Strategic Leadership

Strategic planning is oriented to enhancing the bottom-line.  Leadership affects organizational performance as well.[1] Therefore, strategic leadership, which can be defined as the formulation and articulation of a vision depicting a social reality and incorporating strategic aims, can enhance a firm’s sustainable competitive advantage.[2] Strategic leadership is an intangible core competency that can give rise to a core capability differential involving reputation.[3] That strategic leadership is difficult to understand and therefore to imitate contributes to its value in no small measure. But a straightforward application of strategic leadership may be thwarted if a tension develops in its exercise.  In particular, the principles behind an enduring leadership vision can be at odds with pressing strategic interests, especially as these profit-interests change while the abstract vision still holds.

Because strategic leadership involves the organization as a whole and its relationship with its environment, it falls on top-level executives to exercise it.[4]  Indeed, a leader’s distance from operations “can generate and establish lofty principles and goals and visions”.[5]  So strategic leadership as used here pertains to executive leadership, stressing the relationship between strategy and leadership.

Strategic leadership relates an organization’s ideologies, identity, mission and view of the macro environment system to its differentiated core competencies. The word relates implies that the leadership vision is not identical to the strategic elements.[6]   Therefore, the visionary and strategic can be at odds.

With regard to the vision component, leaders depict or construct not only a vision of the organization’s mission, but of an encompassing social reality of the environment (i.e. society).[7] Relating the organizational mission to the values in the encompassing environment pertains to the legitimacy and credibility of the vision and the organization. Whereas an organization’s mission is broad or abstract enough to be consistent with values held by the wider society, strategic plans tend to be more tightly oriented to a firm’s exclusive interests or competitive niche. Such plans may thus be at odds with societal interests and values even though they dovetail with the organization’s mission. The wider societal system is not centered on the interests of a leader’s particular organization even though that organization may have a mission congruent with both the plans and societal values.

For example, a hospital’s mission of curing disease may be consistent with a societal value on health.  The hospital’s strategic plan to minimize its treatment of uninsured patients may be consistent with sustaining that particular hospital as it cures disease, even as this strategy is opposed to the societal value on health.  The organization’s interests differ from those of society; the difference is typically labeled as externalities.  Effective strategic leadership aims to breach this gap, satisfying strategic concerns as well as the firm’s legitimacy and credibility.

For a leader’s vision to be regarded as credible, the interpretation of social reality “must not be affected by success-oriented considerations in favor of the corporation”.[8] The interpretation must transcend personal or organizational interests and frameworks to be credible in society. Enhancing credibility and legitimacy from an ideology presented in terms of disinterest is not consistent with efficiency.[9]

With regard to its strategic component, however, strategic leadership is self-consciously and unapologetically oriented to furthering the organization’s exclusive interests. It contains both broad questions of what an organization ‘is’ in terms of its being unique and distinctive among its competitors, and relatively narrow strategic plans oriented to maximizing the tangible (i.e. financial) gain of the enterprise as a method of competition.[10]  It is the latter, dovetailing with efficiency, which can be in tension with the vision in executive leadership.

In short, a strategic leader may have to deal with tension between short-term profit-interests and the relatively enduring vision. This is not to say that the tension is inherent to strategic leader. A good strategic leader wields profit-interests such that they are in line with the vision of what the organization stands for and how it claims to relate to society. Perhaps because CEO’s so often crimp on the pre-established organizational vision rather than let it get in the way of a changed profit-line, the tension has been virtually ignored in writings on strategic leadership. It is even possible that the tension is inherent in strategic leadership even though individual leaders have been able to quickly reorient breaching profit-interests. Abstractly, the tension boils down to a trade-off between broader values evoked in a leader’s vision and relatively narrow values pertaining to strategic planning. Unlike the organization’s mission and the society, strategic plans are not within a leader’s vision. So a strategic leader must have one foot in strategic planning and the other in ‘the vision thing’ (mission and societal social reality).   Holding onto both poles can be a difficult task for a strategic leader, given that both of them are legitimate within the practice of strategic leadership.

Badaracco and Ellsworth provide an excellent depiction of the tension with which strategic leaders must grapple--between strategic and visionary values.[11]  They cite the CEO in the large, decentralized company with a strong faith in autonomous divisions. On the one hand, the abiding values of local autonomy and a sense of ownership at the division level had served the company well for decades. But on the other hand, it was clear that duplication of efforts and higher costs were letting a very powerful competitor with efficient centralized operations make inroads into the company's markets, causing immediate financial damage.   The strategic value of efficiency conflicted with the value of liberty in the leader’s vision, and the heightened competitive pressure exacerbated this tension.  For the organization to be sustained and the leadership remain credible, both values would need to be given weight. 

---

[1]. J. A. Petrick and J. F. Quinn, “The Challenge of Leadership Accountability for Integrity Capacity as a Strategic Asset,” Journal of Business Ethics 24 (2001): 331; S. Finkelstein and D. Hambrick, Strategic Leadership: Top Executives and Their Effects on Organizations (St. Paul, MN: West Publishing, 1996); J. Ciulla, “Leadership Ethics: Mapping the Territory,” Business Ethics Quarterly, 5, no. 1(1995): 5-28; K. B. Lowe, K.G. Kroeck, and N. Sivasubramaniam: “Effectiveness Coorelates of Transformational and Transactional Leadership: A Meta-analytic Review of the MLQ Literature,” Leadership Quarterly 7, no. 3 (1996), 385-425.

[2]. R. D. Ireland and M.A. Hitt, “Achieving and Maintaining Strategic Competitiveness in the 21^st Century: The Role of Strategic Leadership,” Academy of Management Executive 13, no. 1 (1999): 43.

[3]. Petrick and Quinn, “The Challenge of Leadership”; J. A. Petrick et al, “Global Leadership Skills and Reputational Capital: Intangible Resources For Sustainable Competitive Advantage,”  Academy of Management Executive 13, no. 1(1999): 58, f.n. 2.

[4]. Ireland and Hitt, “Achieving and Maintaining Strategic Competitiveness,” 48.; A. A. Cannella and M. J. Monroe, “Contrasting Perspectives on Strategic           Leaders: Toward a More Realistic View of Top Managers,” Journal of Management 23 (1997): 213-237; D. C. Hambrick and P. Mason, “Upper Echelons: The Organization as a Reflection of its Top Managers,” Academy of Management Review 9 (1984):193-206; P. Shrivastava and S.A. Nachman, “Strategic Leadership Patterns,” Strategic Management Journal 10 (1989), 51-66; H. Mintzberg, The Nature of Managerial Work (Englewood Cliffs: Prentice-Hall,1973).

[5]. N. Brunsson, The Organization of Hypocrisy: Talk, Decisions, and Action. In Organizations (NY: John Wiley (1989): 223.

[6]. Ireland and Hitt, “Achieving and Maintaining Strategic Competitiveness,” 48.

[7]. S. Worden, The Essence of Leadership: A Cross-Cultural Foundation  (Phoenix: The Worden Report, 2017).

[8]. G. Enderle, “Some Perspectives of Managerial Ethical Leadership,” Journal of Business Ethics, 6 no. 8 (1987): 661.

[9]. N. Brunsson, The Organization of Hypocrisy ,198, 218.

[10]. L. T. Hosmer, Moral Leadership in Business (Burr Ridge, IL: Irwin, 1994, 237.

[11]. J. L. Badaracco and R.R. Ellsworth, Leadership and the Quest for Integrity (Boston: Harvard Business School Press, 1989).

Second-Term Inaugural Addresses of American Presidents: Of Transformational or Static Leadership?

According to a piece in the National Review, “George Washington might have had the right idea. Second inaugural addresses should be short and to the point. Of course, speaking only 135 words as Washington did in 1793 might be a little severe.”[1] Consider how short, and (yet?) so momentous Lincoln's Gettysburg Address was. The challenge for second-term-presidents, whether Barack Obama or the sixteen two-term presidents before him, is “how to make a second inaugural address sound fresh, meaningful and forward-looking." Almost all of Obama’s predecessors failed at this. Only Abraham Lincoln and Franklin D. Roosevelt made history with their addresses. One stirred a nation riven by civil war; the other inspired a country roiled by a deep depression. All but forgotten are the 14 other addresses, their words having been unable to survive the test of time. Even those presidents famed for their past oratory fell short.”[2] This is a particularly interesting observation: surviving the test of time being the decisive criterion. Even a president whose silver tongue mesmerizes a people of his or her time may not deliver ideas that survive beyond being a cultural artifact of the president’s own time. What of an address that is quite meaningful in its immediate time yet does not pass the test of time so as to be recognized as a classic? 

A treatise becomes a classic only after it has gone beyond its own epoch because the ideas are not only cultural artifacts of the writer’s own world. Put another way, a scholar can never know whether his or her treatise will endure through the ages. The objective of a scholar can be said to commit ideas to writing that contain something more than the cultural artifacts that by definition are limited to their source-epoch. High public officials, whether of states or unions thereof, may proffer very sweet vocal wine and yet the taste goes out of fashion as soon as the culture changes.  In terms of inaugural addresses, the enduring message must place the consternation of the day in a bigger picture so as to assuage anxiety and angst. This is easier said than done.

According to the National Review, “(a) surprisingly bitter Thomas Jefferson could not match his great first inaugural; an unusually wordy Ronald Reagan could not live up to his ‘Great Communicator’ sobriquet; a decidedly humble Bill Clinton could not rise to the occasion. While most reelected presidents cannot resist the temptation to use their speeches to look back on the past four years, Lincoln had little choice but to look forward.”[3] His genius was to do so by placing the past war in perspective, citing a higher purpose. His way forward was healing and reconciliation rather than retribution and vengeance. To make the United States truly united once again meant more than merely getting the confederate states back. The healing and reconciliation Lincoln sought had to have a solid foundation, or they would have been dismissed as mere rhetoric by an audience otherwise bent on retribution and profit-taking at the Southerners’ expense.

I’m not sure that being forward looking is requisite, however. The key could be the inclusion of ideas that put something major at the time of the address into perspective by drawing on higher principles. Ultimately, it is the latter that transcend particular times and cultures. Moreover, people thirst for the invocation of higher principles, as most of our quotidian lives are too operational or procedural for such connections. Connecting the dots to ideas that are relatively enduring—meaning and value transcending the contours of the daily discourse in the public square—turns out to be decisive in being able to teach ears yet unborn.  Put another way, meaning-making can transcend the speaker’s own time if the meaning incorporates more fundamental principles that those that are limited to the dominant ideology of one’s age.

The meaning-making can be static in providing meaning to the present, or dynamic in the sense that something major should change (i.e., forward-oriented). The invocation of fundamental principles suggests that the change being sought is transformative rather than merely regulatory or reforming. 

Transformational leadership can be defined as meaning-making that draws on values and principles whose vitality and validity extend beyond the leader’s own epoch and is oriented to fundamental change. The meaning provided is not applied merely to the status quo. That is, if a second-term president wants to continue to lead, he or she can make sense of the present in terms of values and principles that transcend the age. This is static leadership. 

The leadership can be transformational if the meaning also pertains to a transformed vision for the society, rather than merely making sense out of the present. The objective here is to move the society from the present to a desired condition in the future by invoking principles that have meaning in both conditions. Although the condition being sought is typically in the same epoch, the principles drawn on are more solid if they have validity and value in other epochs too, thus being more than cultural artifacts of the leader’s own age. 

I suspect that few second-term U.S. presidents have been transformational leaders after a few years into their presidencies. Put another way, even the presidents who sounded amazing may be found after the fact to have suffered from a want of ideas that have value even in the upcoming world not yet born. Whereas sweet candy today might give one a sugar-high, to survive the rigors of time better nourishment is necessary. In the context of inaugural addresses, the nourishment being sought is in the form of fundamental ideas whose value transcends the age and yet can explain the present and possibly an alternative in the age that is transformational in nature.

1. George E. Condon, Jr., “The Second-Term Inaugural Jinx,” National Journal, January 20, 2013.

2. Ibid.

3. Ibid.

Enabling Non-Empathetic Leaders: The Case of Paterno at Penn State University

In January 2011, the illustrious football coach at Penn State University, Joe Paterno, learned that prosecutors were investigating his longstanding assistant coach, Jerry Sandusky, for sexually assaulting young boys in the football team’s locker room. Paterno even testified before a grand jury on the matter that month. He had been informed of the rapes back in 1998, yet he had kept the pedophile on even though additional boys would be at risk in doing so. 

That same month—January 2011—Paterno also began negotiating to amend his contract that would not expire until the end of 2012. By August 2011, Paterno and the president of Penn State reached an agreement in spite of the fact that both were by then embroiled in the Sandusky investigation. “Paterno was to be paid $3 million at the end of the 2011 season if he agreed it would be his last. Interest-free loans totaling $350,000 that the university had made to Mr. Paterno over the years would be forgiven as part of the retirement package. He would also have the use of the university’s private plane and a luxury box at Beaver Stadium for him and his family to use over the next 25 years.” 

The university’s board was kept in the dark. Directors who raised questions were “quickly shut down.” In the end, the board gave the family virtually everything it wanted. The board even threw in free use of specialized hydrotherapy message equipment at the university for Paterno’s wife. In other words, Paterno (and his surviving family, following his death in January 2012) got an even better deal as the scandal came to include Paterno himself.

 Joe Paterno, head football coach at Penn State, viewed by a student as "Pa" in PA        Matt Rourke/AP

The issue, according to the New York Times, is “the significant power” that Paterno “exerted on the state institution, its officials, its alumni and its purse strings.” A subsequent investigation funded by the university’s board of directors found that Paterno and other university officials had protected, in effect, a serial predator in order to “avoid the consequences of bad publicity” for the university, its football program, and even Paterno’s own reputation. Similarly, before Joe Ratzinger became the pope of the Roman Catholic Church, the archbishop of Munich had refused to defrock a pedophile priest because of the damage that scandal would wreck on the “universal church.” The priest was sent to a parish where he served as the youth minister. In both cases, the reputation of an organization—a collective—was given priority over the physical and emotional damage to individual human beings. The priority displayed here is troubling.

The question is perhaps how it is that such people get to the top as have no empathy for others yet fierce concern for themselves and their respective organizations. Merely that such people are retained is itself a red flag concerning organizational selection and retention of people for top positions. Skill as a coach (or as a church administrator) is apparently all that matters, even if the applicant or occupant is psychologically willing to look the other way concerning additional boys getting raped. The issue is that such a psychological profile is nonetheless handed significant power in an organization and can extract significant benefits for himself and his own even in the midst of being investigated or implicated indirectly given his position having presided over the abuse.

Moreover, we could be less enamored by leadership generally; it should be easier to deprive a sitting leader of power even if he or she has not lost favor in the organizational hierarchy.  In other words, boards of directors should not allow particular officials in the organization so much power and celebrity that they are no longer expendable, given how wrong an organization can be with respect to its leaders. Either human nature comes up short, or the artifice of organizational accountability is insufficient.  Too much value is put on organization position (i.e., upper echelon offices) and the associated power.  Too much is  virtue is projected onto organizational leaders. Furthermore, boards are too reductionistic concerning what justifies someone in gaining and retaining a post. Max Weber’s distinction between the person and his office can excuse some pretty bad behavior. Accordingly, the criteria for selecting and promoting organizational leaders could be widened.

In short, we do not object to the rise of unscrupulous people until it is too late.  We assume they are other than they are because of what we associate with high position and celebrity, then we act as if even an unscrupulous person has a lifetime right to his or her position.

See Skip Worden, Ethical Leadership, available at Amazon.

Source:

Jo Becker, “Paterno Won Sweeter DealEven as Scandal Played Out,” The New York Times, July 14, 2012. 

Putin Likened Protesters to "Weak Birds"

At the conclusion of the 2012 Asian-Pacific Economic Cooperation meeting in Russia, the host president, Vladimir Putin, likened the birds that had not following his motorized glider south to the Russians who did not follow him. “Only the weak ones,” he quipped. “The weak ones didn’t follow me.” Elaborating, he added, “not all of the cranes flew, and the leader, the pilot, has to be blamed because he was too fast in gaining speed and altitude and they were just lagging behind; they couldn’t catch up.” In other words, the Russian protesters had been blaming him for what was in actuality their own weakness—not his. A leader must accept the inevitable misappropriation of blame because being erroneously blamed goes with being a leader.

Putin could not have been entirely objective on the protests against him.      

Source: Democracy Chronicles

The full essay is at "Putin Likened Protestors to Weak Birds."

Source:

David Herszenhorn and Steven Lee Myers, “For Putin, a Flight of Fancy at a Summit Meeting’s Close,” The New York Times, September 10, 2012.

On Nietzsche applied to power in business, see On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management (available at Amazon)

Leading at the Top beyond Appearances: The case of John Boehner, Speaker of the U.S. House of Representatives

In the wake of President Obama's mission to execute Osama bin Laden, Speaker Boehner issued a statement complimenting his rival in the White House. In contrast, Sarah Palin gave George W. Bush all the credit. The Speaker, too, could have gone with political expediency. Therefore, for the Speaker to have publicly acknowledged Obama's victory as America's more generally involved political self-discipline. Speaker Boehner had sought to apply self-discipline, moreover, to his decentralized leadership style from the moment of his swearing in. Given the consolidating nature of power, such a leadership style in the U.S. House of Representatives faced considerable head winds.

The full essay is at "Leading at the Top beyond Appearances."

On the Nature of Principled Leadership

What is principled leadership? Simply whatever a leader decides? Or even worse, believes? If so, does the content shift with the sands from one leader to the next? This would seem to invalidate any means of comparing one leader's rendition from another. That it to say, leaving the "filling in the blank" to any leader who wants to be principled opens the door to leadership by convenience under the cover, or subterfuge, of ethics as a means of self-restraint. Ironically, do-it-yourself principled leadership may actually be unethical. So it is vital that we ask ourselves, is a durable definition even possible?

Ethical codes of conduct easily get mired in miasma as they traverse from the finitude of personal ideology to the power that comes with  universality and even the absolute. As universally applicable as an absolute, principled leadership is seemingly a normative constraint even on leaders who do not value the particular principles. The greed, ambition, immaturity, and the associated selfishness that together run Wall Street may appear to hang in the balance.

Kant claims that principles that can be universalized without contradiction should be universalized. (Image Source: builddiscipline.com)

However, even old Kant would admit that universalizing an ethical principle, or maxim, to be binding on everyone is not a sure thing, for the moral law does not by its normative nature approach the force enjoyed by public legal justice. This distinction is all that an egregious ego needs to slip through the semi-permeable normative membrane of a puffed-up ethical principle claiming for itself the mantle of universalizability and even absolute value (as if the principle were the assigner of values in place of reason).

On leadership generally, see The Essence of Leadership, available at Amazon. 

Non-Positional Leadership: A Matter of Charisma?

The concept of non-positional leadership is typically associated with charismatic leadership.[1] The Hebrew prophets are a case in point, as none had any formal civic position.  To be sure, a non-positioned leader need not be charismatic; such a leader can be effective in utilizing persuasion to get his or her position (i.e., "vision") sufficiently adopted by followers to become the default.  Obviously, a positioned official, whether in the upper echelons of a large corporation, government, or religious institution, need not “stoop” to persuasion; power from authority can be sufficient for an official's will to be done. However, does that evince leadership or simply raw power?

Gandhi epitomized non-positional leadership. He never held a formal office in religion or government. Is the strength of non-positional leadership necessarily moral?  Image Source: Idleindia.com

Authorized power is typically also reckoned as leadership, especially if the official’s decision is unpopular at first, yet quickly implemented and effective in the end. In fact, merely the stature of “high” position can give a decision itself the semblance of leadership. Modern society lavishes an extraordinary amount of credence on organizational position itself, regardless of the particular occupant. Such positional power, as distinct from positional leadership, is excessive, even reckless. For example, Richard Fuld was able to inflict Lehman Brothers with an overwhelming amount of risk, and for so long, in line with a warped “vision” and without having to lead in the sense of persuading others of his vision. To assume almost blindly that CEOs are not only “natural” leaders, but also persons of high caliber in terms of skill and character, simply because of their position is foolhardy and yet this is typically done in modern society.

---

1. On “non-positional” leadership, see David Burkus, http://theleaderlab.org/