Abstract
Based on the crucial trait of innovation that a leader is expected to have, scholars with a vast and rich background in leadership have formulated various theories that go hand in hand with exemplary or rather strategic leadership. Strategic thinking is one of them. In a tactical thinking, various strategies have been developed and implemented.
This paper clearly reveals various theories on how a strategy is developed and implemented. The paper also subdivides the key theories of strategy development into two major groups: the classical and learning strategy theories. The classical theories include the design school of thought by Selznick, Learned and Chandler, and the position school by Porter.
A strategy is a plan to conquer. Innovation is the creative ability to build up new ideas. Change involves developing fresh ideas that re-energise an organisation. Since all these aspects must be availed when implementing any strategy, the paper goes a step further to illustrate how the three link within the context of strategy development, implementation, and leadership.
For instance, the leadership of an organisation ought to learn from its mistakes, change its past misleading plans, and ensure that it continually comes up with new ideas that translate to meeting the formulated deliverables of the organisation. The ability of a leader to develop strategies, implement them, learn them, and understand what need to be changed for the betterment of the organisation is key to innovation and strategic leadership.
Therefore, the paper also reveals how strategic leadership develops and implements change in the organisation. It provides an insight on critical analysis of the classical strategic processes in a selected organisation, Harvard School of Economics for this case. This example is used to vividly demonstrate how the three schools of thought are imperative in strategic leadership and change.
For this school to develop and implement its strategy, design, planning, and positioning were paramount. The paper details how innovative leadership is able to carry out strategy development and implementation. It further reveals how strategic leadership and innovation are crucial in a change process besides demonstrating how classical theory is more people-oriented. It also indicates how human resources are engaged in designing, planning, and positioning for the success of change processes in organisations.
Finally, the paper goes further to provide a detailed recommendation on the need to improve strategic processes within an organisation through careful selection of the business, innovative leadership, strategic task identification and structuring, defining the long-term and short term organisational goals, development of talents and skills, and selective investment.
Introduction
Every organisation, country, institution, or even individual embraces leadership. The field of leadership is so crucial and one that determines the destiny of all these bodies. As such, poor leadership translates to poor performance and vice versa. For any organisation that wishes to achieve its set goals and objectives, it has to be aware of the implication of strategy development and implementation.
The available scholarly literature of key theories of developing and implementing strategy clearly portray the interrelationship between strategy, innovation, and change. A strategy is developed in the pursuit of answering the question how a leader will overcome the period ahead. Innovation enables an organisation to develop unique and new ideas.
Change in an organisation is mainly linked with creativity, which is the ability to come up with new ideas. According to Mumford (2003), creativity involves the production of new, unique, and useful products. Strategic leadership must therefore understand the need for creativity, innovation, and continuous change in an organisation.
Theories on Strategy Development and Implementation
There are various theories that have been advanced on strategy development and implementation. The theories aim at enabling leaders to become winning managers in organisations. They can be classified into two major groups: the classical and learning strategy theories.
The classical theories range from the design school of thought by Selznick, Learned, and Chandler to the planning school of thought by Ansoff, and the position school by Porter. In the classical strategy theory, the choice of industry determines the profit that a firm gains and its market ability.
Basic Design School Model
Source: (Mintzberg et al. 2003)
In classical theories, a strategy is developed by carrying out a need analysis of the organisation. For example, leadership may realise that there is a need to increase the profit margin, gain a larger market share, improve the level of customer satisfaction, or even complete its projects.
In fact, Beer and Eisenstat (2000) affirm that many organisations only succeed in drafting good strategic plans though they lack the ability to implement them. In the classical schools of thought, leaders are not guided by the past. They do what is right now. The major guidelines are how to plan, how to position, and how to design.
The learning strategy theorists completely counter the classical theories. Proponents of this theory pose it that learning drives strategy. The strategy development team members should learn from their mistakes, change past plans, and ensure that they continually solve problems.
Source: (Johnson et al. 2011)
According to Grant (2008), the ability of the strategy development and implementation team to learn and to understand what they learn is paramount in strategic management. Learning theorists also expound on organisational learning. In strategic leadership, leaders have to continually acquire new ideas, become more creative, and manage change.
This strategy makes organisations experience growth and development.In addition, de Witt (2005) argues that learning theories also provide insights on how companies create knowledge through strategic thinking. Strategy developers and implementers who apply these theories have to understand the purpose of knowledge development in the organisation.
Strategic leadership therefore evaluates the levels of profit, the percentage of market share, the levels of customer satisfaction and approval, and the past mistakes in project developments. Leadership therefore learns from it past mistakes. This is how a strategy is developed in learning theories. The process of strategy implementation is similar in both classical and learning theories.
The process involves analysis of an organisation’s operation context, selecting the strategic choices available, and assessing and choosing the best alternatives. According to Capon (2008), resources are always scarce for organisations. Therefore, strategic management teams should ensure competitive resource management.
There exist a relationship between strategy, innovation, and change. A strategy is a plan that an organisation comes up with in order to conquer in its business venture. This plan is paramount to the achievement of organisational goals. Innovation is the ability of organisation leadership to come up with unique ideas that steer it towards achieving better results.
Change is the new ideas and results that an organisation targets. All these are aimed at making the organisation more competitive. When an organisation leadership comes up with a plan to conquer its venture, it must therefore develop unique ways of doing things. The new ideas result in transformations. The three forces are interrelated as shown:
A critical analysis of selected strategic process
A critical analysis of selected strategic process in an organisation sheds more light on strategic thinking and strategic leadership. This paper takes the example of the Harvard School of Economics. For this school to develop and implement its strategies, design, planning, and positioning were paramount. The organisation adopted the classical strategy theories.
After carrying out its needs analysis, the organisation realised the need for increasing its profits in a bid to improve its market share. According to Pearce and Robinson (2011), the process of strategic management must begin with needs analysis. This forms the foundation of the evaluation process.
After adopting the classical theories of strategy development and implementation, the leadership of the Harvard School of economics followed a three-stage process. This process involved context analysis, strategic variables identification, and best option selection. In contextual analysis, strategic leadership of the Harvard school of economics ensured that it understood itself and the condition of its environment.
The leadership examined the available resources, the abilities, the liabilities, and weaknesses of the organisation to enable it to major on perfecting its strength in attracting business students from all over the world. The weakness of the organisation to integrate business courses with science courses was also resolved by silently scrapping science courses that had a low market share.
After a clear evaluation of the environment, the leadership realised that the world is tended towards business. In fact, Johnson et al. (2011) confirm that strategic management makes organisations flexible and dynamic. This meant that there was a need to intensify the quality of economics graduates from this school. Leadership also came up with plans to win over the customers by ensuring that they were satisfied.
Analysis of stakeholders of the institution also enabled it to reveal their needs to satisfy them better. Today, this strategy has greatly improved the market segment of the Harvard School. The other analysis that leadership in the Harvard School carried out is on its competitors. The leadership analysed how the graduates of this school compared with other graduates in the job market.
This strategy indicated that graduates of this school were more competitive relative to business graduates from other schools. The leadership department therefore devised a design that ensured that its competitors would not reach its standards. According to Capon (2008), organisations must formulate strategies that are within the ability of their resource base.
Since this organisation had successfully trained competitive business graduates, it was easier to intensify the same venture using sophisticated software in teaching. The next step in the implementation was the identification of strategic options that existed as a way of creating competitive advantage. According to Mintzberg (1998, 2003), strategic processes offer competitive advantages to organisations.
Strategic leadership and thinking at this level utilised the brainstorming strategy, which enabled it to come up with a variety of profitable projects. In addition, this strategy also enabled the Harvard School to identify its threats and opportunities. The greatest threat to the success of this institution was the declining market share, which was eliminated through rigorous advertising across all media platforms.
The third step involved the evaluation and selection of strategic choices, which involved a detailed assessment of strategies that was followed by selection of the best. From a variety of proposed projects, each of them was evaluated in the context. The financial factors like break-even points and cost analysis were considered. The strategies that were within the financial ability of the Harvard School of Economics were adopted.
They included cost effective marketing, advertising, and quality control. After the evaluation, the best strategic option was chosen. The only strategic options that were considered were those that were in tandem with the vision, values, and objectives of the Harvard School of Economics. These strategies were implemented for the success of the school as it is today. It was through strategic planning, design, and positioning that this organisation became very competitive.
Assessment of the engagement of people in this strategy
An assessment of the level in which people within the Harvard School of Economics are engaged in the strategy affirms the viability of it. The classical theory is more people-oriented since it uses people as a resource. According to Pearce and Robinson (2011), human resources are engaged in designing, planning, and positioning.
The affirmation of the level of engagement of the people in the implementation of this strategy can be realised through evaluation (Schumpeter 1942). The three-step strategy implementation process involves human resources at various stages. First, the whole process of strategy implementation in Harvard School of Economics was people-centred.
The process was geared towards better profits and more market share. Both of these objectives have people at heart. Secondly, the process of contextual analysis and environmental assessment involved people specifically the strategic leaders of the school who began by understanding the entire people in the organisation.
If the leadership did not clearly understand the people in this organisation, the implementation of the strategy would not have succeeded. Every leader including management and supervisors was involved in the evaluation of the environment. Thirdly, the actual implementation of the strategy involved all the ‘publics’ of the organisation including employees, stakeholders, students, the media, government, customers, and even financial institutions.
The competitors were evaluated followed by a thorough analysis of their competitive ability to ensure that the competitors who mainly included other universities and institutions of higher learning did not outdo the Harvard School. Customers were also analysed followed by the laying down of strategies of retaining them to ensure that no customer felt unsatisfied or moved to another institution.
To maintain this level of customer approval, employees and the leadership team had to be more innovative in relation to their competitors as confirmed by Davila et al. (2006) who say that companies cannot develop via cost cutback and reengineering only without innovation as the main building block in realising forceful development.
The institution leaders also gained from this innovation. With innovation supervision, monitoring and evaluation became simpler. For example, in the process of innovation, the organisation came up with a new way of allocating duties, appraising employees, students, and even rewarding their performance.
A good example was the application of central monitoring computers by supervisors in the Information Technology department of the Harvard School. From his office, the supervisor is now able to monitor what every employee is doing in real time thus enabling leaders to save time and energy besides making their work more efficient. The second phase of strategy implementation involved people as well.
The process involved brainstorming where various stakeholders including employees and management gave their opinions. A variety of projects came up with the most feasible ones being adopted thus affirming the high level of people involvement that this strategy adopts. At this step also, the human resource of the Harvard School was used to solve the existing problems to ensure that all stakeholders were at ease with their responsibilities.
In addition, it also ensured that everyone in that organisation discharged his or her duties efficiently and effectively. People were also used in the implementation of the third face of this strategy. Major decision makers in the organisation were used to look into the available options. From the suggestion of many stakeholders, the management chose to adopt some projects that were feasible.
Because of the number of employees, the organisation had to choose from a variety of many projects. Pearce and Robinson (2011) affirm that all strategies require people to implement. People were also involved in decision-making. At this step, they came up with the best strategic designs and plan for implementation. The human resources in the Harvard School of Economics were used to draft an implementation procedure besides being involved also in design, planning, and positioning.
Recommendation on how strategic processes can be improved
From the strategic processes analysed in this paper, it suffices to offer some recommendations pertaining to the area that need improvement as far as strategy development and implementation are concerned. Firstly, the strategic leadership should carefully carryout the selection of business.
It should embrace innovative leadership, strategic task identification and structuring, be creative, define the long-term and short-term organisational goals, develop talents and skills, and encourage selective investment. When selecting a business venture, a careful situational analysis needs to be carried out. According to Grant (2008), strategic leadership should guide the organisation on the feasibility of every business venture that interests it.
Organisations should not just invest their resources in any business undertaking. The possibility of attaining high levels of customer satisfaction, good profit margins, better relationship with suppliers and financial markets, and even employee satisfaction should be prioritised. A strategic analysis of the environment should be done way before the investment.
It should be noted that every organisation has an inner and outer environment and that both environments should be evaluated. Another recommendation is that the leadership of every organisation should be innovative. Grant (2008) says that leadership should also be the major inventor in an organisation. While innovation is the introduction of new ideas, persons, products, and business functions, an invention is an inimitable or new device, process, composition, method, or finding that has been realised.
An invention can also be an enhancement upon a machine, a product, or even an alternate method of realising a process. Innovation enables an organisation to develop unique and new ideas. When leadership is innovative enough the organisation is able to stand out from its competitors. According to Grant (2008), apart from processes, products, and systems, opening of new markets and development of new sources of supply of raw materials are also parts of the innovation.
Strategic leadership should steer the organisation from redundancy to excellence through innovation. This strategy raises the competitive ability of the organisation. Another recommendation on strategic processes is that the leadership should be creative enough to initiate change. According to Mumford (2003), creativity involves the production of fresh and constructive products.
A creative leader must possess a certain skill or idea that he or she can use, or that can be used by others to develop new things. Such a leader will come up with something completely new, for example, a product, explanation, a piece of work, or even a valuable device. In addition, organisations must clearly define both short-term and long-term goals to enable them keep on benchmarking besides acting as plans to guide it towards its specific objective.
Goals are road maps for successful organisations. Finally, organisations should allow development of skills and talents. Organisations are always hunting new technologies, ideas, human resource, and even policies that can win over news customers and even maintain the existing ones. The need to increase the quality of ideas, products and devices, to save time, and or reduce production cost is generated from the traditional problem solving methods.
Conclusion
In conclusion, strategic thinking and leadership continues to be the key drivers of success in organisations. Various schools of thought have been advanced towards this end. These theories are grouped into learning theories and classical theories. In strategy development, there is a close relationship between innovation, change, and the strategy itself.
In the implementation of strategies, leadership has to engage people in the organisation for its success. Competition among institutions, individuals, and functions increases on a daily basis. The need to outdo competitors and or have products that are more appealing will result in the need for strategic innovation, change, and development of an organisation such as the Harvard School of Economics discussed above.
In this light, every organisation should identify and nurture talents. Various methods can be adopted to improve strategic processes in organisations as recommended in the paper.
References
Beer, M & Eisenstat, R 2000, ‘The Silent Killers of Strategy Implementation and Learning’, Sloan Management Review, vol. 41 no. 4, pp. 29-40.
Capon, C 2008, Understanding Strategic Management, Pearson Education, Harlow.
Davila, T et al. 2006, Making Innovation Work: to Manage is, measure it, and profit from it. Upper Saddle River: Wharton Scholl Publishing.
de Witt, B & Meyer, R 2005, Strategy Synthesis: Resolving Paradoxes to Create Competitive Advantage, Thompson Learning, London.
Grant, R 2008, Contemporary Strategy Analysis, Blackwell, Malden, MA.
Johnson, G et al. 2011, The Practice of Strategy from Exploring Strategy: Text and Cases, Pearson Education Ltd: Harlow.
Mintzberg, H et al. 1998, Strategy ‘And over here, Ladies and Gentlemen, the strategic management beast, Prentice Hall, Safari FT.
Mintzberg, H et al. 2003, The Strategy Process: Strategy Formation, Prentice Hall, Safari FT.
Mumford, M 2003, ‘Where have we been, where are we going? Taking stock in creativity’, Creativity Research Journal, vol. 1 no. 15, pp. 107–120.
Pearce, J & Robinson, R 2011, Strategic Management: Formulation, Implementation and Control, Organisational Structure, McGraw Hill, Boston.
Schumpeter, J 1942, Capitalism, Socialism and Democracy, Harper & Row, New York.