’t compromise! Peter Drucker USC Annenberg

31. Performance: 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. ACE Management Education

32. “You can’t depend on your eyes if your imagination is out of focus.” Mark Twain USC Annenberg