Leadership, Innovation and Change - Essay Example

Leadership, Innovation and Change Introduction The value of leadership in improving the performance of companies in the market has been the focus of many researchers in the recent past. This comes during a time when there is increased emphasis placed on the need for leaders to adopt effective leadership styles that can register positive impact in employees. Without doubt, there is a level of influence of leaders and a company’s performance. The roles played by top leaders are fundamental in determining the market position of a company’s product. Considering the fact that top leaders are involved in the development of both corporate and business strategies, their ability to influence market performance cannot be ignored. Whereas there is evidence that leaders and their leadership style can have an impact on the market performance of the company, it is not clear the level of impact involved. Researchers have sought to analyse whether the influence of leaders is an extremely significant contribution to the market performance of a company or whether the critical importance of other factors supersede the role of leaders. A close analysis of the leading 100 companies in 2013 ranked according to the percentage of growth in the market can serve as a basis for understanding how leadership determines the level of market performance exhibited by an organization. This paper will consider this issue in depth. One of the outstanding roles that leaders must perform in an organization I strategic planning. The top leadership in any organization indulges in active planning and development of the leadership strategy, corporate strategy, and the business strategy. The development of these strategies depends on the leaders understanding of the potential strengths and the weaknesses of the company as well as a critical analysis of the possible threats and opportunities. The role of strategic planning is basically to ensure that a company has in place initiatives that promote and utilize its strengths and opportunities while taking measures of handling threats and minimizing the weaknesses. Such strategic planning is impossible if top leaders do not understand both the internal and external environment of the organization. Leaders face the compulsion of ensuring that strategic planning brings together different departments in an appropriate response to both external and internal factors. Moreover, leaders need to be informed on different issues regarding the industry they operate in. They need to understand the ensuing trends and be able to predict what the future holds. The role of leaders is not limited to strategic planning. As a leader must actively ensure that the strategies developed are implemented fully. There is a salient need for leaders to ensure that the significance of people and tasks serve to meet the objectives defined under each strategy (Cherry, Davis, & Thorndyke 2010, p. 40). Experts have identified that strategic planning is very critical in ensuring that a company registers an outstanding performance in the market. Strategic planning helps leaders define new ways of doing things targeting the marketing niches. Notably, each company focuses on having a market niche that it can satisfy with its products and services. If strategic planning is done wisely, a company must identify a specific niche that can be served with unique products and give the company a leading market share. The role of leaders in ensuring that this happens cannot be underestimated. This specifically is because the business strategy of a company determines its market performance directly. Without doubt, a carefully planned business strategy should enable the company to survive by maximizing profits and reducing the costs depending on the industry conditions ('How to "Soar" to Success' 2005, p. 73). This determines whether the business strategy is an effective fit for the existing market conditions. Although employees are actively involved in the productivity of a company, they do so in response to the established business strategies. Leaders decide on the specific business strategy changes that must occur in an effort to adapt to both internal and external changes in the market. This only serves to highlight that leadership does indeed influence the market performance of any company. A close analysis of the leading company listed in the top 100, AussieCommerce Group, reveals that its remarkable growth in the market has resulted from the effective strategic planning carried out by the chief executives of the company, Adam Schwab and Jeremy Same who have been in business for a long time. Their experience has served to increase their awareness of developing unique business strategies that meet specific needs of a target market. Their business strategy focuses on value and reasonable prices. Their distribution channel avoids middlemen, a factor that serves to reduce prices favouring the end consumers. This explains why the company has registered 2765 growths although it has only been operating for 3 years. Without doubt, the contribution of the chief executive officers to the success of the company cannot be underestimated. According to the leadership tips from Adam Schwab, he has been leading by example and has been playing a key role in understanding the market conditions, the needs of the customers and gaining the fundamental knowledge on the existing business culture in the industry. He mentions that his ability to take calculated risks based on his strategic plans has been a core aspect propelling the company to remarkable success. Evidently, he serves as a confirmation that the type of leadership in place and the ability of the leader to carry out effective strategic planning can serve to foster a company’s standing in the market (Hurley 2013, p. 36). In addition, the views of Tristan Sternson, the chief executive officer of InfoReady highlighted that the success of the company is attributable to the strategic planning and the development of a realistic business plan. He opines that there is a need for leaders to indulge in a rigorous research process in an effort to establish a good business plan. The most critical thing that e highlights is the role of leaders to understand the business well, understand the competitors and develop a strategic plan that will keep the company ahead of the competitors. This responsibility is the responsibility of leaders (Smith 2013, p. 36). Leaders who have the capacity and the expertise to make critical decisions during critical times are more likely to propel a company to success. In the case of the Thought World Company, the importance of strategic planning and the development of business strategies during critical times also become very evident. The efforts of Neil Saligrama during the 2009 global economic crisis illustrates the role of leaders in ensuring that a company can define strategies for ensuring that it survives difficult times and emerges a leader in the market. The fact that the chief executive officer was in a position to define strategies of saving the company during critical financial times leading to its outstanding success, making it one of the top ten companies in 2013 serves to reflect the extent to which leadership contributes to the market performance of a company (Roddan 2013, p. 47). In a different case, the efforts made by the leaders of Fusion Power Systems including the chief executive officer Anthony Violi reflect the critical role of leaders in determining the market performance of a company. It is the role of leaders to identify a market niche for the company. Therefore, leaders must carry out research and develop products that target a specific identified niche. The contribution of Anthony Violi in ensuring that the company established a specific niche and indulge in multi-disciplinary activities helped the company to register remarkable growth in the market. With a leadership capable of driving the company to such growth, its success would have proved impossible. Although employees are actively involved in a company’s production, they need directions from the leaders who can develop strategic plans of propelling the business into the success in the market (Freeman et al 2014, p. 124). Recent research has identified that organizational culture is a direct determinant of the performance of a company in the market. In the previous years, it was thought of as an indirect determinant of a company’s productivity and hence its market performance. The type of leadership in place in any organization determines whether the company adopts an appropriate organizational culture. The role of a leader in introducing an effective organizational culture and making sure that all the employees get to adopt that culture is very critical. Organizational culture denotes the values, belief systems, and symbols that determine task completion and people management. Organizational culture is critical in ensuring that the beliefs and values in place conform to the business strategy of the organization resulting in improved performance. There is evidence that poor organizational cultures have caused the collapse of some business giants giving them a bad reputation and contributing to a reduced market share. The top leaders in any organization shoulder the responsibility of introducing an appropriate culture of their organization (Yitshaki 2012, p. 560). Moreover, they must ensure that the culture introduced to promote the corporate strategy, business strategy, and the social responsibility strategies. This is the only way that leaders can ensure that organizational culture contributes directly to the organization’s performance in the market. The existing organizational culture in any company determines whether employees are committed to the company goals, and whether they are motivated to contribute positively to the achievement of such goals. An effective culture serves to ensure that employees can exhibit concerted efforts in achieving the company goals. Moreover, the top leaders of any organization are responsible for determining when to form mergers or partnerships with other businesses. This is usually a critical role of leaders when developing business strategies. Leaders are supposed to understand the emerging market trends and be able to make decisions that can save the company in difficult times or improve its performance remarkably. For example, it is the role of a company’s leadership to determine the appropriate time of merging with another company after a critical analysis of the potential benefits of the merger. Forming mergers has proved to be one of the strategies used by businesses that seek to excel in the market. For example, the chief executive officer of Thought World mentioned above was compelled to form new partnerships during the 2009 economic crisis (Church 2013, p. 73). Evidently, this decision made by the leaders was critical in determining the company’s market performance. The fact that the chief executive officer identified appropriate partners who were willing to share both profits and losses enabled the company to exhibit immense growth. In a case whereby leaders form mergers with other companies without proper consideration of the market situations, the company’s market performance may be negatively affected. Therefore, leadership plays a significant role in ensuring that a company forms the right mergers at the right times. In addition, Planet Innovation led by the chief executive Stuart Elliott registered a growth of 127% emerging in the top ten lists of the leading companies. Elliott attributes such growth to the company’s efforts of understanding partners and practicing a cross discipline approach in bringing in partners who can help in promoting the company’s business strategy. The success of his company has resulted from the inclusion of a diverse range of specialists who have brought in technological expertise. This reveals that the role of leaders in identifying the potential partners directly affects the market performance of the company (Stevens 2011, p. 40). Without doubt, a company’s performance directly related to the level of employee motivation and empowerment. It has been proved through research that managing human resource is the most critical responsibility of any leadership. With the emerging emphasis on the role of transformational leadership, whose main emphasis is ensuring that employees are motivated and empowered, it becomes evident that a leader must fulfill the role of empowering employees. Notably, motivated employees are likely to register remarkably higher performance and productivity. Leaders have a significant role of instilling moral values into employees, ensuring that they are motivated and empowered. Motivating employees enables them to achieve self-actualization (Matzler et al 2008, p. 140). Self-actualized employees have been noted to exhibit high levels of creativity and innovations. It is common knowledge that businesses are relying on innovation and creativity in order to register a remarkable performance in the market. If leaders fail to motivate employees to this level, it will prove difficult to delegate any roles to them. This will cause a barrier to any potential growth. For example, Adam Schwab the CEO of AussieCommerce Group highlighted that ensuring that employees are empowered enough to handle different tasks is a precondition of propelling the company to remarkable success. He emphasizes the need for ensuring that systems of empowering and motivating employees exist in any company so that the human resource capacity can translate to growth (Kumar 2010, p. 69). Notably, leaders have the role of communicating a vision to the employees and leading by example, if employees are to become motivated and empowered. Without doubt, leadership can contribute to market performance in this sense. A close analysis of companies with employees who lack motivation reveals that their market performance has been declining. A successful company must exhibit effective management of its financial assets. In a world whereby businesses are becoming more competitive and the market front is extremely unpredictable, companies need to make wise financial decisions. Research is required prior to deciding to invest in any new project. Company leaders have to take the leading role in making financial decisions. They understand how much the company is worth, and realize the type of financial risks the company can take at any given time. It has been identified that businesses involve risk taking. However, such risks have to be calculated well with the top leaders who understand the potential consequences of any financial risk. Financial decisions may involve venturing into new markets and opening new branches. Evidently, such investments need to be well studied if the company is to register profit in the end. There is a need to balance market conditions, examine the prevailing opportunities that the company can exploit to its advantage and weigh out the potential returns (Yitshaki 2012, p. 563). Most importantly, leaders of companies must carry out a rigorous break-even analysis in an effort to determine whether the company can sustain the costs involved before returns can be registered by the business. Many businesses have failed to do this in the past and have collapsed because of bankruptcy. Since leaders are responsible for financial planning and decision making in the company, they have a direct role in determining its potential performance in the market. Leaders who can make wise financial decisions know when to invest and usually propel companies to success. Conclusion Researchers have identified that leadership has the potential of influencing the market performance of any company. This is because leaders of companies are tasked with different responsibilities that determine the competitive position of the company. The fact that leaders take up the critical role of strategic and financial planning places them in a position to direct the steps of the company. Although the role of the employees and the other factors that affect the market performance are critical, the importance of leaders in determining the direction of any organization cannot be underestimated. From the examples presented above, it becomes evident that the leaders played a significant role in propelling the companies to their current success. Therefore, leadership affects market performances to a great extend. Bibliography Cherry, R, Davis, D, &Thorndyke, L 2010, 'Transforming Culture Through Physician Leadership Development', Physician Executive, 36, 3, pp. 38-44, Business Source Complete, EBSCOhost, viewed 9 October 2014. Church, D 2013, 'Leadership style and organizational growth: A correlational study', Dissertation Abstracts International, 73, 9-B(E), PsycINFO, EBSCOhost, viewed 9 October 2014. 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