How To Make Great Leadership Decisions

How To Make Great Leadership Decisions

By Mike Myatt, Chief Strategy Officer, N2growth

Why do leaders fail?

They make bad decisions.

And in some cases they compound bad decision upon bad decision.

Excerpt

The truth is that even leaders who don’t fail make bad decisions from time-to-time. Those leaders who avoid making decisions solely for fear of making a bad decision, or conversely those that make decisions just for the sake of making a decision will likely not last long. The fact of the matter is that senior executives who rise to the C-suite do so largely based upon their ability to consistently make sound decisions.

Making sound decisions is a skill set that needs to be developed like any other. The first key in understanding how to make great decisions is learning how to synthesize the overwhelming amount incoming information leaders must deal with on a daily basis, while making the best decisions possible in a timely fashion. The key to dealing with the volumenous amounts of infomation is as simple as becoming discerning surrounding the filtering of various inputs.
Understanding that a hierarchy of knowledge exists is critically important when attempting to make prudent decisions. Put simply…not all inputs should weigh equally in one’s decisioning process. By developing a qualitative and quantitative filtering mechanism for your decisioning process you can make better decisions in a shorter period of time.

The hierarchy of knowledge is as follows:

Five Strategies for Optimizing Service Channels

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  Global competition has ushered in a steady stream of new and unique products that consumers can choose from, so it's become increasingly difficult for companies to distinguish their products from other players. In an effort to capture and retain high-end customers, organizational leaders must determine the most effective ways to deliver consistent service to customers across all channels based on their needs, while providing premium service to their best customers according to their value - including how influential the customer is in recommending the product.

Supported by insights from inContact and Peppers & Rogers Group, readers will obtain valuable recommendations on how to strike an effective balance between providing customers with superior support experiences across channels and reducing costs via service segmentation.

This paper will reveal five strategies for doing so, including:

• Identifying and acting on contact center and customer support pain points
• Delivering consistent experiences to customers across a variety of support channels
• Using analytics to help match customer value with a complementary level of support
• Drawing on VoC, social media, and other feedback channels to make incremental improvements to customer experiences
• Incenting certain customers to use self-service channels

Strategy Execution in times of Uncertainty

	In this unpredictable economic climate, leaders must be capable to lead their companies to quickly adapt to new market forces. Business models are changing to catch up with the emerging drivers of competition. Success hinges first and foremost on "Thinking-Ahead" strategy  and robust execution. Because execution plays such a critical role in success or failure, especially during a crisis, many companies are turning to new technology solutions to ensure they can deliver on strategies and emerge even stronger. Any company that fails to adapt quickly and efficiently to market changes can miss important opportunities ir risk their very survival. Here are some key points to consider: A new strategy is not enough - executing under these extreme market conditions is not enough, meaning you need to make sure you touch every point of the strategy timeline and product offering. Align your workforce with what you want to accomplish - workforce alignment and performance is critical. Be prepared to change course or rethink your strategy monthly - it is difficult to get your strategy right the first time so review religiously.  Leverage performance and talent management solutions for business execution - this will help you attain the top and bottom line results.    Key points from Workforce Magazine (June 2010)
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Thinking Ahead Succession Planning - The Key to future success

"Thinking Ahead"  succession planning enables organizations to takeover new responsibilities in a much faster way and with least disruption in the business activities.	An article highlights four best practices to ensure effective succession planning that can be implemented in any company - Analysis; Development; Selection and Transition. Having a structure in place that carefully engages in those best practices will set the new leaders firmly towards future success. Link to article >
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Learning to Lead

Herminia Ibarra , Professor of Organizational Behavior, and Faculty Director of the INSEAD Leadership Initiative, contests that we learn to lead in relationship, by becoming a part of a community and network of leaders, but what we preach, however, is very different.   Let's draw some inferences by considering a few schools of thought: Situational leadership, — originally conceived as the antidote to the great man theories of leadership. The situational school brought us the notion of "fit:" person to situation and leader to follower. The original version said the situation makes the leader. The simpler version we retained says something else altogether, that good leaders choose among the leadership styles or change strategies in their repertoire the one that best matches their current situation.    Discover your strengths — another great example of a one-sided and static focus on personal attributes that make people effective leaders. According to this theory, we can categorize ourselves according to a number of themes and clusters of themes that describe our strengths; once identified, they help us make decisions about what situation best match us. Practice — From Malcolm Gladwell's Outliers to Geoff Colvin's Talent is Overrated we learn about the magic rule of 10,000 hours. Bill Gates, we are told, became a computer wiz because he had access to an early computer and was able to clock the requisite number of hours. Putting in the hours, not innate talent, makes the leader.   Prof. Ibarra's research on how effective managers make the transition to bigger, broader leadership roles and cements their contribution to the growth and transformation of their organization, incorporates 4 key enablers: o    Motivate the transition to leadership. When asked to do things that don't come naturally, we implicitly ask ourselves "am I the sort of person who behaves this way?" "Do I want to be that sort of person?". When managers' identification is rooted in functional groups or expert communities, the answers are negative when it comes to leadership, and thus it is no surprise that they do not sustain the arduous practice it takes to develop as leaders. On the other hand, when they identify with recognized leaders, learning to lead is motivated by the desire to become a member of a valued group. o    Make the "competencies" come alive. One of the difficult things about learning to lead is distinguishing between "what" (content knowledge) and "how to" (process knowledge). We may know, for example, that "sensing external trends" is a critical competency in forging a strategic direction, and we may also want to become more like the leaders we know who are very good at that. But, how does one actually learn to strategize? In a successful learning cycle, role models, peer groups and communities of practice motivate change by changing our reference point on what is desirable and possible, and then once motivated, providing tacit knowledge on how to do it. o    Experiment from the outside in. Many aspiring leaders struggle to stretch their leadership within their current organization and roles. Caught in between delivery pressures and outdated views of their capacities, they more quickly or easily find roles outside the organization that allow them to lead. Their new activities, in professional organizations, clubs, informal advisory and so on, create external identities that they eventually internalize. o    Build external support & networks to sustain change. Often it is hard to get support for change from old mentors, bosses or trusted colleagues. They may have good intentions but maintain of what we can and should do that are based in the past and not the future. People and groups, on the fringe of our existing networks help us push off in new directions while providing the secure base in which change can take hold, one of the reasons why learning methods like peer coaching are so powerful.   O2ibm

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Thinking Ahead as a True Leader

The ability to 'think ahead' and plan a strategy, implies keeping in touch with employee opinions, technological advances and market trends that will help shape your vision - to be shared. Leaders, by definition, must have followers that aspire to the leader’s vision. Once you’ve  'thought ahead' into the future, you need to communicate your vision with conviction and confidence, as to inspire, energize and unite your team. A leader must be capable of shaping internal politics that will support performance improvement initiatives. During times of change, uncertainty and fear reign supreme. As a result, leaders confronting strategic and organizational change, have to manage communication effectively. As a leader, you have to portray a compelling vision for the future, while implementing change.  Processes that build a shared vision of the future, create positive coalitions, and allow open expression of competing views will prepare people for the change. Motivating people to peak performance is a must of  leadership. But how can you unleash the full individual emotional commitment and collective potential of your people so that they achieve higher levels of performance? Generating emotional energy and commitment takes time and effort, as to ensure that the right balance between achieving the task, building the team and  sustaining morale.

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Strategic Innovation - The AVAC framework (Activities, Value, Appropriability, and Change)

In his book Strategic Innovation (Routledge, 2009), professor Allan Afuah provides us with a comprehensive strategic framework for assessing the profitability potential of a strategy or product.- the value of "new game" strategies -  in the face of rapid technological change and increasing globalization. It's not enough to create value in new and different ways, he says. Nor is it sufficient to merely capture value today. To compete and win, firms may need to rewrite the rules of the game altogether, overturning existing ways of both creating and appropriating value.  The most important thing, he stresses, is that a firm pursue the right new game strategy... A brief Interview of Professor Allan Afuah by Deborah Holdship follows....Let's start by talking about strategic innovation in the most general sense.

Three Key Questions to Foster Competitive Advantage

James Heskett, a Baker Foundation Professor, Emeritus, at Harvard Business School, examined the degree to which strategy, execution, and culture contribute to organizational success, via 3 key questions that reflect all aspects of competitive sucess:

 





1. If your organization's performance (operating income) = 100%, roughly what percentage is accounted for by the quality of the organization's strategy (clients we target; products, services and results we offer; the way we organize and compensate people, etc.) vs. the quality of the organization's execution of its strategy (the quality of our people, work, processes, decisions, etc.)?

2. If your organization's strategy = 100%, roughly what proportion of its effectiveness is dependent upon and accounted for by the organization's culture (widely-shared values, beliefs, behaviors, rites and rituals, etc.)?

3. If the execution of your organization's strategy = 100%, roughly what proportion of its effectiveness is dependent upon and accounted for by the organization's culture?

The questions reflect all aspects of competitive success.
What do you think?

A behind-the-scenes look at how the One Strategy approach works in practice

The "One Strategy" book reflects on how to develop strategies that are aligned with execution in a rapidly changing competitive environment.

The Interview of Marco Iansiti, Professor of Business Administration at Harvard Business School, by Sean Silverthorne is editor-in-chief of HBS Working Knowledge follows...

Q: Who will benefit from reading it?

A: Our audience is senior managers in any industry. Specialists in the high-tech sector will find it particularly interesting because it reflects on crucial competitive dynamics in their space. However, managers outside the tech sector will still appreciate the general management lessons throughout the book.

Q: What is strategic integrity, and why is it important?

A: Every firm has two strategies. The first is top-down, "directed" strategy—what the CEO and the senior management team believe the firm should focus on. The second is bottom-up, "emergent" strategy, which is established by the actual decisions and behaviors in the organization.
Directed strategy is what management believes needs to get done, while emergent strategy represents what actually gets done. Strategic integrity is when emergent and directed strategies are one and the same thing: when the strategy executes with the full, aligned backing of the organization for maximum impact. When a strategy lacks integrity it's like those war movie spoofs when the cavalry general goes on the attack, only to find that none of his troops actually follow him...

"It seems quite possible that Toyota's model may have ossified a bit."
The book provides a very pragmatic (and detailed) look at how to achieve strategic integrity. This is not a theory book, but a book that offers insights and tools one can put into practice. Steven and I describe in detail how to build organizational capabilities, set up a good structure, implement the right processes, and adopt an effective management style.
Achieving strategic integrity is always important since managers naturally wish to maximize the impact of their strategies. However, the notion of strategic integrity is particularly important in times of change. Our past is littered with firms that failed to adapt to competitive changes. Obtaining One Strategy in times of change means the organization will respond in a holistic fashion to new challenges, staying aligned for maximum competitive impact.
Q: What are the chief impediments to strategy execution?
A: The chief impediment is inertia. Over time, organizations tend to optimize the efficiency of their operating model. Dell's direct model, during the 1995-2005 time frame, is the perfect example. Every process, every incentive, every cultural norm was optimized to deliver efficiently, bypassing the retail channel. When the strategy changed, the organization simply did not follow. Execution continued along the old inertial path, and the organization failed to adapt, despite the intentions of senior management. The structures, processes, and behaviors defined in the book are designed to break inertia, and maintain strategic alignment in times of change.
Q: To plan or not to plan? Your own research sheds some light on the question of whether top-down project planning has become outdated in today's fast-moving environments. What did you discover, and how did Microsoft do it?
A: Planning is key. Planning is the glue that holds the organization together, providing a way to test the strategy, determine its feasibility, improve it through collective feedback, and align capabilities to drive its execution.
Planning is central to the One Strategy approach. But the planning process we describe is going to surprise many executives. It's not the usual top-down, rigid, budget-style race for resources, or a "brain trust"—driven process developed by a select set of the "top people."
Planning for One Strategy is iterative and collaborative, defining a framework for executing on the strategic priorities, while refining the strategy and aligning the organization around its features. Planning is the process that more than any other activity works to align the organization around one set of goals, top-down, bottom-up, and "middle-out." By necessity, planning is a process that involves many people and empowers those closest to the knowledge and the work.
Q: One thing that struck me in Steven Sinofsky's blog was how relatively little of his time was devoted to formal product reviews. Going in I would have bet that these kinds of meetings would be huge at Microsoft. What did you make of this practice?
A: In a review, the middle managers typically deliver a PowerPoint presentation that formalizes issues around project status to the executive in charge of the project. This makes no sense if you truly believe that the point is aligning the whole organization around the strategy, not convincing the one executive that you are following his or her ideas.
The One Strategy approach is less about formal reviews and more about one-on-one conversation. The idea is to maintain as much as possible a rich, two-way, and informal exchange of ideas to make sure that the strategy is perfected and the priorities are universally shared. There is no point in spending days preparing slides that portray an often-artificial look at the project to convince your manager that you understand his or her views. The point is for everyone to contribute to perfect the approach, and do so in a collaborative fashion and with integrity. Beautiful, handcrafted slides don't cut it. What you want is free, informal discussion around the realities of the project.
Q: The One Strategy approach is mirrored in your discussion of the "innovator's reality." The reality is that in designing new products innovators can't ignore the benefits users received from previous versions. How should companies think of existing products when it comes to creating new ones?
A: Answering this question goes back to our definition of innovation. Innovation is invention times impact. Invention is nice, but if it has no economic or social impact it is useless.
This view on innovation highlights the interesting role played by established firms. Traditionally, my academic field has argued that big companies have trouble innovating because their businesses are too complex, with assets, processes, and capabilities that make the organization inflexible. However, those same assets are also extremely valuable when it comes to achieving impact. Established enterprises have customer relationships, channels to market, technical capabilities, critical data and information about consumers, along with a myriad other factors that will increase the impact of any innovation they come up with. Apple, Microsoft, Google, and IBM are all established firms, each with a remarkable track record of innovations that built on past capabilities.
The same assets, processes, and capabilities that make established firms complex and hard to manage also make them incredibly powerful and impactful. The innovator's reality is that in order for a product to be successful, it has to master the complexity of customer adoption—and customers are used to the richness of previous versions and traditional solutions (the first successful hybrid cars, for instance, had to have air bags just like their predecessors). This means that established firms start with a huge advantage in that they have already mastered answers to these problems. Rather than being helpless when confronted by start-ups, established firms should leverage their traditional capabilities and manage their way to success—as long as they can figure out how to get the organization aligned around the new strategies.
Q: One way that Sinofsky communicates with his staff is via a quite detailed blog on his management philosophy. What did you think of this idea, and is it a model that other managers should follow?
A: Blogs are a powerful asset in managing an organization. If you are responsible for hundreds or thousands of people, ensuring clear, consistent communication of your ideas to the entire group is a difficult challenge. As Steven demonstrates, blogs are highly effective in aligning an organization, jump-starting a two-way interaction that can really shape strategy and align the organization around it.
Blogging, today, is increasingly common. In an informal poll in the School's General Management Program, which brings in executives from around the world, about 20 percent said they write a regular blog.
Q: Care to comment on Toyota, which is held up as a model at the end of the book, but which has since suffered very public problems? I wonder if its admitted overemphasis on growth at the expense of quality might be an example of the dangers of separating strategy development from strategy execution?
A: The Toyota story becomes more interesting every day. There is no question that decades of success at Toyota demonstrate the power of its management systems and approaches. At the same time, the roots of its current crisis appear very deep.
It is difficult to understand exactly what happened since the questions have barely started, but it seems quite possible that Toyota's model may have ossified a bit, as what happened with the Dell example we discuss in chapter 1. Some of the accounts that I have seen point to an inability by management to detect long-term patterns across different recalls.
Whether the organization was still aligned in both the strategic importance of quality and in the execution of a quality strategy might have contributed to the situation we see today. Clearly many questions remain.
Q: What are you working on now?
A: The main thing I am working on is a generalization of the One Strategy framework by running an empirical study across four industries, namely online services, foods, semiconductors, and health-care devices. Each of these sectors is undergoing a tremendous transformation, and I am following very closely the strategic behavior of key firms.

Source HBS

The "One Strategy" Destination

According to Marco Iansiti, Professor of Business Administration at Harvard Business School, every corporation has two strategies: "Explicit" strategy is the one you read about in your company's planning memos and PowerPoint slides. The second, "implicit" strategy, is what emerges when middle managers and line employees attempt to execute the explicit strategy.
Unfortunately, these strategies often diverge. They are not aligned. And so the potential of the enterprise becomes unrealized.Strategy therefore becomes ...






"Strategy therefore becomes the product of the firm's incentives, structures, and patterns of behavior, not the other way around," writes Harvard Business School professor Marco Iansiti, an expert on innovation, entrepreneurship, and operations."Our past is littered with firms that failed to adapt to competitive changes," Iansiti says in an interview with HBS Working Knowledge. "Obtaining One Strategy in times of change means the organization will respond in a holistic fashion to new challenges, staying aligned for maximum competitive impact." Professor Marco Iansiti and Microsoft's Steven Sinofsky discuss a "One Strategy" approach to aligning plan and action.

Key concepts on how to develop strategies that are aligned with execution in a rapidly changing competitive environment include:

• ·   "Strategic integrity" occurs when the strategy executes with the full, aligned backing of the organization for maximum impact.
• ·    The chief impediment to strategy execution is inertia.
• ·    The One Strategy approach is less about formal reviews and more about one-on-one conversation.