Developing Effective Srategic Leadership - Term Paper Example

Strategic leadership Name (Institution) (Module) (Course) (Tutor’s Name) 2nd Feb 2010 Table of contents Abstract 1.0 Introduction ……………………………………………….... 4 2.0 Literature review ……………………………………………. 5 3. 0 Action plan for the creation online electronics retail outlet branch for CostCutters ………………………………….... 8 3.1 Brief …………………………………………………….…... 8 3.2 Steps …………………………………………………….…... 8 3.3 Development of goals and objectives……………………...… 9 3.4 Timescale …………………………………………………… 10 3.5 Roles and responsibilities of the leadership team ………….. 12 4.0 Conclusion and recommendations ………………………….. 12 Works cited Abstract The turn of the new millennium about nine years ago pushed corporations into finding out new ways to survive in the new market challenges and opportunities presented with the excitement of a new millennium. While this excitement has fizzled out, there is more need to handle competition and the challenges that seemingly haven’t fizzled out. Competition has become more complex, challenging, and packed with competitive opportunities and aggressive threats. To survive these challenges and utilize the opportunities there is urgent need for strategic thinking and leadership practices that will enhance a firm’s performance and achieve its desired goals and objectives both in the short term and long term. Technology in this modern era cannot be ignored, for firms ready to adapt technology it presents an enormous growth opportunity while still presenting a challenge in effecting change in an organization. The purpose of this paper is to discuss the necessities in developing effective strategic leadership through strategic thinking and highlighting several models and theories developed by different authors that Costcutters can apply in introducing a new electronics online retailing store. If the firm fully develops strategic leadership practices in this project, then it can be a source of competitive advantage. 1.0 Introduction It has often been said that the modern day corporations have given so much weight to management ideals forgetting leadership ideals. Consequently, many of these corporations have been performing below their potential in terms of profits, sales, growth, shareholder value, market share etc. This is on the backdrop of the fact that business consultants view management/managers and leadership/leaders to be both important in an organization but different. It is imperative that every organization has its own unique leaders, culture and needs which are a requisite for the formation and development of an effective and realistic leadership development plan. The leadership must take into consideration the impact that the decision in the plan will have on the organization as a whole. Therefore, leaders must at all times in their strategic thinking capacity use the information that best suits the organization and employ the necessary tools to address specific organizational needs and culture. This must also be aligned to the organizations vision and mission. A number of theories and models have been developed by business consultants and the business academicians on the best ways to develop a strategic development plan and on how to attain strategic thinking that is a prerequisite for the plan. Majority of these models emphasize on the principle of converting strategic leadership into a competitive advantage as only then can an organization achieve success as it can handle competition and other challenges in the market. Leadership is most evident during transition, succession or during the initiation of a new project. In this case, the paper studied the introduction of an online retailing outlet for the Costcutters. The firm is best established in retailing general consumer merchandise and its brand is associated with affordability and convenient locations of the over 1600 stores in the UK. 2.0 Literature review The leadership development plan is an initiative of the organization’s leadership whether a board of directors or the executive management. However, it should not be relegated to the management as the management is focused on running of tasks rather than the long term success of the company. Organizational consultant Warren G. Bennis in one of his books said that There is a profound difference between management and leadership, and both are important. To manage means to bring about, to accomplish, to have charge of or responsibility for, to conduct. Leading is influencing, guiding in a direction, course, action, opinion. The distinction is crucial (Bennis, 2009, 26). From Bennis’ (2009) statement, it is obvious that leaders play the head role while managers run the business processes of that particular organization. This leads to a differentiation between management and leadership. Yukl (2009) says that leadership is a process whereby intentional influence is wielded by one person or a group over other people to guide, makeup, and facilitate activities and relationships in a group or organization. A manager on the other hand is charged with the role of managing tasks and ensuring that business processes run appropriately and that organizational goals and objectives are achieved. Therefore, a leader deals with the people element in an organization. A manager of the other hand is involved in overseeing that the tasks and objectives laid out by the leadership and ensuring that they are attained. In short, the manager solves short term problems within the organization while a leader has a more long term vision for an organization by drafting the way. The leader thus drafts a general direction for an organization while a manager works on the details and push for the upholding of the way forward as per the plan (Yukl 2008). Yukl (2009) says that organizations need both leaders and managers to achieve success. Therefore, for Costcutter, there is need for leadership to daft and plan for the new project while the management will handle the details of the various tasks involved. Moreover, success cannot be attained just because a few senior employees are labeled as leaders and others managers; no they have to lead and manage strategically through strategic thinking. Ireland and Hitt (2005, 63) define strategic leadership as “a person’s ability to anticipate, envision, maintain flexibility, think strategically, and work with others to initiate changes that will create a viable future for the organization.” When this is attained and practiced in a manner that competitors cannot imitate, then a firm creates its own competitive advantage. Strategic thinking therefore is something that every corporation is looking forward to achieve. But how do these companies attain this? Theories in leadership development are categorized into charismatic, transformational, visionary, cognitive and behavioral (Boal & Hooijberg 2001). These are totally different from the supervisory theories (e.g. path goal and contingency) which are more related to the managers’ role of overseeing tasks. These strategic leadership theories focus on the importance of strategic thinking in an organization. Ireland and Hitt (2005) say that the performance of an organization is a reflection so the strategic thinking capacity of its leadership. In addition, “…..the specific knowledge, experience, values and preferences of top managers are reflected not only in their decision, but in their assessments of decision situations” (Ireland and Hitt, 2005, 65). Boal and Hooijberg (2001) on the other hand say that strategic thinking does not come into play always but rather argue that there are specific instances when strategic thinking and leadership are needed. They say “if leaders mistakenly believe they have discretion when they do not, then actions are likely to be met with resistance and failure. Only where objective and perceived discretion are congruent is success likely” (Boal & Hooijberg, 2001, 519). Leadership is most needed when there is freedom of choice in decision making and is a period free from technical goals and methods (Boal and Hooijberg 2001). Burgelman and Grove (1996) as cited in (Boal & Hooijberg, 2001) talk of timing in what they refer to as Strategic Inflection Points (SIP) caused by environmental changes that require leaders to strategies and draft new direction for organizations. For Costcutter, the need to explore a new market and moves towards online shopping as a global phenomenon is the current SIP. The same case applies to personal life where some certain independent occurrences either present new opportunities or threats of which one has to react to in order to seize the opportunities or tackle the challenges. But how does one recognize these SIP’s? Boal & Hooijberg (2001) suggest that it requires one to have absorptive capacity to understand the potential of that SIP and making use of the opportune moment to make the best out of it. The lifecycle model explains the issue of succession in an organization or the transition and reaction after a SIP. Therefore, this model suggests that leadership will not be constant over time but rather undergoes several phases. There are five recognized phases or patterns in leadership as honeymoon, learning curve, constant, random and null. A number of authors recommend that the honeymoon stage should explain the compatibility of the leader and the organization incase of a succession or any SIP (Burgelman and Grove 1996; Boal and Hooijberg, 2001). A situation where the organization’s strategy and the characteristics of the leader do not match implies that the leader will be fired as opposed to changing the organization in order to fit the characteristics of the leader. In private small businesses however, entrepreneurs who also serve as leaders of their businesses tend to alter business characteristics to suit their character instead of the other way round. Again, this may also happen to individuals in planning for personal lives where they cannot change but rather have to adapt. 3.0 Action plan for the creation online electronics retail outlet branch for CostCutters 3.1 Brief Costcutter is a retail chain store located in the UK specialized in stocking discounted consumer products. The store, based in York, has 1,600 convenience stores throughout the UK spread out evenly to target all levels of income earners. Virtually, the retail store is planning of expanding its market reach by reaching out to the online market through specialized offer of electronics only. The launching of the online electronics store is meant to complement in-store sales and also explore the opportunity presented by the invention of the internet and increased acceptance of online shopping by consumers for electronic goods. Reports and surveys have indicated that skepticism towards online shopping on the side on consumers is gradually subsiding and it is on the backdrop these reports that Costcutter is launching its online purely electronics store on http://www.costcutter.com. This whole process requires efficient leadership to guide the process through and ensure its sustained performance. 3.2 Steps Integration of the store utilities with the in-store facilities through Creation of a website for retail shopping Creation of a position for the head of online sales Establishment of one warehouse from which all supplies and deliveries will be handled Informational meeting with the staff 3.3 Development of goals and objectives 1. Establish online sales to cater for 10% of our total sales and boost revenue by 15% in the first one year. 2. Items available for chosen for online retailing shall to be value at £40 or more. 3. Delivery charges shall be set according to distance with deliveries within London City being 5% of the value of the item(s) delivered. Smart goal Tasks Website creation Registering domain name Identifying and hiring graphic designer to create the webpage Outline content of the web Assign volunteers to maintain it Creation of a head of online sales position and hiring of additional employees Draft duties, roles and responsibilities Locate position within the organizational chart Identify the qualifications for the post Set remuneration and benefits Liaise with HR to recruit both the head of online sales and other facilitating employees Informing employees Inform employees of the new development Training employees on the handling of change process Creation of new work schedule Creation of the online electronics division Inclusion in the organizational chart Redrafting of the organizations goals and objectives While this plan is contained in the company’s growth and expansion strategic plan, there is need for a more specialized plan to foresee the full introduction and running of the new plan. This implies that the overall strategic plan for the company has to be updated to recognize the new developments. With a strategic plan future leadership needs will be recognized and addressed. In the simplest terms, this new strategic plan will be included in the shared vision of what the organization will look like in the future. From this visualization, only when can the organization leadership can strategize and ‘see’ what the organization will look like some few years to come. 3.4 Timescale Action Time Assessment Website creation 1 week Presentation and approval to the leadership team One week trials with employees One week trail in the market Creation of a head of online sales position 3 weeks Interviews for the position Hiring of most appropriate candidate Probation of the final employee Launching of the program One week Online advertising Print and other forms of media advertising Launching party attendance The plan shall kickoff by registering the domain. While this may look premature, it is necessary since it is the website brand that the firm will be seeking to market and integrate into the company in the whole process rather the particular products or the Costcutter brand; the website itself is the product. While this initiative marks a transition period n the company, the company must be strategically positioned to manage change. Yukl says that organizational leadership other than management is best suited in managing change in organization. Leadership is a process that requires teamwork and commitment both by the leader and his people (Yukl, 2009). Given that a leader leads the people and influences them towards achieving given objectives and organizational goals, he must foster a teamwork spirit and not the master-subject relationship between him and his followers (Yukl, 2009). Kotter (1999) emphasizes that leaders do not have subjects but followers. A leader must show industry awareness at all times in order to guide an organization through the challenges of the industry and competition. He thus must be fully aware of the situation in the organization and the industry at large. A leader therefore ought to be flexible enough to adapt to new developments in the industry. Leaders are thus responsible for instilling change in an organization (Yukl, 2008). The need to succeed, improve shareholder value, create wealth for Costcutter’s online electronic store is the motivating factor that will push the leadership team to apply the best of their knowledge and skills in achieving set goals. Cohen (1998) says that leaders are not conditioned to financial motivation but rather are motivated by the need to meet set goals. He says that people serving in the leaders’ position are more focused on making their responsibility a success and their efforts are geared towards performance. Therefore, this project requires that the team does not receive bloated allowances for the meetings but according to Cohen (1998), the pay should remain the same despite the added responsibilities. 3.5 Roles and responsibilities of the leadership team It is necessary to have each team member understand his or her role in order to allow timely accomplishment of all tasks. Goal Team leader team member team member team member team member role A B C D Shortlist graphic designers Highlight required qualifications for graphic designer Highlight required qualifications for graphic designer “ “ Informing employees Write program Prepare draft Explain main points Collect views and feedbacks from employees Research on competitors information from employees Compile data collected The team has to collect and prepare the implementation of the new program taking into account that organizational goals have to be reflected in the new enterprise goals. The new enterprises will be evaluated on a regular basis and make sure that the time plan is adhered to and that the set gal s ad objectives are attained. Failure to achieve may imply that the leadership has failed to be flexible enough hence may be disbanded and a new leadership outfit set up. 4.0 Conclusion and recommendations The new project requires leadership that does and operation that does not inhibit or limit other operations of the firm. The new project for the firm will be operated on attesting mode with a further action plan developed for expansion and necessary corrections. Incase the firm will have to disband the leadership team, another team will be set up which will have to undergo the same process. However, succession and transition from one leadership to the other are some of the most significant factors that affect leadership. Therefore, the firm has to make sure that the element of continuity is always maintained when switching from one leadership to the other. The creation of checks and balances for the new enterprise must not involve the team. This is in consideration of the fact that the team might somehow overlook critical issues in the initial stages. It is therefore paramount that external auditors are involved in the valuation process. This eliminates bias from the team and ensures the survival of the enterprise through adequate and sensible leadership. . Works cited Bennis, W. (2009). On becoming a leader: the leadership classic. New York: Basic Books Boal, K. & Hooijberg, R. (2001). Strategic leadership research: moving on Cohen, W. (1998). Business Is Not War, But Leadership Is Leadership. Retrieved online on 23rd Feb 2010 from, http://www.allbusiness.com/specialty-businesses/740068-1.html Ireland, R. & Hitt, M. (2005). Achieving and maintaining strategic competitiveness in the 21st century: The role of strategic leadership. Academy of Management Executive, 2005, Vol. 19, No. 4. 63- 78 Kotter, P. (1999). John P. Kotter on what leaders really do. New York: Harvard Business Press Murphy, J. (2010). The Value of Military Leadership Experience in Turbulent Business Environments. Retrieved online on 23rd Feb 2010 from, http://www.sooperarticles.com/business-articles/human-resource-articles/value-military-leadership-experience-turbulent-business-environments-27920.html Yukl, G. (2009). Leadership in organizations. New York: Prentice Hall Yukl, G. (2008) The Importance of Flexible Leadership. Retrieved on 29/01/10 from, http://www.kaplandevries.com/images/uploads/Importance_of_FL_SIOP08Yukl.pdf Read More