The Strategic Leader’s Roadmap

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The financial situation for Japanese automaker Nissan Motor Company could not have been more dismal in 1998. The company had chalked up losses in seven of the past eight years, and it was now paying a billion dollars annually just to service its $19-billion debt.

Not that Nissan’s management had not been trying to make the right decisions to staunch the losses. It had earlier set an ambitious target of taking a quarter of Japan’s auto market, but to achieve that, the chief executive had said that the old way of making and selling cars would no longer suffice. A new strategy was required.

The CEO called for a redoubled effort to resurrect its ailing American arm, a market where customers had been flocking to sports utility vehicles. The company, the Nissan chief had urged, must also focus more on earnings than sales, slash its car “platforms,” and close its least profitable models. In short, he had warned, the company could never recover if it continued doing business the same old way. And his new way seemed the right way – providing he could deliver on it. But so far he had not. Nissan’s market share in Japan had stalled at just 16 percent, it was faring little better abroad, and losses were mounting everywhere.

Nissan sought an international partner, finally hooking up with France’s Renault. Renault agreed to infuse $5.4 billion into Nissan, but in return it required more than 36 percent of the company’s ownership and a commitment from Nissan to appoint Renault executive Carlos Ghosn as Nissan’s chief operating officer. With that, Renault inserted a very different kind of leader into the top ranks of Nissan – more confident, more determined, and more resolute.

Carlos Ghosn make clear that he had come to Japan “not for the good of Renault but for the good of Nissan,” and that would entail a new combination of not only a more aggressive execution of the company’s strategy but also a more demanding manager in charge of it. Under his leadership, Ghosn said, the struggling automaker would return to profitability in a year and halve its debt a year later. The company would close three assembly plants in Japan, increase factory utilization from 53 to 77 percent, cut suppliers by nearly half, eliminate 14 percent of the workforce, and reduce administrative costs by 20 percent.

Fifteen years later, Nissan under Ghosn’s strategy and leadership was indeed back on its feet. It had more than recovered to now outperform its industry in Japan, China, Europe, and even North America.

Nissan’s experience reminds us that firms with good strategy but weak leadership can remain rudderless. We also know that firms with good leadership but weak strategy can lurch directionless. Neither a restructuring strategy nor a turnaround leader alone could have engineered Nissan’s historic rebound. It required an individual who could both think and act strategically, a person who brought a strong sense for strategy and a personal capacity to lead its execution.

Becoming a strategic leader is an acquired capacity that can, in our view, be mastered by managers at all levels. As a prerequisite, it is important for aspirants to first appreciate the separate principles of strategy and leadership and then to combine them. We provide a six-step checklist for doing so:

The Strategic Leader’s Checklist

  • Integrate Strategy and Leadership. Master the elements of strategy and leadership both separately as a combined whole.
  • Learn to Lead Strategically. Pursue directed learning, one-on-one coaching, and instructive experience to develop an integrated understanding of strategy and leadership.
  • Ensure Strategic Fit. Arrange a strong match between the strategic challenges of a managerial position and the individual with the leadership skills to fill it.
  • Convey Strategic Intent. Communicate strategic intent throughout the organization and empower others to implement the strategy.
  • Layer Leadership. Ensure that leaders at every level are capable of appreciating strategic intent and implementing it.
  • Decide Deliberatively. Focus on both short- and long-term objectives, press for disciplined analysis, and bring the future into the present.

Adapted from The Strategic Leader’s Roadmap: 6 Steps for Integrating Leadership and Strategy, by Michael Useem and Harbir Singh, copyright 2016. Reprinted by permission of Wharton Digital Press.

About the Authors

Harbir SinghHarbir Singh is Professor of Management, Co-Director of the Mack Institute for Innovation Management, and Vice Dean of Global Initiatives at the Wharton School of the University of Pennsylvania.

Michael UseemMichael Useem is Professor of Management, Director of the Leadership Center, and Faculty Director of the McNulty Leadership Program at the Wharton School.

Management Styles

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Organizations should coordinate management skills into its overall corporate strategy, in order to satisfy customer needs profitably, draw together the components for practical strategies and implement strategic requirements to impact the business. This is my review of how management styles have evolved.

In the period that predated scientific management, the Captain of Industry style prevailed. Prior to 1885, the kings of industry were rulers, as had been land barons of earlier years. Policies were dictated, and people complied. Some captains were notoriously ruthless. Others like Rockefeller, Carnegie and Ford channeled their wealth and power into giving back to the communities. It was an era of self-made millionaires and the people who toiled in their mills.

From 1885-1910, the labor movement gathered steam. Negotiations and collective bargaining focused on conditions for workers and physical plant environments. In this era, business fully segued from an agricultural-based economy to an industrial-based reality.

As a reaction to industrial reforms and the strength of unions, a Hard Nosed style of leadership was prominent from 1910-1939, management’s attempt to take stronger hands, recapture some of the Captain of Industry style and build solidity into an economy plagued by the Depression. This is an important phase to remember because it is the mindset of addictive organizations.

The Human Relations style of management flourished from 1940-1964. Under it, people were managed. Processes were managed as collections of people. Employees began having greater says in the execution of policies. Yet, the rank and file employees at this point were not involved in creating policies, least of all strategies and methodologies.

Management by Objectives came into vogue in 1965 and was the prevailing leadership style until 1990. In this era, business started embracing formal planning. Other important components of business (training, marketing, research, team building and productivity) were all accomplished according to goals, objectives and tactics.

Most corporate leaders are two management styles behind. Those who matured in the era of the Human Relations style of management were still clinging to value systems of Hard Nosed. They were not just “old school.” They went to the school that was torn down to build the old school.

Executives who were educated in the Management by Objectives era were still recalling value systems of their parents’ generation before it. Baby boomers with a Depression-era frugality and value of tight resources are more likely to take a bean counter-focused approach to business. That’s my concern that financial-only focus without regard to other corporate dynamics bespeaks of hostile takeovers, ill-advised rollups and corporate raider activity in search of acquiring existing books of business.

To follow through the premise, younger executives who were educated and came of age during the early years of Customer Focused Management had still not comprehended and embraced its tenets. As a result, the dot.com bust and subsequent financial scandals occurred. In a nutshell, the “new school” of managers did not think that corporate protocols and strategies related to them. The game was to just write the rules as they rolled along. Such thinking always invites disaster, as so many of their stockholders found out. Given that various management eras are still reflected in the new order of business, we must learn from each and move forward.

In 1991, Customer Focused Management became the standard. In a highly competitive business environment, every dynamic of a successful organization must be geared toward ultimate customers. Customer focused management goes far beyond just smiling, answering queries and communicating with buyers. It transcends service and quality. Every organization has customers, clients, stakeholders, financiers, volunteers, supporters or other categories of “affected constituencies.”

Companies must change their focus from products and processes to the values shared with customers. Everyone with whom you conduct business is a customer or referral source of someone else. The service that we get from some people, we pass along to others. Customer service is a continuum of human behaviors, shared with those whom we meet.

Customers are the lifeblood of every business. Employees depend upon customers for their paychecks. Yet, you wouldn’t know the correlation when poor customer service is rendered. Employees of many companies behave as though customers are a bother, do not heed their concerns and do not take suggestions for improvement.

There is no business that cannot undergo some improvement in its customer orientation. Being the recipient of bad service elsewhere must inspire us to do better for our own customers. The more that one sees poor customer service and customer neglect in other companies, we must avoid the pitfalls and traps in our own companies.

If problems are handled only through form letters, subordinates or call centers, then management is the real cause of the problem. Customer focused management begins and ends at top management. Management should speak personally with customers, to set a good example for employees. If management is complacent or non-participatory, then it will be reflected by behavior and actions of the employees.

Any company can benefit from having an advisory board, which is an objective and insightful source of sensitivity toward customer needs, interests and concerns. The successful business must put the customer into a co-destiny relationship. Customers want to build relationships, and it is the obligation of the business to prove that it is worthy.

Customer focused management is the antithesis to the traits of bad business, such as the failure to deliver what was promised, bait and switch advertising and a failure to handle mistakes and complaints in a timely, equitable and customer-friendly manner. Customer focused management is dedicated to providing members with an opportunity to identify, document and establish best practices through benchmarking to increase value, efficiencies and profits.

About the Author

Hank MoorePower Stars to Light the Business Flame, by Hank Moore, encompasses a full-scope business perspective, invaluable for the corporate and small business markets. It is a compendium book, containing quotes and extrapolations into business culture, arranged in 76 business categories.

Hank’s latest book functions as a ‘PDR of business,’ a view of Big Picture strategies, methodologies and recommendations. This is a creative way of re-treading old knowledge to enable executives to master change rather than feel as they’re victims of it.

Power Stars to Light the Business Flame is now out in all three e-book formats: iTunes, Kindle, and Nook.

Overcoming Catastrophe

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Your department just made a catastrophic blunder that cost your company money and reputational equity. How do you recover?
 
By the time two of my direct reports walked into my office one evening everyone else had gone home, which was just what the pair had in mind.

The news they carried was so bad, they didn’t want anyone to witness my reaction. And the reaction they expected was so bad they had spent hours in one of the manager’s office too afraid to break the news to me.

At the time I was director of an organization responsible for processing applications for energy efficiency programs. One such program had high public visibility and it was heavily regulated by the state.

We had only recently assumed responsibility for the program from another work group. During a routine (for us) internal audit of the program, one of the managers discovered substantial errors in the program’s enrollment process, errors that were not only embarrassing to the company but costly.

My reaction? A series of briefly worded questions asked in a calm demeanor. Do we know what caused the errors? Can they be fixed? Do you have a plan to fix them?

Yes and yes and yes were the responses.

Well, let’s put together an implementation plan for the fixes and take it to the boss for his approval.

Their relief at my reaction was so great they burst into laughter. “What? No emotional outburst? No recriminations? No blame? No panic? You don’t want us to go with you to see the boss?”

My reaction was heavily influenced by what a former boss modeled when I was party to a huge, high-profile faux pas. She took the blame for work that had been performed by others, including me.

I never forgot what she did; it taught me the importance of being supportive, not only for the people involved but also for the well-being of the organization. Moving forward, I was motivated to do my best work not cover my butt.

Now it was my turn to be supportive and in the weeks ahead the two managers not only fixed the problem that caused the errors, they created better tracking mechanisms and new procedures that improved the overall process.

Here are some important lessons I have learned as a leader when bouncing back from an organizational catastrophe:

Face the catastrophe head on… and promptly: Bad news does not get better because it’s older. Denial only delays the inevitable need to face the problem and adds nothing to solving the problem. Bringing the problem to light promptly means we can begin to develop potential solutions sooner rather than later.

I let my boss know immediately about the errors right after my meeting with the managers. I promised to bring him the expected fixes soon so that we could review them together. And because I was calm, he was calm.

Choose accountability: Accepting accountability means fessin’ up when others discover our mistakes and bring them to our attention; choosing accountability is telling others about our mistakes. When we choose accountability we seize control of what happens next, we are proactive participants in problem solving rather than victims of circumstances and the recipients of blame.

When my peers found out about the mistake, they were supportive. The director who led the organization in which the program previously resided offered to share the financial costs of the errors. We politely declined. Sharing the financial burden seemed like we were shifting, or at least sharing, the blame; nope, we weren’t going to do that.

Support the people: When errors occur, do not throw people under the bus, especially those who will help in the recovery. It’s one thing to hold people accountable, it’s another to blame and shame them.

By focusing on fixes not fault my managers went from people who were uncertain about their future to leaders who took pride in creating new ways of working that enhanced the process.

Remain confident: Despite the embarrassing nature of errors, do not shrink back into the shadows. Errors can erode confidence in our organization and what we do, hanging our heads only contributes to such an erosion.

Instead, we added the program’s performance metrics to our widely distributed performance dashboard. We knew we wouldn’t have anything to brag about for a few months while the fixes took hold but we weren’t going to live in the aftermath of a catastrophe. We were going to live in the land of solutions, because we were confident our senior leaders, our peers, and most importantly, our internal clients were confident.

No one wants to deal with the aftermath of a catastrophe but if we respond well, we can cope with catastrophe rather than be victimized by it.

About the Author

Greg WallaceAuthor, change agent and leadership trainer, Greg Wallace is CEO of The Wallace Group which consults organizations and leaders to implement change and transformation which produce results that meet the leader’s definition of success. Learn more about developing a personal model of leadership in his second book, “Transformation: the Power of Leading from Identity”.

The Three Dimensions of Emotionally Intelligent Leaders: Finding the Balance of Power, Heart & Mindfulness

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Any discussion about leadership effectiveness would have to include the idea of emotional intelligence (EI). The research is consistent and clear: leaders with high EI are more effective and leaders with low EI get stuck or even derail. I think of emotional intelligence occurring in 3 dimensions: Power (height), Heart (width) and Knowing or Mindfulness (depth). And you have to be good in all three at the same time or you are not good at all. An EI leader moves naturally in the Power dimension. They are confident; they set sound boundaries and expectations; they influence and motivate others. They are not afraid to confront or tell (their) truth. While at the same time an EI leaders move in the Heart dimension. They are compassionate and passionate; they are employee-focused and client-focused. They deeply value others and their input. They are not afraid to ask for help; and they are strangely humble. While at the same time, EI leaders are Mindful. They are measured, peaceful, self-controlled. They are present and knowing–even wise. They feel feelings deeply but do not “leak.” When a leader positively flows in all three dimensions they naturally find their relational “sweet spot” – like a tennis or golf pro.

Lower EI occurs when out of “habit of personality” or reactivity to stress, the leader fails to move positively in any one (or two or three) of the dimensions. For example, a leader who is unsure of being vulnerable thinking it weak (Heart), will either detach and remove himself in time of need (negative Knowing) or become overly critical, defensive or arrogant (negative Power). I worked with a CEO who had notable difficulty with Mindfulness and because of this he would keep inappropriate boundaries with staff (negative Heart) and have temper tantrums (negative Power) when he did not get his way. He had no even keel (Mindfulness).

The bad news is that these reactivity patterns are burnt into our limbic system (the emotional brain). So these patterns are often “set” in place and automatic. The good news is that the brain is “elastic” –i.e., we can change the brain and thus develop emotional intelligence. But it takes focus and work. Using a technique called “Working the Triangle” leaders can identify specific positive behaviors to focus on and practice at any given time. And when they do, they can get back into balance, finding their emotional sweet spot and leadership effectiveness (and joy).

About the Author

Sam AlibrandoSam Alibrando, PhD, is an organizational consultant, psychotherapist, author, teacher, workshop facilitator, collaborative mediator, and executive coach. His is the author of The 3 Dimensions of Emotions: Finding the Balance of Power, Heart, and Mindfulness in All of Your Relationships (New Page Books, July 2016) He has worked on the three-dimensional model for nearly 35 years and has taught it to thousands of people.

Corporate Cultures – Overcoming Cultural Resistance to Change

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StrategyDriven Corporate Cultures ArticleThe firm hand of culture drives what, how, and why work gets done. Consequently, attempts to change established policies, processes, or practices will meet with a degree of cultural resistance. Therefore, the challenge for leaders becomes how to effectively implement needed change in spite of this resistance; especially if the foundational tenants of the organization’s culture must be preserved.

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About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.