Chapter 9 Leadership

CHAPTER 9:
CREATING VISION
AND STRATEGIC
DIRECTION

TABLE OF CONTENTS
 SUMMARY
 THE LEADER’S JOB: LOOKING FORWARD
 LEADERSHIP VISION
 MISSION
 THE LEADER AS STRATEGIST-IN-CHIEF

SUMMARY
 This chapter explains how great leaders
establish organizational direction through
vision and strategy. .
 They are responsible for studying the
organization’s environment, considering how
it may be different in the future, and setting a
direction everyone can believe in.
 Leaders make a real difference for their
organization when they link vision to strategic
action, so that vision is more than just a
dream.

SUMMARY
 A clear, powerful vision links the present and
the future, energizes employees and focuses
attention, and gives people an inspiring
picture of the future to which they are eager
to commit themselves. The vision can also
give meaning to work and establish a
standard of excellence by presenting a
challenge that asks all workers to give their
best

SUMMARY
 The mission includes the company’s core
values and its core purpose or reason for
existence. Visions for the future change,
whereas the mission should persist, as a
reflection of the enduring character of the
organization.
 Effective leaders frame a noble purpose that
inspires followers and helps the organization
maintain a competitive advantage. To frame
an organizational purpose that helps people
find their work meaningful, leaders can
choose among four basic concepts as the
basis of purpose: discovery, excellence,
altruism, and heroism.

SUMMARY
 Strategic management is the serious work of
figuring out how to translate vision and mission
into action.
 Strategy is a general plan of action that
describes resource allocation and other activities
for dealing with the environment and helping
the organization reach its goals. Like vision,
strategy changes, but successful companies
develop strategies that focus on core
competence, develop synergy, and create value
for customers.
 Strategy is executed through the systems and
structures that are the basic architecture for how
things get done in the organization.

LEARNING OUTCOMES
 After studying this chapter, you should be
able to:
 Explain the relationship among vision,
mission, strategy, and mechanisms for
execution.
 Create your personal leadership vision.
 Use the common themes of powerful
visions in your life and work.
 Describe four basic approaches for framing
a noble purpose that followers can believe
in.
 Understand how leaders formulate and
implement strategy.
 Apply the elements of effective strategy.

THE LEADER’S JOB:
LOOKING FORWARD

THE LEADER’S JOB:
LOOKING FORWARD
A leader: The Man Behind the
Steering wheel
 Superior organizational performance is determined
largely by the choices leaders make.
 Leaders should not make impulse decisions or
randomly decide on the spot. Each decision should
ultimately contribute towards the growth of the
organization and the organization’s objectives.
 Top leaders should know the business environment,
consider what it might be like in 5 to 10 years, and
set the company’s direction. Decisions should help
the company progress in that set direction.

THE LEADER’S JOB: LOOKING
FORWARD
A Quote To Think About
 "To be a great leader, one needs
to have good strategies, be
knowledgeable and able to
predict the future.”
 Tun Dr Mahathir Mohamad,
Prime Minister of Malaysia

THE LEADER’S JOB: LOOKING FORWARD
What You Can Do as an Effective Leadership
 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.
 Having big dreams equals having
a vision and acting on them is
strategic action.
 We will define both those key
concepts and understand how
together they create a strategic
leader.

Which Type of Leader are you?
 Four types of leaders are
described based on their attention
to vision and attention to action:

Linking Strategic Vision and Strategic Action
The Dreamer The Effective
Leader
The
Uninvolved
The Doer
Vision
Low
Action
High
Low
High

Defining Strategic Action
 A strategy involves defining goals then determining actions that will
help in achieving this goal, making the best use of the available
resources.

Defining Strategic Action
 Strategic action is the action formulated and executed based on set
strategy (which stemmed from having a clear vision)

FORWARD
From A Psychological Point Of View
 Hopes and dreams for the
future keep people moving
forward.
 Leaders tap into dreams for the
future and link those dreams with
strategic actions.
 Vision has to be translated into
specific goals, objectives, and
plans so that employees know
how to move toward the desired
future.
 This is the essence of strategic
leadership

Definition of Strategic Leadership
 Strategic Leadership - The
ability to anticipate and envision
the future, maintain flexibility,
think strategically, and initiate
changes that will create a
competitive advantage for the
organization in the future

Strategic Leadership
 The complexity of the
environment and the uncertainty
of the future can overwhelm a
leader. In addition, many leaders
are inundated with information
and overwhelmed by minutiae.
 No organization can thrive for the
long term without a clear
viewpoint and framework
for the future.

The Domain of Strategic Leadership
 The domain of strategic
leadership has four
components:

FORWARD
The Domain of Strategic Leadership
Where are we headed?
Who are we ?
How do we get there?
What do we do right now?

Building The Necessary Skills
 Leaders can develop the
necessary skills for thinking
strategically and navigating
uncertainty by:
 To improve strategic leadership,
leaders can identify weak points
in these skills and work toward
correcting them.

Applying What You Learned
 As a leader, you can learn to think
strategically by:

LEADERSHIP VISION
Definition
 A vision is an attractive, ideal future that is
credible yet not readily attainable. It is an
ambitious view of the future that everyone
involved can believe in, one that can
realistically be achieved, yet one that offers a
better future that is better in important ways
than what now exists.

LEADERSHIP VISION
Example of Brief Vision Statements
 Apple: To make a contribution
to the world by making tools for
the mind that advance human
kind
 Four seasons: achieve first-
choice ranking among guests
 BAE systems (defense
company):to protect those ho
protect us
 Virginia department of
transportation: Keep Virginia
moving
 Deloitte Touche Tohmatus:
to be recognized as the best
professional services firm in the
world
 Ukrop’s Food Group: To be a
world class provider of food and
services.
 United Way: Improve the lives
by mobilizing the caring power of
communities.

LEADERSHIP VISION
The Nature Of Vision
Current
Reality
Moving Towards a Desired Future
Staying on the course

LEADERSHIP VISION
 The vision reflects the core values
of the organization and what it
would like to achieve in the near
and far future.
 Effective leaders share their
vision with their employees,
shareholders and other
stakeholders.
 When the people involved with
the company are aware of its
vision, it gives them a sense of
purpose and drives them to
contribute to making this vision
become a reality.
SHARED VISION
Sense of Purpose Sense of Purpose

LEADERSHIP VISION
What Vision Does

LEADERSHIP VISION
Why Vision is Critical?
 You can maximize your
organization's success and your
personal success by defining and
clearly stating your vision.
 Here are some statistics:

LEADERSHIP VISION
Real Life Example
 A clear vision helps motivate
and retain employees.
 The company made its vision clear.
The clear vision motivated the
company's employees to give it
their best as they were all driven by
the leader’s vision, feeling they are
working for a bigger purpose than
selling wireless phones.

LEADERSHIP VISION
Discussion Question
 A management consultant said strategic
leaders are concerned with vision and
mission, while strategic managers are
concerned with strategy.
 Do you agree? Discuss.

LEADERSHIP VISION
Discussion Answer
 Leaders are concerned with vision, mission,
and strategy. When leaders rely solely on
formal strategic planning, competitor analysis,
or market research, they miss opportunities.
Too much rational analysis can kill vision. Still,
leaders need a broad and inspiring vision and
an underlying plan for how to achieve it. To
decide and map a strategic direction, leaders
strive to develop industry foresight based on
trends in technology, demographics,
government regulation, and lifestyles that
help them identify new competitive
advantages.

LEADERSHIP VISION
Action Plan: What should I do
as a leader in my
organization?
 As a leader, you can articulate an optimistic
vision for the future that will inspire and
challenge people to give their best, set a
standard of excellence and integrity, and help
people find meaning in their work

LEADERSHIP VISION
Common Themes of a Vision
 Four themes are common to
powerful, effective visions:

 If you worked for a company like Amazon or
Google that has a strong vision for the future,
how would that affect you compared to
working for a company that did not have a
vision?
LEADERSHIP VISION
Discussion Question

 A company like Amazon or Google that has a
strong vision energizes people and garners
commitment, whereas a company without a
vision does not generate enthusiasm about
work. Many people commit their time and
energy voluntarily to projects they believe in but
leave their energy and enthusiasm at home
when they go to work, because they don’t have
anything to inspire them.
 A study suggests that one reason organizations
lose good employees is the lack of a clear vision
that provides a sense of direction. People are not
generally willing to make emotional
commitments just for the sake of increasing
profits.
LEADERSHIP VISION
Discussion Answer

 Many visions are written and hung on a wall.
 Do you thing this type of vision has value?
 What would be required to imprint the vision
within each person?
LEADERSHIP VISION
Discussion Question

 Writing the vision on the wall serves as a
constant reminder to everyone in the
organization; however, activities supporting
the vision are needed to imprint it within each
person. People need the reinforcement of the
vision when engaging in everyday work
activities. It is easy to slip into a routine, focus
on a specific task, and lose sight of the big
picture.
 A vision that is written and hung on
the wall serves as a continuous
reinforcement.
LEADERSHIP VISION
Discussion Answer

LEADERSHIP VISION
Video Time- Apple’s Mission
 Steve Job’s Vision and Mission
from 1997.
 Analyze how a clear vision and
mission from a decade a go led
apple to its current revolutionary
success.
 https://www.youtube.com/watch?v=5yzzya7Og8E

LEADERSHIP VISION
Leader Steps to Creating a Vision
 In innovative companies, leaders
co-create the vision with
followers so that everyone is
intimately involved in
building the desired future.
 Everyone can identify with the
vision and have a deeper
understanding and commitment
to achieving it.

LEADERSHIP VISION
Leader Steps to Creating a Vision
 Leaders use the following six (6)
steps to co-create a vision:

LEADERSHIP VISION
Read an Article
 “Of Mission and Vision
Statements and Their Potential
Impact on Employee Behaviour
and Attitudes: The Case of A
Public But Profit-Oriented Tertiary
Institution”
 A paper by William Phanuel Kofi
Darbi - Ghana Institute of
Management and Public
Administration Business School
https://www.ijbssnet.com/journals/Vol_3_No_14_Special_Issue_July_2012/

A LEADERSHIP VISION
Read an Article - Abstract
 Research on mission and vision
statements as strategic management
tools has often been limited to private
for profit organizations and more so
to the experience of senior executives
and managers. This paper reports the
perspectives of employees of a unique
public but profit-oriented tertiary
institution with a renewed corporate
mandate in a developing country.
 Based on a survey of 120 employees,
this paper explored employees state‟
of awareness of mission and vision
statements, perceptions about their
level of ownership and whether the
institution's mission and vision
statements impact/can impact on
their behaviour and attitudes. The
results indicated that most employees
have first hand knowledge of the
mission and vision statements though
they do not frequently come across
them; also the level of knowledge of
the components/contents and
perceptions about ownership are low.
Employees see ownership as a
prerequisite for the statements to
impact on their behaviours and
attitudes.

MISSION
 Mission works with a company’s vision. The mission is the organization’s
core broad purpose and reason for existence. It defines the
company’s core values and reason for being, and it provides a basis for
creating the vision.

MISSION
What Mission Does
 A strong mission is important to a
company.

MISSION
The Power Of A Strong Mission
 A strong mission

MISSION
Parts of a Mission
 The mission is made up of
two critical parts:
 Core values—guide the
organization “no matter
what.”
 Core purpose—leaders take
care when defining a core
purpose so that the
organization can grow and
change.
 The core values and core purpose
are frequently expressed in a
mission statement.

MISSION-
The Power of a Strong Mission
Source: Susan Ellingwood, ‘‘On a Mission,’’ Gallup Management Journal (Winter 2001), pp. 6–7.

MISSION
Aflac’s Mission and Values
Source: http://www.aflac.com/aboutaflac/corporateoverview/ourphilosophy.aspx

MISSION
Discussion Question
 Do you think most employees know what the
mission of their company is?
 Suggest some ways leaders can effectively
communicate the mission to people both
inside and outside the organization.

MISSION
Discussion Answer
 Leaders could hold regular meetings where
they mention the company’s mission, discuss
if the company is on track to achieve this
mission, and if not, what it needs to do to
achieve it.

MISSION-
A Framework for Noble Purpose
 Most successful companies have
missions that proclaim a noble
purpose of some type.
 Leaders are responsible for
framing a noble purpose that
inspires and leads followers to
high performance and helps the
organization maintain a
competitive advantage.

MISSION
A Leader’s Framework for Noble
Purpose
 There are four basic
approaches to framing an
organizational purpose can tap
into people’s desire to contribute
and feel that their work is
worthwhile.

MISSION
Purpose
 Discovery: the opportunity to
find or create something new.
 Basis for Action: Pioneer,
Entrepreneur
 Example: Google, 3M, Samsung

MISSION
Purpose
 Excellence: focus on being the
best on both an individual and an
organizational level.
 Basis for Action: Fulfillment
 Example: Berkshire Hathaway,
Allied signal, Apple

MISSION
Purpose
 Altruism: emphasize serving
others.
 Basis for Action: Happiness
 Example: Dollar General,
Dannon milk products

MISSION
Purpose
 Heroism: being strong,
aggressive, and effective. With
this approach, the basis of action
is people’s desire to achieve and
to experience self-efficacy.
 Basis for Action: Achievement
 Example: Microsoft, Exxon
Mobilm

MISSION
Purpose
Purpose Description Basis for Action Examples
Discovery Finding the New Pioneer,
Entrepreneur
Google, 3M,
Samsung
Excellence Being the best Fulfillment Berkshire
Hathaway, Allied
signal, Apple
Altruism Providing service Happiness Dollar General,
Dannon milk
products
Heroism Being Effective Achievement Microsoft, Exxon
Mobilm

MISSION-
Discussion Question
 Do you think every organization needs a
noble purpose in order to be successful over
the long term?
 Discuss.

MISSION
Discussion Answer
 Most successful companies have missions that
proclaim a noble purpose of some type.
Leaders frame a noble purpose that inspires
and leads followers to high performance and
helps the organization maintain a competitive
advantage. People like to have a sense that
their work matters and makes a positive
difference in the world. The four basic
approaches in framing an organizational
purpose tap into the desire to contribute.

MISSION
Read an Article
A comparison of
mission statements
and their rationales in
innovative and non-
innovative firms
 A paper By: Christopher K. Bart
Michael G. DeGroote School of
Business, McMaster University,
Hamilton, Ontario, Canada, L8S-
4M4

MISSION
Read an Article - Abstract
 This article presents findings from
research which examined and
analyzed the content of mission
statements from 72 North
American corporations.
Specifically, 25 mission statement
components were analysed to
determine if there were any
differences between innovative
and non-innovative
organizations.
 In addition, the rationales behind
the creation of the mission
statements in both types of firms
were also examined and
compared. The findings suggest
that there are some mission
components and rationales which
seem to vary significantly
between innovative and non-
innovative companies and it is
these to which managers should
pay especially close attention.

THE LEADER AS A
STRATEGIST IN CHIEF

THE LEADER AS A
STRATEGIST IN CHIEF
 For organizations to succeed, leaders have to translate vision, values, and
purpose into action, which is the role of leader as strategist-in-chief.

THE LEADER AS A
STRATEGIST IN CHIEF
 Strategic management refers to the set of decisions and actions used
to formulate and implement specific strategies that will achieve a
competitively superior fit between the organization and its environment
so as to achieve organizational goals.

THE LEADER AS A STRATEGIST IN CHIEF
How to Achieve Vision
 Strategy can be defined as the
general plan of action that
describes resource allocation and
other activities for dealing with
the environment and helping the
organization attain its goals and
achieve the vision.
 Leaders have to be clear on the
organization’s purpose and vision
before they can adopt an
effective strategy.
 Strategy involves making
decisions every day based on
what the organization wants to
do and be.

How to Develop Effective Strategy
 To develop strategy, leaders
actively listen to people, examine
trends, and study past events.
 Leaders should also use hard
analysis—trends in technology,
demographics, government
regulation, values, and lifestyles;
situation analysis, including
SWOT (strengths, weaknesses,
opportunities, and threats) and
external information from a
variety of sources; budgets;
financial ratios; profit and loss
statements; and employee
surveys.

 As a leader, you can prepare for the future based on
trends in the environment today.
 Don’t be afraid to think radically.
 You can shift your strategies to fit changing conditions.
Sometimes leaders shift their strategy several times to
get it right.
 Strategy changes over time to fit shifting environmental
conditions.
Action Plan: What should I do as a leader in my
organization?

Elements of Strategy
 To improve the chances of
success, leaders develop
strategies that focus on three
qualities:

 Core competence—an
organization’s core competence is
something the organization does
extremely well in comparison to
competitors.

 Developing synergy—synergy
occurs when organizational parts
interact to produce a joint effect
that is greater than the sum of
the parts acting alone. The
organization may attain a special
advantage with respect to cost,
market power, technology, or
employee skills. Companies also
gain synergy through alliances
and partnerships.

 Creating value for
consumers—focusing on core
competencies and attaining
synergy help companies create
value for their customers. Value
can be defined as the
combination of benefits received
and costs paid by the customer.

Strategy Formulation
 Strategy formulation integrates knowledge of the environment, vision, and
mission with the company’s core competence in such a way as to attain synergy
and create value for customers.

Strategy Execution
 Strategy execution is putting
strategy into action by adjusting
various parts of the organization and
directing resources to accomplish
strategic goals.
 Sometimes called implementation,
it is the most important and most
difficult part of strategic
management. Leaders must manage
the execution process to achieve
results.

Leader Tools for Strategy Execution
 To implement strategy, leaders
provide followers with line of
sight to the organization’s
strategic objectives, which means
followers understand the goals
and how their actions will
contribute to achieving them.
 The following techniques
can help leaders effectively
implement strategy:

The Leader as a strategic Decision Maker
 Leaders make decisions every day
—some large and some small—
that support company strategy.
 The two dimensions considered
when making a strategic decision
are:
 strategic impact on the
business and
 the difficulty of executing
the decision.

 A change that both produces a
high strategic impact and
executes easily would be a
leader’s first choice for putting
strategy into action.

 Some strategic decisions are
difficult to execute. Leaders
initiate major changes despite the
risks and difficulties if the
strategic impact is very high.

 Leaders also sometimes pursue
activities that have a low
strategic impact but which are
relatively easy to execute.
 For example, incremental
improvements can have an
important effect on the
organization over time.

 Effective leaders try to avoid
making decisions that are both
difficult to execute and have
low strategic impact.

High impact, Hard
to execute:
Major changes but with
potential high payoffs
High impact, easy
to execute:
Simple actions that have high
strategic impact- start here
first
Low impact, Hard
to execute: Difficult
changes with little payoff-
Avoid this category
Low impact, easy
to execute: Small wins,
incremental value. Use for
symbolic value of success
Strategic
Impact
Hard
Ease of
Execution
High
Low
Easy

THE LEADER AS A
STRATEGIST IN CHIEF
Discussion Question
 If vision is so important, why do analysts and
commentators sometimes criticize a new
CEO’s emphasis on formulating a vision for a
company that is struggling to survive?
 Discuss.

THE LEADER AS A
STRATEGIST IN CHIEF
Discussion Answer #10
 Analysts and commentators do not always
understand that leaders and employees come
together around a vision. If a company is
struggling, leaders consciously adopt a
focused vision and strategy and make sure
everyone’s activities move the organization in
the right direction.
 This is the strategy for keeping an
organization competitive. For example, GM
lost its way because leaders couldn’t agree on
a clear direction for the organization.
Innovation got pushed to the back burner in
favor of efficiency, but without a strategic
focus the company’s resources were spread
way too thin.

KEY TERMS AND CONCEPTS
 Strategic leadership: the
ability to anticipate and envision
the future, maintain flexibility,
think strategically, and initiate
changes that will create a
competitive advantage for the
organization in the future.
 Vision: an attractive, ideal
future that is credible yet not
readily attainable.
 Strategy: the general plan of
action that describes resource
allocation and other activities for
dealing with the environment and
helping the organization attain its
goals.
 Self-reference: a principle
stating that each element in a
system will serve the goals of the
whole system when the elements
are imprinted with an
understanding of the whole.
 Mission: the organization’s core
broad purpose and reason for
existence
 Core competence: something
the organization does extremely
well in comparison to
competitors.

KEY TERMS AND CONCEPTS
 Strategic management: the
set of decisions and actions used
to formulate and implement
specific strategies that will
achieve a competitively superior
fit between the organization and
its environment so as to achieve
organizational goals.
 Synergy: the interaction of
organizational parts to produce a
joint effect that is greater than
the sum of the parts
 Value: the combination of
benefits received and costs paid
by the customer.
 Strategy formulation:
integrating knowledge of the
environment, vision, and mission
with the core competence in such
a way as to attain synergy and
create customer value.
 Strategy execution: putting
strategy into action by adjusting
various parts of the organization
and directing resources to
accomplish strategic goals.

Chapter 9 Leadership

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Chapter 9 Leadership