In his paper, “What is Strategy?”, Michael Porter explores some popular misapplications of the term strategy in a business context. He first highlights a frequent counterfeit of strategy: operational effectiveness. This is an appealing counterfeit since it deals with activities, which he acknowledges are at the center of strategy. The disconnect he observes has to do with reluctance to make trade-offs, which requires prioritizing and positioning (a limiting activity). Instead, many managers attempt to treat all activities as though they could be equally optimized for any organization. Activities, and more specifically interconnected systems of activities, should be the basis of strategy. A business’s choice of activities and method of execution have the ability to position it uniquely within a market. On the other hand, efforts to imitate competition in the choice and execution of activities can blur competitive positioning and undercut strategy. Knowing which activities to perform, how to perform them and when there are opportunities to improve operational effectiveness requires managers and business leaders to make trade-offs. Often these trade-offs will limit growth opportunities while preserving competitive positioning. When the right trade-offs are made, it will be more difficult for competitors to effectively imitate activities that would endanger existing market share. Trade-offs are critical to an effective strategy. Porter warns that “Among all other influences, the desire to grow has perhaps the most perverse effect on strategy. Trade-offs and limits appear to constrain growth. Serving one group of customers and excluding others, for instance, places a real or imagined limit on revenue growth. Broadly targeted strategies emphasizing low price result in lost sales with customers sensitive to features or service. Differentiators lose sales to price sensitive customers. “Managers are constantly tempted to take incremental steps that surpass those limits but blur a company’s strategic position” One take away is to watch for decisions that attempt to avoid a trade-off and instead accommodate multiple priorities simultaneously. When that occurs, it would be wise to ask whether the decision is likely to enhance or blur strategic positioning. If it blurs strategic alignment, it may be worth...

Jim Collins and Jerry Porras wrote a paper, Building Your Company’s Vision, which rehashes some of the material from prior books. Two ideas that they draw on in this paper include Big Hairy Audacious Goals and A focus on Core Ideology. The argument they make is that in order to establish a meaningful vision, awareness of existential purpose and a determination to invest in an ideal future are necessary. The idea behind Big Hairy Audacious Goals, shortened to BHAGs, is that they embody a future world or state in which the core purpose of the business has been fully realized and its potential reached. In such a statement, the management of a company is effectively declaring what success will look like, given the current understanding of the purpose for which the business exists. The authors first discussed purpose in terms of ideology, suggesting that in effective companies, a purpose is driven by something more fundamental and meaningful. In other words, core purpose (as they call it) in the absence of an ideological driver, is insufficient to establish a compelling vision. In order for a vision to be truly motivating there must be something deeper than financials and market share. On the whole, I find that Jim Collin’s conclusions and analogies fall flat with...

Many of my thoughts on leadership revolve around the congruence of values between leader and follower. I argued that Leadership Erosion is eating away at majorities and consensus with the end being irreconcilable segmentation. When common values cannot be established there is little hope of common objectives on social and political issues. One such case today is found in Ukraine. View Larger Map Ukraine is a country ideally situated to observe the clash of values that erodes the effectiveness and reach of leadership. One the east is Russia, a reluctant adopter of western capitalism and liberal thought. On the west is Europe, forward thinking, capitalistic and largely democratic. Within the Ukraine, there are people who align with both value systems. Recent fighting brought this division to the forefront. President Viktor Yanukovych has received pressure as a result of his alignment with Russia on financial and energy resource issues. The opposition argues that alignment with the European Union is more desirable. At the heart of the disagreement is a conflict of values which some in the media are describing as a conflict between Obama and Putin. While this has less to do with the actual western or eastern leaders, it does trace back to what those leaders stand for. If Yanukovych, or any other leader, hopes to unite, inspire and transform the Ukrainian people, the first step must be a unification of values; an agreement on what is worth living and dying for. Until there is greater congruence of values, it’s unlikely any leader will succeed in uniting the people and putting Ukraine back on solid, independent...

Weaknesses feel so much more visible than strengths to many people. In the consideration of leadership, there is a tendency to allow focus to dwell on correcting flaws rather than developing strengths. Recent research indicates that weaknesses may not be holding leaders back as much as previously thought. With the exception of what Zenger and Folkman call “fatal flaws”, much more potential improvement is available to those leaders who focus on strengths. Strengths represent opportunity for leaders. Whether a leader invests in his strengths should be viewed opportunity cost. A focus on trying to fix weaknesses may cost a leader a great deal of growth opportunity. Time frame is helpful in identifying both whether to focus on a strength or a weakness and which strengths to focus on. Cultural tendency is to set new year’s resolutions. However, that time frame may be too short when considering personal development. Questions about who the leader wants to be in five to ten years from now may bring more clarity and perspective. Another benefit associated with a focus on strengths development is increased engagement and retention. Strengths building can be very rewarding and can improve outcomes in immediate ways. Immediate rewards increase engagement and satisfaction, and in some cases can diminish the negative aspects of weaknesses. When it comes to leadership, there’s a lot more value in playing to personal strengths than dwelling on weaknesses, as long as the leader stays in touch with his weaknesses so they don’t become critical...

One key value that affects the effectiveness of leadership is fair play. Expectations, implied or expressed, are the basis of whether actions are seen as exhibiting fair play. Teamwork requires that team members trust that their expectations will be met. The expectation of fair play derives from human attitudes toward reciprocity and equity. A great historical account that illustrates this important value in a leader is when Abraham Lincoln made an agreement with Henry E. Dummer, John Hardin and Edward D. Baker that they would rotate the nomination every two years and would help each other win the election. After Mr. Lincoln had helped others win their elections, it was his turn. In the face of some resistance he wrote to them, reminding them of their agreement and citing that “turn about is fair play”. Reckless Self-Interest The political environment today is rife with excess and unfair play. There seems to be an endless stream of kickbacks, misuse of funds, inappropriate relationships and many other types of behavior that does not meet expectations. A notable, although not isolated, example of this behavior is seen in the actions of Chris Christie’s staff in recent months. Political retribution, manipulation and coercion all demonstrate a reckless self-interest on the part of a leader. Consequences of this type of behavior are almost universally negative in the long term. Alliances are short lived, trust is absent making skepticism high and outcomes are rarely in the best interests of the people who are represented. Decreased Influence A lack of fair play in leadership will eventually result is a diminished capacity to influence others and effect real change. Leaders who brush aside fairness and equity, who fail to reciprocate when expected, will find that their personal and positional power decrease over time. Unfortunately, many leaders learn this disappointing outcome when the stakes are highest, in times of...

Values represent those principles and desires to which individuals ascribe meaning and purpose. In the extreme, values guide individuals in life and death situations. In routine daily activities, values inform decisions that affect quality of life, happiness and even personal liberty. Values guide the assessment of outcomes and in many cases compose an image of an ideal society. Peaceful, harmonious society is most often a reflection of common shared values. Contentious societies result when there is discord related to core social values. Alignment of values and its effect on communities is central to a discussion of leadership. The effectiveness and power of a leader is proportional to both alignment of and individual commitment to common values. Where there is alignment and commitment, leaders can effect transformational changes in a society. Where alignment and commitment are absent, leaders will struggle to establish consensus and unity. Leaders and followers must share common values in order for a leader to be effective in his position. Erosion of Leadership As consensus regarding core social values erodes, so does the ability of leaders to emerge and create unity. As value segmentation increases, the scope of a leader’s influence diminishes. This erosion of leadership with its inherent dangers was a principle concern to the founders of America. In his farewell address, George Washington cautioned that segmentation of this nature could be used to undermine the power of the people. “However combinations or associations of the above description may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion.” There is evidence of this having occurred in the persistent gridlock of American government today. Segmentation of common values is indicated by the growing number of political parties which represent increasingly diverse constituents. When the influence of powerful lobbying groups is factored in, the overall effect of leadership erosion is significant. When no single leader or value base can rally a majority opinion, there can be no society wide movement or change....