Bài giảng Crafting & Executing Strategy - Chapter 12 Corporate culture and leadership: Keys to Good Strategy Execution

CHAPTER 12CORPORATE CULTURE AND LEADERSHIP:Keys to Good Strategy ExecutionStudent VersionMcGraw-Hill/IrwinCopyright đ2012 The McGraw-Hill Companies, Inc.INSTILLING A CORPORATE CULTURE THAT PROMOTES GOOD STRATEGY EXECUTIONCorporate CultureIs the meshing of shared values, beliefs, business principles, and traditions that imbues a firm’s operating style, behavioral norms, ingrained attitudes, and work atmosphere.Is important because it influences the firm’s actions and approaches to conducting business.Key Features of a Firm’s Corporate CultureStrength of peer pressure to conform and observe normsActions and behaviors encouraged and rewardedTraditions and stories and “how we do things around here”How the firm treats its stakeholdersFeatures of a Corporate CultureValues, principles, and ethical standardsin actual useManagement practices and organizational policesAtmosphere and spirit embodied in the firm’s work climate How managers and employees interact and relate to one anotherPerpetuating the CultureScreening and selecting new employeesSystematic indoctrination of new membersVocal support by senior managersRewarding those who display cultural normsCeremonies honoring employeesTelling and retelling of the firm’s legendsPerpetuating the CultureForces That Cause a Firm’s Culture to EvolveNew challenges in the marketplaceMerger or acquisitionof another firmShifting internal conditionsCauses of Cultural ChangeDiversification into new businessesNew or revolutionary technologiesRapid growth of the firmCompany Cultures Can Be Strongly or Weakly EmbeddedStrong-Culture FirmHas deeply rooted widely-shared values, behavioral norms, and operating approaches.Insists that its values and principles be reflected in the decisions and actions taken by all company personnel.Weak-Culture FirmLacks values and principles that are consistently preached or widely shared.Has few or no traditions, beliefs, values, common bonds, or behavioral norms.Development of a Strong CultureCommitment by the firm to ethical behaviorFounder or strong leader with strong valuesStrong CultureClosely aligning corporate culture with the requirements for proficient strategy execution merits the full attention of senior executives.Healthy Cultures That Aid Good Strategy ExecutionGood Strategy ExecutionAdaptive CulturesHigh-Performance CulturesCommitment to achieving stretch objectives and accountabilityWillingness to accept change and take on challengesPerformanceUnhealthy Cultures That ImpedeGood Strategy ExecutionChange-resistant culturesIncompatible SubculturesPoliticizedculturesUnhealthy CulturesInsular, inwardly focused culturesUnethical and greed-driven culturesChanging a Problem Culture:The Role of LeadershipA strong, out of sync, or unhealthy culture must be changed in order to execute strategy successfully.Competent leadership at the top is necessary for culture-change efforts to succeed.Making a Compelling Case for Culture ChangeSelling the ChangeExplain why and how certain behavioral norms and work practices are obstacles to good execution of strategic initiatives.Explain how new behaviors and work practices will be produce better results.Cite reasons why the current strategy has to be modified, if the need for cultural change is due to a change in strategy.Symbolic Culture-Changing ActionsTop executive and upper management behaviorsCeremonial events to honor exemplary employeesPhysical symbols that represent the new cultureChanging the culture of an organizationLEADING THE STRATEGY EXECUTION PROCESSLeading Strategy Execution requires:Staying on top of what is happening and closely monitoring progress.Putting constructive pressure on the organization to execute the strategy well and achieve operating excellence.Initiating corrective actions to improve strategy execution and achieve the targeted performance results.Staying on Top of How Things Are GoingManagement by Walking Around (MBWA)Is used by leaders to stay informed about how well the strategy execution process is progressing.Involves spending time with people at company facilities, asking questions, listening to their opinions and concerns, and gathering firsthand information about how well aspects of the strategy execution process are going.Leading the Process of MakingCorrective Adjustments A thorough analysis of the situationGood business judgment in deciding what actions to takeGood implementation of the corrective actionsMaking corrective actionssuccessfully requires:A FINAL WORD ON LEADING THE PROCESS OF CRAFTING AND EXECUTING STRATEGYIt is difficult to separate leading the process of executing strategy from leading the strategy process.Crafting, implementing, and executing strategy is a continuous process that requires much adjusting and fine-tuning of the strategy to fit changing circumstances.The tests of strategic leadership are whether the firm has a good strategy and business model, whether its strategy is competently executed, and whether the firm is achieving its performance targets.If these three conditions exist, then the firm has good strategic leadership and is a well-managed enterprise.