The chapter explains the genesis and scope of the book. We describe the different strategic leadership challenges. These challenges illuminate distinct sets of strategic priorities as well as patterns of loss to which organizations have to respond and adapt.
This chapter is designed to help senior management teams detect if their companies face a developmental challenge. It refers to the leadership dilemmas and business opportunities confronting a senior management team when an industry starts to mature. As our framework relies on an outside-in approach, in order to be able to diagnose the challenges they face, managers first will need to develop specific skills in reading and synthesizing environmental changes. The initial pages of this chapter focus on how to achieve this. We then move on to an assessment of the inner tensions that organizations experience when responding to competitive and environmental pressures.
In the current chapter, we will outline the practical steps that should be taken to mobilize an organization confronted with developmental change, to fine tune any initial diagnosis, and to modernize management processes. Our goal is twofold. First, we will propose a sequence that applies to every strategic leadership challenge. Second, we will highlight the elements that are specific to developmental change. Identifying and understanding the patterns of competitive change will allow senior management teams to more effectively and rapidly determine organizational priorities as well as to pinpoint the sources of resistance to them.
This chapter focuses on the good years, during which there is apparently healthy growth in sales and profits and no suggestion of storms gathering on the horizon. We do not wish to suggest that the good years should not be enjoyed. Rather, we intend to highlight that senior management teams have to ensure that their companies prepare for the inevitable strategic challenges that, sooner or later, they will have to navigate.
The creative challenge refers to the leadership dilemmas and business opportunities confronting a senior management team when an industry faces disruption. This chapter seeks to help senior management teams assess creative challenges to their companies and design the most effective adaptive interventions in response to these disruptive threats. Historical evidence demonstrates that if new technology or a radically new business model disrupts an industry in which you are already a successful player, the probability of your remaining a market leader is low.
This chapter provides frameworks and tools to cope with the creative challenge. It will cover four steps: awakening the organization, designing initial steps, sustaining the balance between productive tension and a holding environment, and emphasizing organizational purpose and boundary expansion.
The emergency challenge refers to the leadership dilemmas and business opportunities confronting a senior management team when a country enters into recession. This chapter is about how to mobilize your organization to take advantage of recessions. We provide tips about how to prepare your company not only to alleviate the adverse effects of the next recession but also to enhance its current competitive position. To achieve this goal, managers need to recognize how the recession virus infects profit and loss statements. They also need to understand how to mobilize the organization to prepare for and navigate the economic downturns.
The exercise of leadership in times of recession demands a rare combination of strategic foresight and management skills. To this end, in the previous chapter, we examined the salient regularities of the macroeconomic context evolution. We aimed to provide order and structure to the evolution of an environment (i.e., the overall economy) that often appears mysterious or dark. Managers who assess macroeconomic evolutionary patterns are prepared to take advantage of recessions, ready to mobilize their companies. This chapter will explore how this can be done.
The structural challenge relates to the leadership dilemmas and business opportunities confronting a senior management team of a commodity-based company when commodity prices decrease. In this chapter, we deal with a fundamental leadership challenge that competitors in the commodities industries usually face: recurrent price changes. Commodity prices follow regular oscillations of varying lengths. The constant ups and downs entail recurrent changes of priority. The switch of strategic focus determines a different set of organizational losses that might resist new priorities. Yet, senior management teams need to shift priorities repeatedly, adapting to long-term trends and their anticipated effects. The goal of this chapter is to facilitate the sensemaking of cyclical price fluctuations and enhance the likelihood of successful strategy implementation.
The exercise of leadership when commodity prices decrease is uniquely complex owing to the competing mechanisms that guide the evolution of prices. Estimating the long-term price trends is much more difficult than during the developmental challenge, which brings with it its own challenges and affects sensemaking capabilities. The existence of simultaneous underlying commodity cycles makes it particularly difficult to diagnose the structural challenge. In this chapter, we dig into the difficulties of navigating this challenge.
Facing concurrent challenges simultaneously is not a hypothetical situation but something real that has a dramatic effect given the combinatory impact of the different challenges. One of the salient characteristics of the strategic leadership challenges is that they often arrive simultaneously. Therefore, a fundamental skill for members of a senior management team is the ability to detect the convergence of these challenges and put in place a strategy to tackle them. This chapter is about helping senior management teams to detect, sort, order, articulate, and put into effect a strategy to address concurrent challenges.
The objective of this final chapter is to address the future, allowing for new perspectives on the four strategic leadership challenges on which we have focused in the previous chapters. First, we describe some of the fundamental changes the world is facing. Next, we analyze their effect on the four challenges. In short, our expectation is that the four challenges will continue to be at the center of business activity for the foreseeable future.
This appendix aims to provide additional support on adaptive leadership for those unfamiliar with this conceptual approach. It is insufficient to substitute the published books but will give an essential toolkit for understanding the concepts used along with the pages. While this understanding is useful for all who would like to exercise strategic leadership, this chapter will significantly help educators who would like to take the lessons of this book to the classroom.