Discussion: The Strategic Compass

Week 1:

What is the difference between “Strategic Leadership” and “Strategic Management”? Using an actual organization in which you now work – or have worked previously – give several examples as to how the processes differ.

Week 2:

How does the Five Compass Model (see Wilson’s 1996 article included in the Background readings) inform our understanding of “Strategic Leadership” generally, and the role of top leadership in setting the long-term strategic direction of an organization more specifically?

Module 1 – Background

THE STRATEGIC COMPASS

Part 1: The Nature of Strategic Leadership (as distinct from Strategic Management)

There is a very clear distinction between Strategic Management and Strategic Leadership, both in terms of scope and in terms of who is responsible. The Strategic Management process is concerned not only with establishing the purpose of the organization and with strategic choice (as is true of Strategic Leadership), but also with the management of a strategy or strategies. The management of organizational strategy is accomplished through a variety of implementation control systems, including policies and procedures, rules, budgets, and organizational structure. Note that in the Strategic Management process, both leadership and management have roles to play at various stages of the overall process. In contrast, the Strategic Leadership process is concerned solely with the scope of authority, responsibilities, and activities of an organization’s top leadership as they relate to strategy. In this context, therefore, we will concern ourselves with those activities that are specifically within the purview, authority, and responsibility of the organization’s top leadership.

This is by no means to suggest that top leadership is not concerned with implementation and control systems that must be put in place in order to ensure the success of a chosen strategic direction. Top leadership is inherently interested in (and is quite highly concerned with) the proper implementation and monitoring of strategy. The focus of this course will be on those activities that primarily concern top leadership, to include the following: Establishing the organization’s purpose by means of vision, mission, and values statements made explicit; establishing the system of values within which everyone in the organization must operate; formulating an organizational culture that best fits strategic choice; and selecting a grand strategy (or set of strategies) that fit the organization best – and that should consequently be pursued over the longer term.

Required Resources

Begin by viewing the following video. Note that choosing the right strategy (a top leadership activity) and implementing that strategy (which is very clearly a management function) are both critical to strategic success. The organization must get both of these activities right: Implementing a bad – or ill-fitting – strategy makes no sense; nor does it make sense to choose the perfect strategy, only to execute that strategy poorly and have it fail:

Blumentritt, T. (2015, April 24). Introduction to strategic management. Youtube. Retrieved from https://www.youtube.com/watch?v=DB90xGiWHIA

The following short video is also a worthwhile introduction to the strategic planning/strategic management process (these terms are often used interchangeably). As you watch this short video, consider which activities/steps are management-oriented (e.g., setting of short-term goals, implementation), and contrast those that are the central responsibilities of leadership (setting the organizational vision, for example):

Olsen, E. (2012, September 5). Overview of the strategic planning process. Virtual Strategist. Podcast retrieved on April 29, 2014, from http://www.youtube.com/watch?v=sU3FLxnDv_A

Part 2: The Nature of Strategic Leadership and Strategic Thinking

While it may seem obvious, it should also be made explicit: The hallmark characteristic of great strategic leaders is that they are skilled strategic thinkers. Begin this section by reading the following article, in which the role of top leadership in the determination of strategy is discussed, and the concept of “Strategic Leadership” is defined and contextualized:

Bass, B. M. (2007). Executive and strategic leadership. International Journal of Business, 12(1), 33-52. Retrieved from ProQuest on October 26, 2013.

Reed, G. E. (2009). Chapter 4: Systems thinking and senior leadership. In M. R. Grandstaff & G. Sorenson (Eds.), Strategic leadership: The general’s art. [Books24x7 version] Available from http://library.books24x7.com.ezproxy.trident.edu:2048/toc.aspx?bookid=29979

McKeown, M. (2012). Strategic thinking: The difference between a leader and a manager. [Books24x7 version] Available from http://library.books24x7.com.ezproxy.trident.edu:2048/toc.aspx?bookid=49479

Part 3: Establishing the Organization’s Direction: Vision and Mission

Having defined Strategic Leadership and Strategic Thinking, turn to the first step that top leadership must play in strategy: defining the purpose of the organization. Top leadership does this through the vision and mission. The vision is futuristic, communicating what the organization aspires to become. In contrast to the vision statement, the mission statement conveys the present state of the organization. It explains the reasons that the organization exists, and makes explicit what the organization does (e.g., describing what it sells, defining its customers).

The following journal article is an excellent discussion of the vision and mission:

Cady, S. H., Wheeler, J. V., DeWolf, J., & Brodke, M. (2011). Mission, vision, and values: What do they say? Organization Development Journal, 29(1), 63-78. Retrieved from ProQuest.

The Free Management Library is an excellent introductory resource for most business-related topics. Read the basics of developing meaningful vision and mission statements:

McNamara, C. (2000). Basics of developing mission, vision, and values statements. Free Management Library. Retrieved on April 29, 2014, from http://managementhelp.org/strategicplanning/mission-vision-values.htm

Finally, Williams’ article offers an excellent and quite thorough overview of mission statements, their scope, and suggested content:

Williams, L. S. (2008). The mission statement: A corporate reporting tool with a past, present, and future. Journal of Business Communications, 45(2), 94-119. Retrieved from EBSCO.

Optional Resources

The following Strategy and Leadership article serves as the foundation for this course. While the journal article is dated, its theoretical contribution for today’s organizations remains clear:

Wilson, I. (1996). The 5 compasses of strategic leadership. Strategy and Leadership, 24(4), 26-31. Retrieved from ProQuest.

The Ivey Business Journal Online, authored by Rowe and Nejad, is an excellent source of content related to leadership and strategy. The article defines what is meant by “Strategic Leadership,” as well as the central characteristics and qualities of strategic leaders:

Rowe, G., & Nejad, M. H. (2009). Strategic leadership: Short-term stability and long-term viability. Ivey Business Journal Online. Retrieved on April 29, 2014, from http://iveybusinessjournal.com/topics/leadership/strategic-leadership-short-term- stability-and-long-term-viability

Change is a constant. In this short video, Strategic Leadership is framed within the notion of discontinuity:

Strategic Leadership: Embracing Change (2012, March 23). Cal Miramar University. Podcast retrieved on April 29, 2014, from http://www.youtube.com/watch?v=aPIqJbLjNbM

For a current (21st century) perspective on strategic leadership, download this superb article, written by Hitt et al:

Hitt, M. A., Haynes, K.T., & Serpa, R. (2010). Strategic leadership for the 21st century. Business Horizons, 53, 437-444. Retrieved on April 29, 2014, from: http://ssrn.com/abstract=1995786

Finally, the following articles provide excellent overviews of Strategic Leadership theory and research in general. Crossan et al. discuss the means by which strategic leaders work within today’s dynamic and ever-changing environments. Note the authors’ emphasis on the changes that have occurred within organizations (change is not solely external to the organization), in addition to the authors’ position as to how transcendental leadership relates to the notion of strategic leadership:

Boal, K. B., & Hoojiberg, R. (2000). Strategic leadership research: Moving on. Leadership Quarterly, 11(4), 515-549. Retrieved from Science Direct.

Crossan, M., Vera, D., & Nanjad, L. Transcendent leadership: Strategic leadership in dynamic environments. Leadership Quarterly, 19 (5), 569-581. Retrieved from EBSCO.