The Leader as VisionaryTransitioning Into A Leadership Role

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.

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

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

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

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

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

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

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

Skills in the “New” Firm

Features Individual Skills Managerial Skills

Networked Teamwork Team Building, Org. Design

Flat Negotiation Motivation

Flexible Multitasking Leadership

Diverse/Global Communication

Manage Conflict, Culture, Diversity

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.

Leaders versus Managers

Managers LeadersCope with complexityShield the firm from externally-driven chaosUse plans, budgets, and structure to control and protect against changeSupervise/organizeShort-term transactionsAppointed from above

Cope with changeSteer the firm toward externally-driven changeUse vision, direction to inspire and motivate people to changeEnergize/alignLT transformationSelected from below

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

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

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.

Use of authorityby manager

Area of freedomfor subordinates

DecideAlone

ConsultIndividually Consult Group Facilitate Delegate

50 103 7

Leadership Styles: How Leaders Make Decisions (Vroom’s theory)

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

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

Path-Goal Theory

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

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

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

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

Charismatic Leadership

Charismatic leaders:Have great confidence and conviction in

the moral righteousness of their beliefsHave 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

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

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

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.

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

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

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”

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’

‘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.

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

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)

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”

‘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?

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

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

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

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

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

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

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

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

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)