According to Lynch (2012), strategic leadership is the ability to shape the organisation’s decisions and deliver high value over time, not only personally but also by inspiring and managing other in the organisation. To develop and maintain strategic leadership, four elements need to be integrated together: the commitment to the company’s purpose; the makeup of the top management team; the capabilities and motivation of people throughout the organization; and a sequence of focused, well-chosen strategic initiatives that can take the company forward. (Wheeler, 2007)
François Michelin of Michelin Rubber, Jürgen Schrempp of Chrysler, Bill Gates of Microsoft, and Gianni Agnelli of Fiat are all examples of successful industry leaders who have led and shaped the direction of their companies. They do not undertake tasks by themselves: they involve others in the organisation at many levels. However, Dell Inc. is a real example of the company who did not know how to set priorities. In 2004, Dell Inc. advertised themselves as the highest quality customer service and support but when they received a broken computer from the customer, promising to send a new one, it suddenly began having a much harder time getting it fixed what was intolerable for a business dependant on mail order. (Wheeler, 2007) Rather than concentrating on those distinctive customer-focused aspects that made it the leader of its industry, the company kept cutting prices in order to beat Asian competitors. The “why” factor always helps leaders to set priorities and realise the relevance of their short term or long term future actions.
Sometimes two similar industry leaders come to an agreement of creating an alliance between them in order to be better positioned in the market. For instance, the Renault-Nissan alliance established in 1999. Since then, Nissan has achieved a notable financial turnaround and Renault has reinforced its basics in terms of operating performance as well as has accelerated its global development. (Source: http://www.renault.com) This story demonstrates effective strategic leadership and its initiatives to a manageable set. Some people argue that team composition within the organisation plays an important role. The thorough diagnose of team members can help to prevent teams from being understood wrongly and having conflicts. A well-known US company Xerox had cut almost 19,000 jobs as there was a real crisis by 2002. Anne Mulcahy, Xerox Chief Executive, started to change the company’s culture and employed a new management team – more skilled presenters and responsible team players. Since then, the situation dramatically changed by 2007 when Xerox had 30,000 jobs.
The starting point for any programme of strategic change is clarity regarding the changes required. (Lynch, 2006) A change options matrix suggests three main areas of strategic change: technical and work changes, cultural changes, political changes. For change to be truly effective, it needs to be implemented at all levels. For success, senior management commitment and drive for change is essential if momentum is to be maintained for effective implementation. To keep colleagues with the leader on this, they need to be highly motivated and the leader needs to know what motivates them. As soon as the organisation leader motivated the staff to support the changes that are to be implemented is therefore a key to success.