Finding the future and making it happen

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Describes how Henry Ford, Alfred Sloane, Ratan Tata, and Carlos Ghson Found the Future and Made it Happen -

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<ul><li> 1. Finding the Future 2010 How Henry Ford, Alfred Sloane, Ratan Tata, and Carlos Ghosn Found the Future and Made it Happen! John Pisapia, Florida Atlantic University1 Every few hundred years in western history there occurs a sharptransformation. We cross. . . a divide. Within a few short decadessociety rearranges itself, its world view; its basic values; its socialand political structure; its arts; its key institutions. Fifty years later,there appears a new world. . . we are currently living through sucha transformation. Drucker, 1993, p. 1ABSTRACTDruckers observation of sharp transformation is well underway and alternatives tothe legacy models of leadership are imperative. In this chapter I employ the coreelements of the strategic leadership system (SL System) to understand thetransitions underway, frame our need for new leadership models, and introduceTheory Z: a post-western view of leadership that enables organizations to select astrategic position exemplified in its statement of intent to create the conditions bywhich it will become the new organizational reality resulting in higherperformance on measures of choice.5000 words; 23 references; 1 table; Tags: Crafting and Implementing Strategy - The Kaleidoscope of Leadership - Orchestrating ChangeIn my book, The Strategic Leader: New Tactics for a Globalizing World (2009) I presenta puzzle posed as questions to leaders who want to find the future and make it happen mustsolve. What is going on here? Do we need to jump the curve? What needs to happen here? Whatis precious and what is expendable? How do we make it happen? How do we keep making ithappen? These questions form the core elements of the strategic leadership system (SL System).When we answer these questions, as I do in this chapter, we are working in a strategic way tofind the future and make it happen.1 John Pisapia is a professor of leadership studies at Florida Atlantic University. In addition to his book The Strategic Leader, he has developed two research instruments: The Strategic Thinking Questionnaire (SLQ) and the Strategic Leadership Questionnaire (SLQ), and two developmental protocols: The Strategic Thinking Protocol, and the Strategic Execution Protocol to develop the skills of strategic leaders.Page 1 of 19 </li></ul><p> 2. Finding the Future 2010WHAT IS GOING ON HERE?Leaders must identify the strategic forces in their environment that must be addressed. Anatural place to start is to examine our worldview. Worldview means the expectations and biaseswe bring to a situation before new data appears (Lakoff, 2002). To identify the strategic forces,we not only must understand our worldview but also the worldview of those people we are tryingto influence if we wish to be successful in positioning our organizations. If we fail our ideas willfall on deaf ears, and we will be out of sync with the direction the world is moving. Our startingpoint is to understand how different worldviews give rise to alternative forms of leadership. Mypurpose in starting at this point is descriptive not prescriptive. Consequently the focus is on whatthe dominant worldviews are; not what they should be. The beginning point of this journey is an acceptance that there is a constant movement insociety between stability and instability. A tool I introduced in The Strategic Leader the powerof the curve1 can be useful to explain this constant movement and the necessary transitions;how they come about, why leaders need to be agile and jump the curve when its appropriate, andbe artistic in executing innovations that are introduced as the initial curve plays out. The curve I speak of is the sigmoid curve and the power comes when leaders are able todetect the beginnings of new curves that have the potential to replace the old sigmoid curve. Asimple example of the power of the curve is that of the early automobile industry. The transportation mode before 1907 was the horse and wagon. By introducing a newproduct - the Model T automobile - Henry Ford jumped the existing curve based on horse andwagon transportation. Henry did not invent the automobile. The first ones were hand crafted andhad a high price tag; they were unable to create a new curve. Henry surmised that a competitiveproduct had to be cheap enough that many users could afford one and sturdy enough to withstandthe wear and tear of potholes created by rough terrain of unpaved roads. So the Tin Lizzie, as the Page 2 of 19 3. Finding the Future 2010Model T was called, was bland and black; but it was affordable by the masses. In essence,Henry was able to create a new sigmoid curve by recalibrating his worldview and that of others.He reinforced this curve by introducing the assembly line technology to replace handcraftsmanship to keep costs down and enable his car to compete with and eventually outperformthe horse and wagon. The curve Henry created remained in place for twenty years and the FordCompany captured the automobile market. He continued to make Model Ts that withstood thewear and tear at an affordable price. To do this his cars came in one color black and one bodystyle - the Model T to control costs. As the century moved on, new strategic forces appeared. There were more paved roads,personal income increased, and American customers began to wonder why they could only owna car in one style and one color. Alfred Sloan, one of Henrys competitors with Chevrolet, wasone of the first to understand these signals of change. He recalculated his worldview to match theemerging future and began to give consumers choices by offering several car models and colorsat a comparable cost to the Model T. By 1925, the new curve was evident and Ford readjusted tomeet his new competition; but it was too late to retain the dominance of the market he achievedwhen he first jumped the curve. To his credit, however, the Ford Company remained animportant but not dominant player in the auto industry. The account of the ebb and flow of the early automobile industry illustrates the power ofthe curve. If we fail to understand our worldview we will fail to see the signals of change. If ourworldview is not in sync with the direction the world is moving, the signals cannot be seen andwill fall on deaf ears. So what is the direction the world is moving in now? The organizers of this enclave suggest that we are going through a transformation likeDrucker described in 1993. They suggest that this transformation will realign power, financial Page 3 of 19 4. Finding the Future 2010markets, corporate strategy, process and consumption patterns, business, competition andcollaboration. In this transition, capital will flow toward opportunity fast. Other observers agree.The developed world is moving out of an investment driven economy into an innovation drivenone fueled by competition (Porter, 2008a), innovation and technology (Freeman, Woodwark &amp;Stephenson, 2007) and the role of government to create conditions that support knowledgecreation and diffusion and resource fluidity necessary to move capital to strategic opportunities(Doz &amp; Kosonen, 2008; Meyer, Mudambi, &amp; Narula, 2011). My observationsindicate that four central strategic forces technology clash ofideologies diversity competition are moving the world fromstability to instability. Technology and innovation are in.More countries are moving from pig iron to silicon industries (Delos, 2010, p. 25). Indeveloped and developing countries wireless communications, sensors and social networkedextend the reach of organizations. For instance, there are over 500 million cell phone users inChina, 81 million in Indonesia, and 40 million in Nigeria (CIA World Factbook, 2009). Globally,the number of people doing knowledge work is increasing at a faster rate than those involved inproduction. Today the demand for cognitive skills is as important as technical skills. Accordingto the recent McKinsey survey (Freeman et. al., 2007), there are over ten million socialnetworking users worldwide which enable users to co-create content (i.e. Wikipedia, Facebook,and cloud computing). These web 2.0 tools enable individuals and organizations to access thebest talent and skills from a wider pool, pay for these services as one does with a public utility,collaborate across organizational boundaries, and receive immediate data for analysis andexperimentation to drive innovation. Page 4 of 19 5. Finding the Future 2010 Central planning and capital are out; no holds barred state or democratic capitalism fueled by competition, knowledge, and innovation are in.This trend is being played out as a struggle between state and democratic capitalism. DavidBrooks (2010) the award winning New York Times syndicated columnist2 characterizes thistrend this way. On one side are the United States of America (USA), Japan, and Australia whobelieve that business creates wealth and governments regulate and enforce a level playing field.On the other side there are China, Saudi Arabia, Russia, and Iran who believe that governmentuses markets to create wealth that finances the ruling partys survival. The two groups ofcountries invest differently. For example, India with a decentralized model focuses on lowcapital investment in IT, and high capital flow toward education. However, even in China withits traditional centralization, high capital investment in plants, steps are being taken todecentralize and introduce competition and move from a planned economy to a market economy.Evidently this rivalry is an interdependent one unlike previous ideological clashes. Viewingthese signals from a traditional worldview will prove to be inadequate to anticipate the shift froma bipolar world of the USA and the rest of the world to a multi-polar world where the USA, whostill accounts for one third of all the economic growth in the world over the last 15 years (Porter2008b) and leads the world in technology, patents, and higher education, will still be relevant butnot the engine it has been historically. Looking at the world through a multi-polar lens,strategists must focus on combinations of forging a new path or fast following! Diversity is in; single geopolitical interests is outAnother driving strategic force in the world is the explosion of diversity of consumers.Interestedly this diversity is not so much ethnic [although it still exists] as much as it is in classstructure as the middle class in emerging countries of Russia, China, and Brazil explodes.Page 5 of 19 6. Finding the Future 2010Internally, the hiring of Millennials with their backpacks and Kakis and the hiring ofmultinationals to work in and manage globalizing corporations require rethinking organizationalprocesses, structure, and leadership styles. Diversity in these cases leads to fragmentation of themarketplace and reconfiguring organizations. Cherian Varghese (2010) suggests thatorganizations with these characteristics must possess three attributes: operate as networks, highlyadaptable business model that can enter new markets quickly, diverse leadership teams, andmultiple value systems co-existing in the same company. Competition is in; protectionism is out. Competition, advocates assert, encourages the development of new products, services andtechnologies leading to lower prices and better products. It works well when property rights andthe rule of law are underlying elements of the transactions. The fallacies in the logic ofprotectionism, restraint of trade, and barriers to trade are well accepted (Bhagwati, 2004).Relatively speaking it is not by chance that none of the poorest economies in the world is freeand none of the freest economies are poor (Kasper &amp; Streit. 1998). Competition is also evident in the education sector. For example, in China thepreparation of school principals was assigned to one university. Each year fifteen hundredbeginning principals are brought to China East Normal University in cohorts of 50 to study andlive on campus for three months and become certified as a school principal. Now there aremovements to introduce competition from other universities and private providers in the trainingof principals. Similarly, in the USA, K-12 public educations protected status is waning as moreand more Charter Schools open. Traditional competition, however, is giving away to cooperativecompetition thus promoting mutual survival. Regardless if a nation or an organization ispowerful or less powerful, value now comes from the interactions of an interlocking playersPage 6 of 19 7. Finding the Future 2010rather than one-on-one transactions. Management interlocks occur when two corporations sharea board director or officer, a practice which may confer upon corporations benefits such asexpertise, legitimacy, and cooptation of risk. Management interlocks have their problems butproduct interlocks can help ensure that a corporation has a steady and reliable stream ofresources necessary for its business operations. Product interlocks occur when companies selectpartners for creation and distribution such as Apples IPhone and AT&amp;T, Shell Oil companyspartnering with Qatar Petroleum, or the Chinese government and the Disney Corporation joiningforces to introduce Disney China. The global challenge and opportunity appears to be in findinglocal partners who can overcome local customs; but these product interlocks do not happen bychance.The key for solving the first part of the leader puzzle is to ask, How do these strategicforces impact my industry? The second part of the puzzle is to determine what you need to do inorder to address strategic forces in your environment. Do you need to jump the curve? Howhave others made this decision?WHAT HAS TO HAPPEN HERE Let us fast forward to the year 2006. After presenting my thoughts on strategic thinking atthe NHDR conference in New Delhi, I hired a driver and set off to Agra to visit the Taj Mahaland returned by train.3 The roadway was crowded with bicycles, auto rickshaws, small cars,tractors, motorcycles and other forms of conveyance that could carry people from one place toanother, even a wagon pulled by camels and another by water buffalos. The two wheelersparticularly caught my eye. Men in helmets drove the bike with their spouse sitting side saddleon the back and without a helmet; often they were holding a baby. Sometimes a small boy or girlsat western style in front of their father. Page 7 of 19 8. Finding the Future 2010 After reflecting on my experience and observations, I came to the conclusion that thisland is where chaos and opportunity is king. Ratan Tata, being the strategic thinker that he is,more than likely saw the same things I was seeing many times in his travels through the countryand came to similar conclusions. Soon after taking control of the Tata Group he positioned Tatato globalize, be skill intensive, and be among the top three in an industry or exit. His mainconcern at the time was with mindset and attitudes. He saw the creation of a new mindset as hisfirst job followe...</p>