Chapter 14
Strategic Leadership
This session will cover an opening profile, major strategic roles of leadership, a theory of
strategic leadership, and a scenario.
Opening Leadership Profile: the Strategic Role of Yegs Ramiah at Santam
Santam is the largest short-term insurance company in South Africa. Santam faced an industry
category with little differentiation, high levels of commoditization, rampant price competition,
and a race to the bottom that threatened the profitability of the industry. Yegs Ramiah led a
process to redefine the identity of Santam. She sensed the need to appeal to people of all races
and ages; extended company’s reach into the growing middle class; found ways to change the
conversation about insurance from its being trivial and dispensable to its being important and
meaningful, with enduring value and substance; inspired production of a catchy advertisement
that established the brand as fresh, contemporary, and deserving attention from all ages and
races.
Strategic leadership is about the roles and responsibilities of executives in senior leadership
positions, and the power and authority their positions give them. It implies leading people and
driving organizational management of operations, activities and resources for achieving
immediate and sustained success.
Major strategic roles of leadership are outlined below:
1. Planning the efficient use of organizational resources, and moving the entire
organization’s resources in a unified direction for enhanced success.
2. Programming refers to enabling the use of culture and history for members to find
connections between their present efforts and the newly planned efforts.
3. Performing refers to strategic role execution.
4. Profiting refers to helping actualize the benefits of organizational functioning through the
alignment of organizational roles with key contingencies.
5. Perfecting refers to developing the capacity of the organization to navigate the dynamic
environments, for sustained success.
© Taylor & Francis 2015
1. Planning
Planning is a central strategic role of any global leader. Planning requires developing and using
strategic awareness about the resources inside and outside the organization. A useful
methodology for understanding these resources is the 9-M framework, referring to the nine
categories of resources: manpower (human resources), material (supply chain resources), method
(technical resources), money (financial resources), manufacturing (operational resources),
machinery (technological resources), marketing (social resources), motivating (leadership
resources), and manipulating (governance and fiduciary resources). In the 9-M framework,
planning includes identifying the availability and application of each resource.
A key strategic role of leaders while planning is to establish criteria for measuring and driving
performance outcomes. A popular methodology for outcomes planning and assessment is Kaplan
and Norton’s (1996) balanced scorecard. With the balanced scorecard, outcomes are evaluated
using four perspectives: financial, customer, business process, and learning and growth. Gupta
(2007) has proposed an augmented version, with three more perspectives: exchange, networking,
and workforce.
There are weaknesses of the planning role: many leadership situations are not necessarily planable. Leadership is also about tactfully negotiating situations as they emerge.
2. Programming
Programming, as a strategic role of global leadership, is concerned with the processes of
identitywork. A key leadership role is to bring about alignment in the members’ self-identities
and their organizational identities, by ensuring that organizational plans are tied to individual
goals, interests, performance appraisals, and career progressions.
Another critical leadership role is to promote intra- and supra-organizational dialogues for
enhancing collective learning, development, and use of organizational identities.
Weaknesses of programming-based strategic leadership: in dynamic environments, the number
of plausible options multiplies, and it becomes increasingly difficult to identify the most
effective programming. Lack of programming gives rise to causal ambiguity that makes it
“difficult for competitors to understand and, hence, to imitate” and allows the firm to create a
competitive advantage.
3. Performing
© Taylor & Francis 2015
Performing is the most widely endorsed strategic role of global leadership. Performing leaders
are universally considered effective, and non-performing leaders are considered ineffective.
Performing as a leader is a function of the discretion attributed to the leader. The amount of
discretion depends on organizational effectiveness; as organizational performance improves,
leaders tend to gain more trust and discretion, but during times of organizational decline or
malfeasance, additional constraints may be imposed on leader discretion.
High discretion performing
When leaders enjoy high levels of discretion, they tend to perform a range of roles. According to
Richardson (1994, 39), most contemporary organizational leaders tend to be strategists who have
the necessary knowledge, skills, and attitudes to facilitate an “across all leadership fronts”
approach to their jobs, by simultaneously employing a range of leadership styles. He identifies
nine fronts of leadership performing roles:
1. classical administrator
2. designer planner
3. role-player manager
4. political contingency responder
5. competitive positioner
6. visionary transformer
7. self-organizing facilitator
8. turnaround strategist
9. crisis-avoider strategist.
Low discretion performing
In public organizations and in situations of organizational decline, leaders tend to face significant
constraints on their discretion. In constrained situations, leaders recognize the entire context, and
shape a process of guidance based on the following four components, to set a new strategy in
place:
1. challenging the status quo
2. symbolic amplification of the meaning
© Taylor & Francis 2015
3. agenda shaping
4. exemplary followership.
Sufficient discretion performing
From a scholarly perspective, whether a leader has sufficient discretion to help the organization
perform competitively and effectively is more important than the question of whether this
discretion is high or low. To help the organization be competitive, a leader performs five roles:
1. strategic direction
2. managing a portfolio of diverse resources
3. organization building (including culture, ethics, and controls)
4. managing multiple constituencies
5. developing operational leadership.
4. Profiting
Profiting, as a strategic role of global leadership, is concerned with helping to identify and
actualize the benefits that the organization and its constituencies perceive to be of value. Leaders
do so by identifying and sensitizing the participants about the relevant and critical contingencies.
One way to classify benefits is transactional and transformational. Transactional benefits entail
preserving the day-to-day order based on rewards and consideration. Transformational benefits
entail inspiring future-oriented performance and foundation development.
Vera and Crossan (2004) note three contingencies that influence the emphasis on
transformational versus transactional benefits:
1. Environment: in dynamic environments, transformational benefits are preferred. On the
other hand, in stable environments, transactional benefits are preferred.
2. Firm performance: when firms are performing well, transactional benefits are favored;
when they are performing poorly, transformational benefits are favored.
3. Stage of organizational life cycle: the birth stage is chaotic, lacks rules and norms, and
puts a premium on transformational benefits. In the growth stage, transactional benefits
are favored. In the maturity stage, transactional benefits continue to be valued. In the
decline stage, transformational benefits once again become preferred.
© Taylor & Francis 2015
5. Perfecting
Perfecting, as a strategic role of global leadership, refers to taking an entrepreneurial approach to
develop their organization to generate a sustainable advantage. Perfecting allows leaders to
develop an innovative value system for the organization and the extended enterprise, and
includes identification of all salient requirements to make the solution whole.
One of the essential steps in perfecting is to acquire meta-awareness and meta-knowledge for
guiding the developmental path of an organization. According to the “Austrian” school, this
requires leader to use the market process theory. A leader’s strategic role is to discover
information from several constituents, and choose a path whose value is greater than the best
alternative commonly known to the market.
Through perfecting, strategic leaders develop the capacity of the organization to continually
discover new opportunities, and to act on them to generate and sustain advantage.
Strategic leaders need to exercise, what Gupta, Macmillan, and Surie (2004) refer to as
entrepreneurial leadership. Entrepreneurial leadership entails enacting scenarios by “framing”
the appropriate opportunities, “absorbing uncertainty” about the ownership of the property rights,
and “path clearing” for pursuing original discoveries.
The perfecting role emphasizes leaders who can foster a dynamic capacity in the organization for
sustainable, culturally sensitive, gender-centered, and meaningful leadership. The perfecting role
is about strategically correlating the initiatives for shaping, managing, and actualizing
appropriate environmental scenarios, casts of people, and portfolios of resources.
A Theory of Strategic Leadership
GLOBE 2014 study (House et al. 2014) advances a general theory of strategic global leadership
based on leadership behaviors that will lead to success for senior executives and their
organizations, in a range of cultural contexts transcending national boundaries. The theory
identifies two sets of competencies:
1. seven mission-critical leadership competencies, where high-performing CEOs score
about 6.0 on a 7-point scale and differ substantially from low-performing CEOs
© Taylor & Francis 2015
a. visionary, performance-oriented,
competent, integrity, diplomatic
decisive,
inspirational,
administratively
2. five important leadership competencies, where high-performing CEOs score between 5.0
and 5.5 on a 7-point scale, and differ substantially from low-performing CEOs
a. self-sacrificial, collaborative, participative, team integrator, bureaucratic
These competencies can be mapped onto the five strategic roles:
1. Visionary competency is likely to be most relevant for planning.
2. Self-sacrificial, team-integrator, and participative are likely to be most relevant for
programming.
3. Performance-oriented, decisive, and administratively competent are likely to be most
relevant for performing.
4. Diplomatic and collaborative are likely to be most relevant for profiting.
5. Integrity and bureaucratic are likely to be most relevant for perfecting.
Senior executives who aspire to succeed in their roles need to cultivate, mobilize, and apply
various competencies—of their own and of the members they are leading—in ways that support
high levels of performing, programming, profiting, and perfecting.
Scenario: Strategic Leadership Action Cycle
Historically, the company used a product and geographic matrix. Some products were managed
globally and others were managed locally. It was difficult to serve the needs of large global
clients that wanted packaged deals. This discovery led to a strategic decision to realign the
historic, product-push business units into eight global, consumer-aligned business units, for
designing, marketing, and delivering products. Each of the eight global business units was led by
a new role—a (global) vice president. The company aimed at a gradual shift of power and
influence in the company from product and region to consumer-focused category. Performance
of eight vice presidents varied, providing insight into what kinds of future roles each player is
best suited to assume, and the developmental support required by each.
Questions:
1. Evaluate the strategic leadership at company XYZ using planning approach.
2. Evaluate the strategic leadership using a programming approach.
© Taylor & Francis 2015
3. Evaluate the strategic leadership using a performing approach.
4. What is your early assessment of its strategic leadership from a profiting approach?
5. How effective is the strategic leadership at company XYZ in perfecting?
© Taylor & Francis 2015