Strategy Insight

Professor Watkins emphasizes the importance of matching strategy to the situation appropriately. The author says that there are essentially four types of business situations that new leaders must address.

Each business situation has different characteristics, challenges, and opportunities. Yet, every business has a portfolio of situations. A new leader must figure out which situations fall into each category. He calls this the STaRS model.

1)  Start-up: There isn’t much existing infrastructure to build on. The new leader must assemble the capabilities including people, funding and technology to get a project or business off the ground. Among other things, to be successful, he must do things right from the beginning, energize people about the possibilities and focus on learning about the technical issues, products, markets, technologies, projects, and strategies. Early wins are putting the right team together and achieving strategic focus as well as determining what not to do and building discipline within the organization.

2) Turnaround: Like the start-up, there isn’t much existing infrastructure to build on. The new leader should take on a unit or group that is in trouble and get it back on track. She or he accomplishes this by cutting it down to a defendable core fast and then beginning to build it back up. Among other things, to be successful, the focus should be on reenergizing demoralized employees and other stakeholders and handling time pressures in order to make a quick, decisive impact. The leader requires authority, backed by political support, in order to make tough decisions such as painful cuts and difficult personnel choices. In this situation, everyone recognizes that change is necessary, but not what changes may be necessary. Affected constituencies may offer significant support and a little success goes a long way.

3) Realignment: This type of organization has significant strengths as well as serious constraints on what you can and cannot do. Typically, there is some time before making major calls. As a result, you can learn about the culture and politics. The intention is to revitalize a unit, product, or process that is drifting into trouble. The major issue here is that the organization is in denial. It is essential to understand what made the organization successful and why it drifted into trouble. To be successful, the leader must deal with deeply ingrained cultural norms that no longer contribute to high performance and convince employees that change is necessary. The successful leader must secure consistent public backing and support to confront the need for change. The leader must teach people about the problem

4) Sustaining success: The organization has significant strengths and serious constraints on what you can and cannot do. In this situation, the successful leader plays good defense by avoiding decisions that cause problems. He should develop the financial and technical resources to sustain the core business as well as exploit promising new opportunities. He should find ways to take the business to the next level. Typically, there is some time before making major calls. As a result, he can learn about the culture and politics and work to preserve the vitality of a successful organization and take it to the next level. S/he will need to invent the challenge and redirect resources.

It will be interesting to view the actions of President Obama in the context of these models.

This entry was posted on January 21, 2009 at 5:26 am and is filed under Hiring, Leadership, Strategic Plans, Strategy. You can subscribe via RSS 2.0 feed to this post's comments.

Tags: Strategy, Leadership, Barack Obama, President Elect Obama, Hiring, CEO