leadership & management

V9 / 1st September 2006 /

Winning with the BestHarvard experience – views on Leadership

Sanjay Razdan

Executive Action

Strategy &CompetitivePositioning

Achieving

Profit Goals

& Strategies

Leadership

Organizations

& Renewal

Customer / ProductMarkets

Geo-PoliticalEnvironments

Capital Markets

Theme DaysSpecialized TopicsGuest Speakers

Leadership & Corp. AccountabilityInformation TechnologyChinaGovernance360 FeedbackNegotiationTaking ChargeFaculty Speakers SeriesParticipant Forums

Advanced Management Program

Source : Harvard Business School

Key Highlights

• Overall frameworks for analyzing, formulating and implementing opportunity and performance gaps in global organizations to maintain a sustainable growth for a long term.

• Large emphasis on need for continuous incremental change and periodical revolutionary change required to survive in today’s and tomorrow’s environment

Leadership vs. Management

Leadership• Creating Vision & Strategy

• Communicating vision/strategy and getting buy in

• Helps an organization grow, evolve and adapt to changing circumstances

Management• Planning & Budgeting

• Organizing & Staffing

• Controlling & Problem Solving

• Makes an Organization run efficiently

The WINNING process is 75% Leadership & 25% Management but both are required to run a business in an Era of Change

Management and Leadership are Both Required to Run a Business

+

Innovative and Energetic But on the Edge of

Debilitating Chaos

Meets Today's Commitments To Customers and

Shareholders Superbly While Also Adapting To Change in a Way That

Will Make the Enterprise Stronger in the Future

An Enterprise That Is Soon to Go Out of Business

Unless It Is a ProtectedMonopoly

Usually Solid and a Money Maker If It Has High Market Shares,

But Also Very Bureaucratic and Controlling and

Unable to Adapt Well to a Changing Environment

Management

Lea

der

ship

0 ++

++

+

High Leadership and High Management Can Be Created With Teamwork

Management

Lea

der

ship

0 + ++

++

+

XX

XX

X

X

XX

XX

X

X

X X X X

T

X = Managers / ExecutivesT = How the group acts when fused as a team

The WINNING process is 75% Leadership & 25% Management but both are required to run a business in an Era of Change

Source : John Kotter Harvard Business School

Leadership

Tangible:

Accountability to deliver:

• Growth (High Value Sales/Net Promoters)

Existing & Qualified new customers

Need to be clear on what we DON’T want to do

• Productivity Improvement (My Contribution) Remain competitive in the global market

• People Development (GPTW)

Enhance required skills & Reward

Reduce Non-performers

• Innovation (My Contribution) Developing what customer needs rather than

IDEAL Products

Speed

Intangible:

Be a Role Model :

• Values & Beliefs

• Clarity on Vision/Strategy

• Ethics and Integrity

• Building a Passionate Team

• Building Trust

• Keeping day to day promises

• Clear and transparent communications

• Performance based

Intangible element of Leadership is Critical for Sustainable Growth

Sources of Sustainability

Response lags:

Price < 60 days

Advertising < 1 year

Innovation <2 years

Manufacturing <3 years

Distribution <4 years

People <7 years

Some activities are harder to replicate than others

People are critical for Sustainable Growth

Source : Harvard Business School Research Data

The following cases maintained consecutive profitable growth over the last 30 years :

VALUES

• J&J

PEOPLE

• SouthWest Airlines

VISION/STRATEGY

• Wal-Mart

Leadership requires Consistent Values, Passionate PeopleAnd a Clear Vision & Strategy and

Case studies in Leadership

CREDO (Value Statement)

… We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to reduce our costs in order to maintain reasonable prices. Customers’ orders must be serviced promptly and accurately….We are responsible to our employees, the men and women who work with us throughout the world. Everyone must be considered as an individual. We must respect their dignity and recognize their merit. ..We are responsible to the communities in which we live and work and to the world community as well. We must be good citizens — support good works and charities and bear our fair share of taxes…Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas…

Airline Performance 2002

Cost perseat mile

Revenue perseat mile

PercentOn-time

Southwest Southwest 7.38 7.38 7.59 7.59 82.1%82.1%UsairUsair 15.2015.20 12.1112.11 81.0%81.0%UnitedUnited 11.6111.61 9.34 9.34 82.5%82.5%ContinentalContinental 10.9610.96 9.47 9.47 85.2%85.2%DeltaDelta 11.1611.16 9.25 9.25 78.8%78.8%AmericanAmerican 11.5511.55 9.50 9.50 82.6%82.6%NorthwestNorthwest 10.7110.71 9.47 9.47 79.6%79.6%

Source : Mike Tushman Harvard Business School

• Low cost, low price• Point-to-point• Short haul• Focus - niche• Convenience• Reliability• Frequency• Customer service• “Fun”

Strategy Leadership

Formal Organization

• Kelleher• Symbolic management of behavior• Consistency within the senior team• Relentless and boring

Key Success Factors

People Culture

• Team player• Careful selection• Positive attitudes• Flexibility• Enthusiasm• Committed

• Flat• Team-based• Widespread sharing of information• Wage compression• Stock ownership• Profit sharing• Strong socialization

• Productivity • Efficiency / Low cost• Fast turnaround• “Fun”• Good labor relations

• Openness• Celebration• Family• Teamwork• Equality• Initiative and hard work• Underdog

Opportunity GapPerformance Gap


Source : David Yoffie Harvard Business School

Wal-Mart Competitive Positioning

The LCP and Low Priced Provider of discount merchandise and food worldwide (with emphasis in the US on rural and suburban locations) through

aggressive cost management, superior logistic, HR and IT….Source : David Yoffie Harvard Business School

Passion for Performance

Back UP Slides

• Leadership vs. Management

• Ambidextrous Organization Model

• An effective Implementation of Strategy

• Levers of Control Matrix in CPS

• Marketing Process Model

• The Executive Compass

• Aligning & Directing Resources Questionnaire

Ambidextrous Organization

TECHNOLOGY

People Culture

Key Success Factors

Formal Organization

People Culture

Key Success Factors

Formal Organization

People Culture

Key Success Factors

Formal OrganizationMA

RK

ET

Existing

New

Continuous Architectural Discontinuous

Revolutionary Change

Revolutionary Change

Retention(Incremental Change)

Variation(Discontinuous orArchitectural Change)


Obtaining Commitmentto the Grand Purpose

Staking Outthe Territory

Getting theJob Done

Positioningfor Tomorrow

INTERNAL CONTROLS

Safeguarding Information and Assets

BusinessStrategy

Risks to Be Avoided

CoreValues

Critical Performance

Variables

Strategic Uncertainties

BELIEFSSYSTEMS

BOUNDARYSYSTEMS

DIAGNOSTICCONTROLSYSTEMS

INTERACTIVECONTROLSYSTEMS

An Effective Implementation of Strategy

Source : Robert Simons Harvard Business School

CPS 2004/5

Span of Control

Span of Accountability

Narrow Wide

FewResources

ManyResources

Span of Influence

Span of Support

InteractionsWithin Unit

InteractionsAcross Units

Measures AllowFew Tradeoffs

Measures Allow Many Tradeoffs

Strong CommitmentOf Help From Others

No CommitmentOf Help From Others


Demand is higher than Resources

CPS 2006/7

Span of Control


Narrow Wide

FewResources

ManyResources

Span of Influence

Span of Support








Demand matches Resources

CPS 2007/08

Span of Control


Narrow Wide

FewResources

ManyResources

Span of Influence

Span of Support








Demand is slightly higher than Resources

Marketing Process

Source : John Quelch Harvard Business School

The Executive Compass

CustomerCustomerDefinitionDefinition

BusinessStrategy

CreativeCreativeTensionTension

Strategic

Boundaries

Syste

ms

Safeg

uard

s

Strate

gic

Uncer

taint

ies

SharedValues

CriticalCriticalPerformancePerformance

VariablesVariables

CommitmentCommitment to Othersto Others


Aligning & Directing Resources

• Who Is Your Primary Customer? Are you organized to deliver maximum value to your primary customer?

What resources are available to satisfy your other constituents?

• What Performance Variables Are Critical For Implementing Your Strategy? What is your theory of value creation?

What are your strategic goals?

What leading indicators are you tracking?

What financial measures are you tracking?

• Does Your Strategy Rely on Self-Interest Or Commitment To Others? What are you doing to build a sense of responsibility for shared success?

Are your managers acting as role models in assuming responsibility to help others?

Are you promoting the right people?

• Do You Need to Stimulate Creative Tension Across Units? How are you encouraging ongoing interaction across internal boundaries?

How are you motivating individuals to influence people in other units?

Has your organization become too complex and costly?

© Robert SimonsHarvard Business School 2006

Safeguarding Assets & Investing For The Future

• What Kinds Of Strategic Boundaries Have You Established For Your Business? What are your major franchise and reputation risks?

Do your employees know what behaviors are off-limits and the consequences?

Do your managers know what initiatives will not be supported?

• Are Systems Safeguards Adequate To Protect Assets And Information? How are you controlling the major pressure points in your business?

• What Shared Values Are Needed To Ensure Long-Term Sustainability? How are you ensuring that these values are shared widely in your organization?

• What Strategic Uncertainties Keep You Awake At Night? How do you stimulate the bottom-up flow of information?

Does everyone know your hot buttons?

What information systems are you using interactively to stimulate learning

© Robert SimonsHarvard Business School 2006Source : Robert Simons Harvard Business School

leadership & management

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high management

high leadership

aggressive cost management

high quality

new ideas airline performance

othersno commitmentof

consecutive profitable

day promisesclear