Strategy Formulation: A Leader’s Role In Setting The Corporate Agenda
Corporate strategy provides the vision and direction organizations need in order to fulfill their missions. Strategic plans must then layout the corporate agenda for accomplishing that strategy. Determining organizational goals and setting the priorities of the corporate agenda can seem daunting and, quite frankly, can be where trouble often begins for many businesses. This article offers business leaders help.
Influencers To Strategic Priorities: Climate Zones
Corporate behavior and strategic actions are strongly influenced by the current state of the business as well as the positive or negative energy emitting from the leadership.
Soft factors, like emotions and feelings, play a powerful role in determining the pervasive cultural climate of the business. The organizational “climate” is the combination of the company’s emotional, cognitive, and physical states. While difficult to measure, organizational climate is evident in the intensity, endurance, and innovation processes of a company’s work.
At the individual level, especially when it comes to leaders, the business climate influences organizational energy. Likewise, the energy state of the organization affects the energy of individuals — thus shaping corporate behavior and bearing influence on corporate agendas.
Corporate leaders are responsible for unleashing organizational energy and guiding it towards the accomplishment of key strategic goals. Oddly enough, many leaders underestimate the business impact that the organization’s climate has on performance. As a result, they are not fully leveraging or controlling the climate to their benefit.
The effects of the climate within a business closely resembles the way weather impacts human behavior and emotions. A thriving business can be like a beautiful and warm sunny day in terms of the resultant behavioral stimulus it provides for employees. Sunny weather can result in higher levels of energy and optimism. Likewise, stormy weather can create feelings of anxiety or fear.
The employees of businesses weathering troubles and experiencing stormy conditions will feel fear and anxiety as well. Not surprisingly, a strong climate of optimism or fear have influence on corporate strategy. The tone of strategic plans and the blueprints outlining corporate priorities closely follow the emotional mindset of a business’s top executives.
The pervasive climate of any organization can usually be characterized as being in one particular climate zone at any given time. Understanding and working from the context of these climate zones can empower executives to set appropriate corporate agendas that properly motivate organizational action. The four primary climate zones are as follows:
Businesses exhibiting disputatiousness generally feel that “It’s never good enough to win; all others must lose.” These companies are fighters, not lovers and are probably viewed as rapacious competitors within their industries. Companies operating in this climate experience internal tension founded on strong, negative emotions. Tension drives their intensely competitive spirit, which manifests itself in high levels of activity and alertness — and focused efforts to achieve company goals.
In the passionate climate, companies thrive on strong, positive emotions — displaying an incandescent joy and pride in their work. Employees’ possess a zealous enthusiasm and excitement for achieving organizational goals with their super-charged attention directed toward shared organizational priorities. Companies in the passionate climate zone are typically lovers, not fighters and are more motivated to expend energy on creating new products that customers will adore and could not have previously imagined.
Companies in the complacent climate are coasting dangerously on past successes. With weak (yet positive) emotions – such as calm and contentedness — these companies lack the vitality, alertness and emotional tension necessary for initiating bold new strategic thrusts or significant change.
Companies operating in the disengaged climate have nearly given up and are acquiescent to their destiny, slowly yielding to their competitors. Companies in this energy state demonstrate weak, negative emotions — frustration, disappointment and even sorrow. Employees suffer from lethargy and feel emotionally distant from company goals. They lack excitement or hope.
Seeding The Clouds
Understanding from which climate zone your company resides is powerful knowledge to harness and use in formulating strategy. Complacency must be replaced by urgency and disengagement must be reversed entirely.
Effective strategic planning requires that business organizations know their vision well and understand how to focus on the goals and opportunities that represent the highest priorities in helping them accomplish it. Moreover, leaders must compellingly articulate their vision and the imperative behind strategic goals. In order to promote the corporate agenda and convince employees that change is necessary, the organization’s leadership must develop a sense of urgency around priorities and strategic goals. Whether the urgency is to respond to a competitive threat, appeal to the desire to delight customers with innovative products or to aggressively attack competitors head-on and conquer new markets — the urgency becomes the catalyst for change that is needed for employees to rally behind. It becomes the “cause”.
Inevitably, competing communications within an organization can easily crowd out the goals and vision. To help keep the message at the forefront, leaders must frequently and powerfully communicate the vision. They must talk about it often — using it daily to guide decisions. Most importantly, executives must lead by example and make sure the top levels of the organization are following and shaping their behavior to meet the company’s desired mission. This is especially true when trying to reposition to a more attractive organizational climate zone.
The pace of change and uncertainty in today’s economic and business environments require leaders define strategy in the face of numerous obstacles and evolve their plans while the organization is in full motion. Leaders must be able to react to risks and opportunities as they appear, while making choices in priorities that support a consistent strategic corporate agenda.
Resources for Taking Action
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