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BAE SYSTEMS North AmericaEXECUTIVE DEVELOPMENT INSTITUTE
Creating the Future:Leadership and Change
Jim ClawsonDarden Graduate School of Business Administration
University of Virginia
1
Connection to other Institutes
2
The TeachablePoint of
ViewStrategy
PersonalFoundations
BusinessAcumen
Leadership& Change
Structure of the Institute
• Leading Personal Change• Leading Team Change• Large Scale Organizational Change• Applications• Aspirations
3
Program Invitations• Look and listen for the possibilities• Keep a Personal Insight Page (PIP sheet)• Look for and write down things you would like to
work on in the next 90 days • Contribute your experiences and insight to the
group.• Read and prepare the assignments• Take responsibility for your own learning.
5
STRATEGIC ISSUES
7
A Strategic Issue is any issue that significantly influences your ability to develop and maintain a competitive advantage.
COMPETITIVE ADVANTAGE
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A competitive advantage has three key characteristics:
1. it provides superior value to customers
2. it is hard to imitate
3. it enhances one’s ability to respond to changes in the environment.
Adapted from George Day (1994)
SOURCES OF COMPETITIVE ADVANTAGE
• Government subsidy or support• Established or monopolistic markets• Product innovation• Process innovation, Cost efficiencies• Superior Service• Human Resource Management• Learning
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Mental “Hats”
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Judge Listening for Conformity
Learner
Explorer
Designer
Champion
Listening for Possibilities
Pushing into New Zones
Planning for Changes
Leading Action
Leadership is not about title.What’s your Point of View?
Leader’s Point of View?
POVPOV Things they say…Things they say…
Follower’s Point of View?
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Bureaucratic Point of View?
Your point of view doesn’t depend on your title…
The Leadership Point of View
1. Can you see what needs to be done?2. Do you understand all the underlying
forces?3. Are you willing to initiate action to
make it better?
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Introductions
• Name• Location• What do you build?• Biggest Issue/Challenge you’re dealing with in
Life
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Problems: The Source of Change
“…the starting point of any effective change effort is a clearly defined business problem.” Beer, Eisenstadt, Spector—Why change programs don’t produce change. HBR
What problems do you SEE?What kind of problem is strong enough to initiate change?
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“Ten short years.... the one thing that we have done consistently is to change .... It may seem easier for our life to remain constant, but change, really, is the only constant. We cannot stop it and we cannot escape it. We can let it destroy us or we can embrace it. We must embrace it.”
Michael EisnerDisney 1994 Annual Report
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Population Growth
6.0
5.55.5
5.0
4.54.5
4.0
3.53.5
3.0
2.52.5
2.0
1.51.5
1.0
0.5
500 400400 300 200200 100 A.D.A.D. 100 200200 300 400400 500 600600 700 800800 900 10001000 1100 12001200 1300 14001400 1500 160016001700 180018001900
1950
20002000
World
Population
in
Billions
Source: US Census Bureau, Population Reference Bureau, adapted from Breathing Space, by Jeff Davidson
ThePlague
Industrial Revolution
Medical & InformationRevolution
Bio, Nano & Energy Revolutions
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Types of Change
• Big Bang: discontinuous• Incremental or evolutionary• Externally driven Internally driven• Top Down Bottoms Up• Out there In here
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Key Leadership Initiatives
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STRATEGY(priorities)
ORGANI-ZATION(design)
OTHERS(employees)
LEADER(traits) Strategic ThinkingDeveloping
Influence
Designing
2. What’s Your
“story?”
3. Can you“sell” your
story?
4. Does yourorganization
help or hinder?5. Can you lead changeto keep up?
1. Who areyou?
There are always two parties, the party of the past and the party of the future; the establishment and the movement.
Ralph Waldo Emerson.
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Every CEO has to spend an enormous amount of time shuffling papers. The question is, how much of your time can you leave free to think about ideas? To me the pursuit of ideas is the only thing that matters. You can always find capable people to do almost everything else.”Michael Eisner, Fortune, December 4, 1989, page 116.
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Success• Performance• Satisfaction• Growth
Situation and Stakeholders• Economic and Socio-Political
Environment • Customers and Suppliers• Industry Structure• Competitive Dynamics• Employee Groups and Communities• Shareholders and Other Stakeholders
Strategy
Staff
Skills Style
Self:The Leader
Superordinate Goals
Structure
A Leader’s Guide to Understanding Organizations: An Expanded “7-S” Perspective
Systems
Shared Values
Figure 4Adapted from McKinsey & Co. and other sources
Economic DevelopmentWhere are the margins?
(Pine and Gilmore, The Experience Economy)
5. Transformations (pay for how time with you transforms me)
4. Experiences (pay for time with you)
3. Services supplant goods (what I do for you, and margins are … declining, becoming commoditized)
2. Goods out of commodities (margins?)
1. Commodities out of the earth (margins?)
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MARGINS
Strategy is the art of creating value. It provides the intellectual frameworks, conceptual models, and governing ideas that allow a company’s managers to identify opportunities for bringing value to customers and for delivering that value at a profit. In this respect, strategy is the way a company defines its business and links together the only resources that really matter in today’s economy: knowledge and relationships or an organization’s competencies and customers.Normann, R. and Ramirez, R., “From Value Chain to Value Constellation: Designing Interactive Strategy,” Harvard Business Review, July-August 1993, p.65.
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STRATEGIC FIT MODEL
Strategic MindsetsSTRATEGIC INTENT
MODEL
Source, Hamel and Prahalad, Strategic Intent, HBR
Strategic thinking is driven by the match between current capabilities and existing opportunities
Searching for sustainable advantages
Finding protected niches
Strategic thinking is driven by bridging gap between today’s reality and tomorrow’s vision
Finding ways to leverage resources
Outpacing competitors in building new advantages
Making new industry rules
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Realized Strategy
30
IntendedStrategy
ActualStrategy
EmergentStrategy
RealizedStrategy
OpportunisticStrategy
Realized Strategy
31
Realized strategy is the result of the collision between dreams and economic realities….
STRATEGIC CYCLES
32
CURRENTREALITY
VISIONINTENT
DESIGN, COGNITIVE
ACTION, IMPLEMENTATION
CoreCompetencies
Innovator’s Dilemma
33
Utilization of Features Overshoot
Not good enough, cheap disruptive technology
attracts non users
Learning high margin culture