Putting Leadership Back into Strategy by Cynthia A Montgomery - Essay Example

Answer The article ‘Putting Leadership Back into Strategy’ by Cynthia A Montgomery is highly illuminating and brings forth some interesting and very relevant issues of business leadership into focus. The business goals and managerial strategies have been perceived differently and given a wholly new dimension by the business school curricula. The well articulated article emphasises the need for leadership perspectives within the wider goals and objectives of the business paradigms. While maintaining the competitive advantage through strategic planning has become the primary goal of the companies, the author has asserted that the changing times require more dynamic strategic goals to meet the emerging new challenges. The author states, "It (strategy) has become more about formulation than implementation and more about getting the idea right at the outset than living with strategy over time...strategy must be a dynamic tool for guiding the development of a company over time". In the past, business strategy involved analytical problems to be solved. The strategist was concerned with the analysis and solution of concurrent and anticipated problems within the given business parameters with defined goals and objectives. The wider ramifications of the problems and the emerging new challenges, in the form of new opportunities and threats were not considered vital factors for the sustainable development of the organization over time. Hence the business strategy remained a constant that was designed to achieve the static business objectives my maintaining a competitive edge over their rivals. The example of Apple computers is a scintillating case in point. In the highly volatile business environment of rapid computerization in 1990s, the company stubbornly refused to redefine its business strategy and continued to produce high-end computers for segmented market. Consequently, company’s market shares plummeted to 3% in 1997 and the company had to undergo huge transformation under the leadership of new CEO. In a short period, it had regained its position in the market and made significant inroads into new areas of digital audio players, mobile pones and retailing. The new CEO showed exemplary leadership initiatives in widening its business vision and strategic goals to maintain competitive advantage. Montgomery’s assertion that strategy needs to be dynamic to encompass the changing paradigms of the times is not only relevant but essential in the contemporary environment of competitive business. CEO is the principal strategist with leadership traits who strives to create value based mission and vision of the company that evolve with changing times to incorporate the changing preferences of the people. Discussion of leadership with reference to large organization is as important as that of small one for the simple reasons that the leaders within the organizations, not only provide an intangible stability among the employees and facilitate integration with the system, but they have been known to promote collective vision of the organization and provide the necessary impetus to the employees to strive towards it. Today the equation seems to have changed and ‘we approach managerial leadership as a relational, ongoing social construction process rather than as a single clear cut phenomenon’ (Sjostrand and Tyrstrup, 2001). Answer 2 The three current views of strategies; RBV, strategic position and emergent theory fundamentally agree with Montgomery in pursuing strategic leadership which can incorporate the changing trends of the evolving business compulsions. Resource based View (RBV) strategy can be broadly defined as ‘all assets, capabilities, organisational processes, firm attributes, information, knowledge, etc. controlled by a firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness’ (Barney, 1991). The widely distributed resources enable the organization to incorporate the changing environment and maintain a competitive edge over their rivals. Hence, RBV intrinsically takes into account the ideas of Montgomery. Theory of strategic position entails creation of value based products and services that have their own niche market. Since business primarily deals into products and services that benefit people in some way or the other, people become the most important factor in the business strategies. A good strategist always tries to exploit the personal preferences of the persons to influence his behavior as a consumer of goods and services that he wishes to sell. Differentiating elements of the products and services create value that helps the company to maintain niche market position within the industry. Montgomery is also explicit in her assertion that organizations must have ‘unique added value’ that would give them an edge over their competitors. Emergent theory emphasizes the need to exploit the informed choices, gained through the accumulated knowledge regarding the changing trends and preferences of the people and market conditions. According to Slater and Narver, markets thrive on the processes of the learning organization which ‘continuously acquire, process, and disseminate throughout the organisation knowledge about markets, products, technologies, and business processes’ (Slater and Narver, 1995). The new leadership encourages creativity and innovative practices that give a unique perspective to participatory approach of management and employees. Effective leadership recognizes the dissimilarities of approaches and initiatives that different organizations adopt. While studies have shown the disastrous ramifications of blindly following strategies and planning processes of successful companies by new ventures, the need to recognize the inherent differences in policy framework, has become vitally important. Christensen and Raynor say that companies fail because they tend to follow the theoretical models and assumptions, without making any efforts to alter those models to suit their parameters and value system (Christensen and Raynor, 2003). The motivating factor of managerial leadership that facilitates adaptability to changing equations, have another very important attribute of recognizing the wide scope of emerging opportunities. The empirical relationship of leaders and the emerging changes are critical for a given situation and therefore, good managerial leadership demands a better informed leader who is capable of taking initiative and at the same time, he is also able to inculcate confidence in his people to move forward. As the Sjostrand and Tyrstrup reaffirm ‘leadership is all about managing creativity’. One can therefore conclude that all three views of current strategies conforms with the ideas of Montgomery who firmly believes in strategic leadership that evolves with the fast transforming needs of the emerging new business imperatives. One needs to accept the challenge of creating a cohesive and encouraging atmosphere and leaders, within and outside the organization, facilitate the acceptance of the changes in a smooth manner. Indeed, the compulsions of emerging globally competitive business environment is having an effective leadership that encourages innovative business strategies and creative practices to overcome the challenges of fast changing technologies and dynamics of economy. Reference Barney, J. B. (1991). "Firm Resources and Sustained Competitive Advantage". Journal of Management, Vol. 17, No 1, pp. 99-120. Christensen, Clayton M and Ranor, Michael E. (2003). Why hard-nosed executives should care about management theory. Harvard Business Review. September. pp. 67-74. Montgomery, Cynthia A. (2008). Putting Leadership Back into Strategy. Harvard Business Review, January. Sjostrand, S and Tyrstrup, M. (2001). Recognized and unrecognized managerial leadership, in invisible management – The social construction of leadership. S Sjostrand, J Sandberg and M Tyrstrup (eds.). Thomson. pp 1-27. Slater, S. and Narver, J.C. (1995). Market orientation and the learning organization. Journal of Marketing, Vol. 5, No. 3, pp.63–74. Read More