Part II: Leadership and Organization Development by Design - Organization Strategy

According to Robert Grant, strategy is about winning and strategy links the organization to its environment.

I recall a conversation a year or so ago in which a leader and I were discussing the misuses of the word "strategic"? It sometimes seems that people use the adjective, strategic, to indicate they are visionaries who leave the details to others. Misuse of the term strategic, to borrow a Venita-ism, just "wears me slick". So, let's do a little level setting.

What does "strategy" mean? Robert Grant and Jim Underwood said, strategy is an approach or a plan that answers where and how organizations will compete to make money or create value for their benefactors. For-profit and commercial non-profit organizations also have to ensure they are generating the highest net present value of the organization's future cash flow. Underwood suggests companies who create and execute good strategy are far more successful in achieving the goal of profit maximization than those who do not.

As a quick reminder, Grant wrote the primary benefactors of profits in for-profit organizations are the shareholders. According to Hansmann, in non-profits and government owned organizations the public is the primary benefactor. Non-profits and government owned organizations may also have security holders who are benefactors (e.g., those who have purchased Treasury notes, bonds, T-bills, etc.).

Grant also proposed the firm’s goals and values are or should be directly linked to its strategies. Consequently, developing winning strategies requires significant thinking agility of leaders and staff within organizations. Hickman described leadership as sensing, analyzing, and incorporating environmental changes through processes of interactions between themselves and employees. Yet, he also proposed, while leadership initiates the first steps toward change, employees are expected to be involved as “highly motivated critical thinkers and actors who perform equal but different roles than leaders to meet their mutual goals”. Do you think this sounds like a recipe for employee involvement and engagement? Under these conditions, hoarding information is definitely not a good idea.

So, why should leadership and organization development (L&OD) practitioners care? Great question! Let's assume leadership has a somewhat accurate perspective on the organization's environment. Accordingly, let's also assume leadership has developed a strategy, a critical few strategic goals, and objectives. Let's also assume you have facilitated or they have let you in on their thinking.

Once you are clear about their thoughts, as L&OD practitioners, the job is to ask key questions and provide consultation regarding talent implications and gaps. Why? The reason is alignment. Yes, it is the best way to ensure L&OD work is focused and cohesively meeting the organization's needs. Key questions you could ask and collaboratively answer once you are clear regarding the environment, strategic goals, and objectives include:

1. What must leaders and staff know?
2. How must they behave/act? and...
3. What must they be able to do in order to respond to environmental challenges, execute the strategy, and achieve the resulting key strategic goals and objectives?
4. Which, if any roles, are missing or need to change?
5. How will knowledge, skills, behaviors, roles, and goal accomplishment be reinforced?
6. How will knowledge, skills, behaviors, roles, and goal directives be quickly adjusted as environmental challenges dictate?
7. How will differentiation in rewards for success be leveraged to motivate leaders and staff? 
8. How will you continuously improve and tie outcome metrics to your L&OD efforts?

To be strategic, the big picture or vision is of critical importance and so is some sense of the appropriate level of details or plans. Chaotic and complex times demand some non-linear and inclusive thinking. In these times, to borrow another Amy-ism, we should consider "both/and" when comparing alternatives rather than risk the fallacies of either/or decisions.

After all, truly strategic people should be able to show meaningful outcomes that support their claim of "strategery"! As you may recall, "strategery" was coined by James Downey on Saturday Night Live in a sketch where Will Ferrell played President George W. Bush. The term was later adopted by some in Bush's administration as a joke. Yes, I am joking a little and I am very serious at the same time!

In the next blog, strategic agility will be the topic. Until then, ask and answer the right questions in the right way and be the change you want to see!

Phyllis L. Wright, Ph.D.

View my profile on LinkedIn: www.linkedin.com/in/phyllislajunewright/

Follow @PhyllWright Twitter

This post contains a phrase I adored from one of my former leaders. Her name is Venita McCellon-Allen. She gave me an opportunity, the encouragement, and the motivation to grow! Thank you Venita. The phrase or Venita-ism is "wears me slick"! This post also contains another Amy-ism from Amy Tawney. She could produce these nuggets of gold in a split second flat. This time its "both/and". Don't you love it!

References


Grant, R. M. (1998). Contemporary strategy analysis (Third ed.). Oxford, United Kingdom:

      Blackwell.

Grant, R. M. (2010). Contemporary strategy analysis (Seventh ed.). Chichester, United      
     
      Kingdom: John Wiley & Sons, Ltd.

Hansmann, H. (1996). The changing roles of public, private, and nonprofit enterprise in 

     education, health care, and other human services. In V. R. Fuchs, (Ed.), Individual and 

     Social Responsibility: Child Care, Education, Medical Care, and Long-Term Care in 

     America (pp. 245 - 275). Chicago, IL: University of Chicago Press. Retrieved from 

     http://www.law.yale.edu/documents/pdf/Faculty/Hansmannthechangingroles.pdf

Underwood, J. D. (2002). The new corporate strategy. Oxford, United Kingdom: Capstone

     Publishing.

   

Part I: Leadership and Organization Development by Design Series - Organization Environment

Upon which foundations and according to what structural plans have organizations’ leadership and organization development (L&OD) programs been designed?

Josh Bersin, principal and founder of Bersin by Deloitte, recently noted in a LinkedIn article the following conclusions from 50 or so chief learning officers:

• Leadership development is a critically important challenge.
• To understand leadership, one must understand followership.
• Leadership development programs are too fragmented and not focused enough on company specific and current business strategy.

The first two posts for this blog were focused on conclusions one and two. The next series of posts are dedicated to exploring causes and solutions for the third conclusion...program fragmentation and lack of specific business focus. The discussions will include:

• Organization Environment
• Organization Strategy
• Strategic Agility
• Strategic Organizational Frameworks
• Environmental Dynamism and Complexity
• Munificence: Resource Scarcity or Abundance
• Distributed Intelligence and Accountability
• A Leadership Development Program Model

Let’s begin with organization environment.

Henry Hansmann said there are fundamentally three forms of business ownership in the United States. The three forms of ownership are for-profit, private nonprofit, and public or government-owned. Private nonprofits are categorized as either donative or commercial. Donative nonprofits receive their income from donors who are in effect purchasing services and/or goods to be delivered to a third party. Commercial nonprofits receive their revenue from fees for services and/or goods charged directly to the payor. 

Regardless of the form of business, what is done by organizations should create value. An organization’s environment should inform how leadership practically and strategically guides the creation of value. What is value? Robert M. Grant describes value as the monetary worth of a product or service. If L&OD programs align with building capabilities that increase the worth of products and services, then L&OD programs have a better chance of adding value. So, what is an organization’s environment? 

Ricky W. Griffin proposed an organization’s environment consists of internal and external forces that must be understood from the perspective of change. Forces include economic, government, legal, media, etc. Thomas Cummings and Christopher Worley correctly said major disruptions in an organization’s external and internal environment have the possibility of triggering transformation in response to or in anticipation of those changes. The most recent United States industry illustration is health care. 

Additionally, Jim Underwood described marketing and technology forces as dictating the rate of change. The two combined indicate the level of turbulence or competition in the environment. Why is this important? Two words describe current business environments across the world. They are chaos and complexity. Technological evolution is causing the rate of change to be exponential.

John W. Payne proposed, when uncertainty and complexity increase, leaders take mental shortcuts to quickly reduce the number of options available. Their decisions are based on limited information search and evaluation.  So, what? The question is perfect. Under chaotic, uncertain, and complex conditions, Scott Julian and Elton Scrifres proposed leaders are more likely to mismatch the response of the organization and the demands of the environment.

Potential for mismatch is essentially why L&OD practitioners, executive sponsors/leaders, and leadership industry experts need environmental clarity specific to the business. It provides a pathway to program alignment with the organization’s response to its environmental demands. After all, appropriate response is the stake upon which value creation hinges. 

The next post is dedicated to organizational strategy. Until then, ask and seek answers to the right questions in the right way and be the change you want to see. Let the conversation begin!

Phyllis L. Wright, Ph.D.

View my profile on LinkedIn: www.linkedin.com/in/phyllislajunewright/

Follow @PhyllWright Twitter

References
  
Cummings, T. G., & Worley, C. G. (1997). Organization development and change (Sixth
        
      ed.).  Cincinnati, OH: South-Western College Publishing.

Grant, R. M. (2010). Contemporary strategy analysis (Seventh ed.). Chichester, United 

     Kingdom: John Wiley & Sons, Ltd.

Griffin, R. W. (1990). Management (Third ed.). Boston, MA: Houghton Mifflin Company. 

Hansmann, H. (1996). The changing roles of public, private, and nonprofit enterprise in 

     education, health care, and other human services. In V. R. Fuchs, (Ed.), Individual and 

     Social Responsibility: Child Care, Education, Medical Care, and Long-Term Care in 

     America (pp. 245 - 275). Chicago, IL: University of Chicago Press. Retrieved from 

     http://www.law.yale.edu/documents/pdf/Faculty/Hansmannthechangingroles.pdf

Julian, S. D., & Scifres, E. (2002). An interpretive perspective on the role of strategic control 

      

     in triggering strategic change. Journal of Business Strategies, 19(2), 141. Retrieved from 

     http://www.questia.com/read/5000638778

Payne, J. W. (1976). Task complexity and contingent processing in decision making: An 

     information search and protocol analysis. Organizational Behavior and Human 

     Performance, 16(2), 366-387. Retrieved from http://www.sciencedirect.com.

Underwood, J. D. (2002). Thriving in e-chaos: Corporate strategy for uncertain times. 

    New York, NY: Writers Press Club.