Strategic Leadership

Strategic planning is oriented to enhancing the bottom-line.  Leadership affects organizational performance as well.[1] Therefore, strategic leadership, which can be defined as the formulation and articulation of a vision depicting a social reality and incorporating strategic aims, can enhance a firm’s sustainable competitive advantage.[2] Strategic leadership is an intangible core competency that can give rise to a core capability differential involving reputation.[3] That strategic leadership is difficult to understand and therefore to imitate contributes to its value in no small measure. But a straightforward application of strategic leadership may be thwarted if a tension develops in its exercise.  In particular, the principles behind an enduring leadership vision can be at odds with pressing strategic interests, especially as these profit-interests change while the abstract vision still holds.

The full essay is at "Strategic Leadership."

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[1]. J. A. Petrick and J. F. Quinn, “The Challenge of Leadership Accountability for Integrity Capacity as a Strategic Asset,” Journal of Business Ethics 24 (2001): 331; S. Finkelstein and D. Hambrick, Strategic Leadership: Top Executives and Their Effects on Organizations (St. Paul, MN: West Publishing, 1996); J. Ciulla, “Leadership Ethics: Mapping the Territory,” Business Ethics Quarterly, 5, no. 1(1995): 5-28; K. B. Lowe, K.G. Kroeck, and N. Sivasubramaniam: “Effectiveness Coorelates of Transformational and Transactional Leadership: A Meta-analytic Review of the MLQ Literature,” Leadership Quarterly 7, no. 3 (1996), 385-425.

[2]. R. D. Ireland and M.A. Hitt, “Achieving and Maintaining Strategic Competitiveness in the 21^st Century: The Role of Strategic Leadership,” Academy of Management Executive 13, no. 1 (1999): 43.

[3]. Petrick and Quinn, “The Challenge of Leadership”; J. A. Petrick et al, “Global Leadership Skills and Reputational Capital: Intangible Resources For Sustainable Competitive Advantage,”  Academy of Management Executive 13, no. 1(1999): 58, f.n. 2.

Johnson’s “Reinvention” of JC Penney: Too Much and Too Little

In April 2013, JC Penney’s board wished the CEO, Ron Johnson, “the best in his future endeavors.” His effort to “reinvent” the company had been “very close to a disaster,” according to the largest shareholder, William Ackman. During Johnson’s time at the company as its CEO, shares fell more than fifty percent. In February 2013, Johnson admitted to having made “big mistakes” in the turnaround. For one thing, he did not test-market the changes in product-line and pricing-points. The latter in particular drove away enough customers for the company’s sales to decline by 25 percent. Why did Johnson fail so miserably?

The full essay is at "JC Penny Reinvented?"

Ron Johnson's short tenure as CEO of JC Penney was disastrous, according to Altman.   Source: Reuters

On the Value of Creating a Hybrid Industry by Appropriating High Tech: The Case of Borders and Amazon

From the ten-year chart of Amazon.com's stock, a clear upward trajectory can be discerned from the days of financial panic in the last quarter of 2008 even in spite of the plateau in mid-2010. On May 10, 2011, AMZN was trading at around $204 a share. At the time, Amazon's new "cloud music" service was said to be behind the surge. In general, the general uplift since late 2008 can be ascribed to the company being on the right side of the computer technology changes that were transforming not only industries, but modern society itself. As Amazon.com was benefiting from its move into music, Microsoft was buying Skype for $8.4 billion in order to get into communications. The hefty price tag can itself be taken as a confidence vote in the continuance of the technological shift as well as the value in moving to a new, hybrid industry model rather than limiting the company to its existent industry model. In other words, even in companies facing a serious technological threat in the business-environment, even top managers can fail to adopt a broader perspective within which the threat can be seen as an opportunity to change the company and even its own "micro-climate," or immediate industry. Hence by 2019, Borders no longer existed whereas Amazon was still profiting. Even the dinosaur McDonalds had tried to shift into a hybrid coffee-shop/restaurant industry model. 



10 year Amazon.com stock chart from Investorguide.com

The full essay is at "Borders: A Hybrid Industry?"

Visionary Leadership at Zynga

Faced with a stock price down 75 percent since its IPO and conflict with subordinates throughout 2012, Zynga’s chief executive Mark Pincus had plenty on his plate as he met with Bill Campbell of Apple in September of that year. Zynga investor and venture-capital firm Kleiner Perkins Caufield & Byers had brought Campbell in to advise the CEO. While it is tempting to play around the edges and work on “communication processes” and hand out more employee stock-options, the bottom-line in such cases is typically the need to improve the products either simply to be better products or better tailored to changing consumer tastes and habits. Product development that can transform companies may result from the vision of a leader for whom strategy is simply a matter of reaching a destination already known.
 

Mark Pincus, CEO of Znyga. From this picture, it is hard not to like the guy.       Reuters

 

 

The full essay is at "Visionary Leadership: The Case of Zynga."

CEOs in 2012: Avoid the “Fiscal Cliff”!

Reporting in November 2012 in anticipation of the across-the-board budget cuts and end of the Bush tax cuts, together expected to amount to around $500 million for 2013 alone, the Wall Street Journal observed that some large American corporations were “making plans to slow investments, lay off workers and pay less-generous dividends if Congress and the Obama administration don’t find a way to avert the so-called fiscal cliff.” Such plans could represent a self-fulfilling prophesy wherein a hit of just over a half trillion dollars in an economy of over $16 trillion is nonetheless depicted by the media as a cliff. In actuality, it could be more like taking a step down the stairs rather than falling off a cliff. Even if the federal budget cuts and end of the Bush tax breaks in 2013 would not in themselves drive the U.S. economy off the cliff into an economic abyss, the assumption of economic Armageddon could build-up downward momentum to something even far worse than a return to recession. The culprits are those in business, government and the media who were engaging in a series of steadily loud exaggerations. It could justifiably be asked, what’s the difference?

 J.P. Morgan led banks in bailing out Wall Street in 1907.  Source: Upsidetrader.com

The full essay is at "CEOs Warn the U.S. Government: No Fiscal Cliff!"

Off-Shore Drilling off Virginia’s Coast: The Stakeholder Framework Applied

By the early 1990’s, the U.S. had banned drilling off the Atlantic coast. In the wake of BP’s deep-water-drilling disaster in the Gulf of Mexico in 2010, President Obama cancelled his go-ahead of drilling leases off Virginia’s shore. A few years later, Doug Domenech, the Secretary of Natural Resources in Virginia, and that republic’s head of state, Bob McDonnell, teamed up with Virginia’s two delegates in the U.S. Senate to “put Virginia’s coast on the energy map through an act of Congress.” Domenech said, “I personally believe that the East Coast of the U.S. does have the ability to be the prolific economic basin.” The Bureau of Ocean Energy Management estimated based on two-dimensional seismic surveys that 3.3 billion barrels of recoverable oil exist under the Atlantic’s outer continental shelf and 31.1 trillion cubic feet, or 886.3 million cubic meters, of natural gas. However, the executive arm of the U.S. Government alone is more than that bureau. Moreover, lest this conflict over drilling be viewed as primarily between Virginia and the U.S. Government, it should be noted that the East Coast is not exclusive to Virginia.

 

Respecting the integrity (i.e., valid claims) of both frameworks requires integrity, or self-discipline.   Worden 

The full essay is at "Drilling Off-Shore: Strategic and Societal Leadership Applied."

Mark Zuckerberg: Facebook’s Unjust Strategic Leader in a Crisis

Mark Zuckerberg, founder and CEO of Facebook (and Instagram) “remained silent” during the two days after the data-breach scandal broke in March, 2018 as E.U. and U.S. lawmakers “pummeled Facebook and its stock price” dropped 9 percent.[1] The company lost $50 billion in market value in just those two days![2] Beyond the self-interested investors and the demoralized employees, the company’s 2 billion users—the suppliers of the raw content (to be mined as well as shared)—and the world (i.e., societal level) looked for ethical (i.e., atoning as well as protective) leadership from the company’s CEO. To be just, I submit, the leadership could not have been a mere reflection of Zuckerberg’s or Facebook’s immediate self-interests.

The full essay is at "Leadership Lacking at Facebook."

Employees look for leadership in the midst of a demoralizing crisis. (USA Today)

See the essay, "Facebook: A Distrustful Company."

See also the booklet, Taking the Face off Facebook

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1. Jessica Guynn, “As Facebook Reels from ‘Catastrophic Moment’ in Cambridge Analytica Crisis,” Mark Zuckerberg Is Silent,” USA Today, March 21, 2018.

2. Kevin Roose and Sheera Frenkel, “Missing From Facebook’s Crisis: Mark Zuckerberg,” The New York Times, March 21, 2018.

Presidential Leadership

In the wake of the failure of the joint congressional committee that was tasked with coming up with a proposal to reduce federal deficits over a decade by $1.2 trillion, Michael Bloomberg, mayor of New York City, said at a news conference, “It’s the chief executive’s job to bring people together and to provide leadership. I don’t see that happening.” The mayor may have been wrong. Take the word executive: literally it is to execute, or implement, which implies management rather than leadership. Put another way, implementation depends on a goal already established, presumably by a leader. To lead is to formulate a vision of social reality that is an ideal, and thus consisting of goals rather than actualities, and then to persuade others to accept that social reality. Once the directionality is established, the means, or strategies, can be executed by managers (i.e., those who manage the implementation).

The full essay is at "Presidential Leadership."

A European Utility Re-Envisioning Energy: An Opportunity for Visionary Leadership

When Eneco began a business called CrowdNett in which the company would sell large home-batteries to people having solar panels, the Dutch electric utility was on the way toward putting its electricity-production business out of business. The company would continue, though radically transformed. The strikingly different strategic-course correction was based on a rather unique vision of a novel social reality in which homes generate their own energy and then some. In the context of climate change and accumulating carbon dioxide in the atmosphere, Eneco’s CEO had an opportunity in 2017 to lead not only organizationally, but societally as well by promoting the radical social reality already envisioned.

The full essay is at "Re-Envisioning Energy."

For more on visionary leadership and management, see The Essence of Leadership: A Cross-Cultural Foundation, available in print and as an ebook at Amazon. 

Strategic Leadership: Disentangling Strategy and Leadership

Strategic leadership relates an organization’s differentiated core competencies to its ideologies, identity, mission and view of the macro environment system. Relates implies that strategic elements are not identical with a vision containing values. In fact, a tension can be involved, as interest applies one way to core competencies and another to the social reality that a leader promotes in line with an organizational mission (and identity). For one thing, the basis of a competitive advantage can be rather limited temporally, due to technological changes, for example, while values espoused are presumably long-lasting in their validity and thus not easily changed. 

Ethical leadership as a means of managing strategic leadership (Worden, 2003a and 2003b)   
   

 Material from this essay has been incorporated into The Essence of Leadership: A Cross-Cultural Foundation, which is available in print and as an ebook at Amazon. 

Taoist Business Leadership

Leadership from the standpoint of Taoist teachings is paradoxical or even oxymoronic in nature. A leader intending to apply the teachings should therefore be willing to tolerate the co-existence as apparent opposites, or at the very least be willing to lead in ways not typically thought to be consistent with leadership. If this seems too taxing, one might consider the potential benefits. For one thing, leading in unanticipated and unusual ways may give one a sustainable competitive advantage both in terms of alternative leaders below and competitors leading other organizations. Put another way, going down the rarely trodden path opens one up to being able to use something of value unknown to other people. One could “corner the market” on that asset.

Material from this essay has been incorporated into The Essence of Leadership: A Cross-Cultural Foundation, which is available in at Amazon.