The Leader as Visionary

1. 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.

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. Skills in the “New” Firm

11. 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.

12. Leaders versus Managers

13. 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

14. 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

15. 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.

16. Leadership Styles: How Leaders Make Decisions (Vroom’s theory) Consult Individually Decide Alone Consult Group Facilitate Delegate 0 3 5 7 10 Area of freedom for subordinates Use of authority by manager

17. Vroom’s 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

18. 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 sub’s ability and locus of control

19. Path-Goal Theory

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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.

28. 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

29. Components of Vision • Core Ideology – a firm’s 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

30. 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”

31. Core Purpose • The firm’s fundamental reason for being – what inspires people to do the firm’s 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’

32. ‘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.

33. 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

34. 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)

35. 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”

36. ‘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?

37. 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

38. 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 “We’ve Arrived” syndrome • Failure to replace an achieved BHAG – Apple

39. 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

40. 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

41. 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

42. 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

43. 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 that’s 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

44. 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

45. 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 firm’s 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)