Culture and Leadership in Managing Strategic Change

Implementing and Executing Strategy

BUILD A STRATEGY-SUPPORTIVE BUILD A STRATEGY-SUPPORTIVE CORPORATE CULTURECORPORATE CULTURE

What Makes Up a Company’s Culture? Where Does Corporate Culture Come

From? How Is a Company’s Culture Reinforced? What Forces and Factors Cause Culture

to Evolve?

Culture and Strategy Execution:Ally or Obstacle?

Culture can contribute to -- or hinder -- successful strategy execution

Requirements for successful strategy execution may -- or may not -- be compatible with culture

A close match between culture and strategy promotes effective strategy execution

Why Culture Matters: Benefits of a Good Culture-Strategy Fit

Shape mood and temperament of the work force Provide standards, values, informal rules and peer

pressures Strengthen employee identification with the

company, its performance targets, and strategy Stimulates people Optimal condition: A work environment that

Promotes can do attitudes Accepts change Breeds needed capabilities

Types of Corporate Cultures

Strong vs. Weak Cultures

Unhealthy Cultures

Adaptive Cultures

Strong vs. Weak Cultures Characteristics of a Strong Culture How does a Culture become Strong?

Leader who establishes values A deep, abiding commitment to espoused

values and business philosophy Genuine concern for well-being of

Customers, Employees, Shareholders Characteristics of a Weak Culture

Unhealthy Cultures

Characteristics of Unhealthy or Low performance Cultures Politicized internal environment Hostility to change Promotion of managers more concerned

about process and details than results Aversion to look outside for superior

practices

Characteristics of Adaptive Cultures Introduction of new strategies to achieve superior

performance Strategic agility and fast response to new

conditions Risk-taking, experimentation, and innovation to

satisfy stakeholders Proactive approaches to implement workable

solutions Entrepreneurship encouraged and rewarded Top managers exhibit genuine concern for

customers, employees, shareholders, suppliers

Diagnose which facets of present culture are strategy-supportive and

which are not

Talk openly about why aspects of present culture need

to be changed Follow with swift, visible actions to

modify culture - include both substantive and symbolic actions

Creating a Strong FitBetween Strategy and Culture

Culture-Changing Actions

Types of Culture-Changing Actions

Symbolic Culture-Changing Actions

Substantive Culture-Changing Actions

Value Statements/Codes of Ethics Training programs Applicant screening Communication Management involvement and oversight Strong endorsement by CEO Word-of-mouth

Instilling Values and Ethics in the Culture

Building a Spirit of HighPerformance into the Culture Emphasize achievement and excellence

Promote a results-oriented culture

Pursue practices to inspire people to excel

Approaches?

Management Practices?

Strategic Leadership

What Roles may a Strategic Leader take?

Strategic Leadership: Leadership Roles of the Strategy Implementer1. Stay on top of what’s happening 2. Promote a culture energizing organization

to accomplish strategy3. Keep firm responsive to changing

conditions4. Exercise ethics leadership5. Take corrective actions to improve overall

strategic performance

Role #1: Stay on Topof What’s Happening Develop a broad network of formal and

informal sources of information Talk with many people at all levels Be an avid practitioner of MBWA Monitor operating results regularly Get feedback from customers Watch competitive reactions of rivals

Role #2: Foster aStrategy - Supportive Culture Successful leaders spend time convincing

organizational members, nurturing values, building a culture

Role in matching culture to strategy Implement a “stakeholders-are-king” philosophy Challenge status quo with very “basic” questions Create events where all managers must listen Energize employees to make new strategy happen Initiate substantive actions to reinforce desired cultural

traits Reward people exhibiting desired cultural norms

Role #3: Keep InternalOrganization Responsive Promote openness to fresh ideas Pursue attractive new opportunities Support people who are willing to champion Promote continuous adaptation to changing

conditions Build new competencies and capabilities

Role #4: Exercising Ethics Leadership Display unequivocal commitment to ethical and

moral conduct Encourage compliance and establish tough

consequences for unethical behavior Make it a duty for employees to Observe ethical

codes and Report ethical violations Manager’s role in exercising ethics leadership Key approaches to Enforcing Ethical Behavior Actions demonstrate corporate citizenship and

social responsibility

Role #5: Lead the Process ofMaking Corrective Adjustments Requires both

Reactive adjustments

Proactive adjustments

Involves

Reshaping long-term direction, objectives, and strategy to unfolding events

Promoting initiatives to align internal activities and behavior with strategy

Transformational Leadership

“The Leadership Challenge” Practices

Model the

Way

Inspire a Shared Vision

ChallengeThe

Process

Enable OthersTo Act

EncourageThe Heart

IdealizedInfluence

IndividualizedConsideration

InspirationalMotivation

IntellectualStimulation

Transformational Leadership