Strategic Leadership and Decision Making

PART THREE

Teams and Decision Making in the

Strategic Environment

14

ORGANIZATIONAL PROCESSES AND LEADERSHIP REQUIREMENTS

The U.S. defense industry helped win the Cold War. Now it is engaged in another tremendous challenge: winning the peace. Every U.S. citizen has a stake in the future of the industry, which has played a vital role in modern life. It helped create the global village by inventing jetliner travel and space-based telecommunications, it spurred the development of digital computers, and it revolutionized access to space with the space shuttle and scientific probes to other planets (Augustine 1997).

INTRODUCTION

The U.S. defense industry is a conglomerate of companies working in a global environment to supply the Defense Department with the vast range of materials and products, from shoe strings to stealth aircraft, needed for national security. It is an organization of organizations, a system of systems, that under a single, fragile term gathers corporations and firms of all sizes and focuses them on the security interests of the U.S.

Great, far-reaching, exemplary, and revolutionary progress might begin in the minds of individuals, but accomplishment is often the result of the convergence of other resources, people and money best represented by the term organization.

BACKGROUND

Earlier chapters described the environment where public servants, or private entrepreneurs and managers, operate. Characterized as a context of "permanent white water," or as an environment that is volatile, uncertain, complex, and ambiguous, it levies special demands on strategic leaders who must operate successfully, and master tricky and precipitous currents.

The qualities most useful in transitioning from an operational stratum to one with higher challenges and demands are: the ability to function conceptually at a high level, to form and work with teams, and to lead in a process of consensus decision making. These qualities are identified in the literature of Stratified Systems Theory, in the results of the Strategic Leader Development Inventory, in individual assessment feedback, in personal commitments to development, and in understanding consensus decision making. A strategic leader, committed to utilizing a high performing team as a way of successfully coming to grips with the policy and operational environment, is well on the way to advancing to more senior levels of responsibility.

WHAT ARE ORGANIZATIONS?

Organizations are fundamentally social structures where an individual in association with others has the potential to reach certain levels of fulfillment that might otherwise be unattainable. Organizations supply both a condition and a context for dealing with our various environments. Man is by nature gregarious, and seeks to join with others to achieve common purposes. An individual with an interest in a military career as a soldier, becomes a member of an army. Organizations represent a culmination of a social order that links the individual to a collective body that in turn provides certain goods to the individual, while it simultaneously serves society.

A school is a learning organization; our community is a governing and service-providing organization; and the line of work we ultimately enter may be a business organization, a

service organization, an industry or production organization, or a professional organization. In other words, "organizations are social inventions or tools developed by men to accomplish things otherwise not possible. They are social inventions that take a variety of people, knowledge, and usually, materials of some sort and give them structure and system to become an integrated whole" (Litterer 1973).

It is the character of organizations to gather the interests, needs, and desires of people into an entity that represents what it is that they want. Thus, a school gathers together the teachers and people of a society and transmits its culture and mores to the people. A hospital gathers together its physicians and other health care providers and its technology for the diagnosis and treatment of those who are ill. A government gathers together the range of citizen services-police and fire protection, economic development, the provision of roads, sewers, and other public works that also may be consistent with the basic needs of the governed-to express a certain quality of life for them.

Organizations wax and wane with the needs of a society. At times, a society might need to have the protection of large military forces, or of "big" government, or of directed education, or health care, or of specific voluntary societies and organizations that protect the wetlands, and certain threatened species. At other times, society might be able to dispense with some of those organizations, and allow more freedom, or simply the opportunity to organize in different ways. Thus, a conscript army might become voluntary; education, after a certain level of required schooling, might also become voluntary. Large medical centers might give way to decentralized clinics that are more accessible to people. In short, organizations have a kind of life that responds to the vagaries of the environment.

CHARACTERISTICS OF ORGANIZATIONS

STRUCTURAL FRAME. Virtually any text or treatment about organizations provide some taxonomy of attributes or qualities that can be derived from organizations. In Reframing Organizations, Bolman and Deal use the device of the "structural frame" to identify the parts and components of an organization, and of their relationship to each other, both internally and externally.

SIZE. An organization could also be characterized in terms of its size, and in some instances size alone will be a factor in the strategic environment. The Boeing Company, the world's leading commercial jetliner manufacturer, announced that it will buy McDonnell Douglas, the top builder of military aircraft. The new company will be the world's largest aerospace enterprise with assets of nearly $44 billion dollars, and a workforce of nearly 210,000 employees. This consolidation creates a firm that will have instant impact on domestic and international issues associated with the aircraft industry. Size matters! Similar organizations, the Department of Defense, The International Red Cross, Greenpeace, Nike, and Reebok reflect size as a factor.

INTERNAL PROPERTIES. But there are also internal properties. In Reframing Organizations: Artistry, Choice, and Leadership, Bolman and Deal cite four "properties" of organizations:

1. Organizations are complex, because of the work, the variety of people, internal divisions (e.g., offices, branches, directorates), and relations with other components outside the organization. This follows from the notion described by VUCA. It is the very mix of task and work, people, communication, problem solving and decision making, and their permutations and combinations that produce both causal and accidental effects in any given circumstance.

2. Organizations are surprising, in that any prediction of the impact of plans considered in reaching a decision are not fully reliable. The actions of a leader can be misinterpreted by others, or as sometime happens, interpreted to fit a particular model held by one of the participants. The Iran-Contra scandal seemed to be caused in part by the interpretations of some members of the national security council staff as to the exact intentions of the President. Alexander George, writing in his book, Presidential Decisionmaking, discusses what he calls impediments to decision making in organizations, including tendencies to be narrow and parochial in identifying problems or in protecting the interests of one's own organization. Overstating the severity of problems, early dependence on proposed solutions, manipulation, and the use of procedural routines may be flaws and have negative effects on policies that are adopted.

3. Organizations are deceptive, in that structure, culture and practice frequently mask things that may really be occurring. The locker room of some professional or collegiate sports teams may be a better index of the true character of the team than the playing field itself. Ralph Nader exposed evidence that indicated that General Motors was producing a model of automobile that was "unsafe at any speed". Physicians, clergy, teachers, attorneys, jurists, and members of other respected professional organizations have sometimes concealed and withheld information from the public. Many organizations have hidden certain kinds of information that would be scandalous and harmful to the organization.

4. Organizations are ambiguous. Trying to figure out what really happens is complicated by such things as the quality and reliability of information, or the ability to properly identify the problem, or the size of the organization. It is not easy to know what might really be going on in an organization, and how the leader may be influencing its members.

OTHER WAYS TO CHARACTERIZE ORGANIZATIONS

MECHANICAL MODEL. There are still other ways to characterize organizations. One way is to see them in terms of a mechanical model which visualizes an organization in terms of inputs, processes, and outputs. In such a view, an organization is very much like a machine which might take a piece of metal or plastic, subject it to heat and pressure and other forces, and produce a component of an automobile. However, even in the mechanical view, and especially in terms of strategic decision making in government, the simple model becomes complex.

A simple input-output model describes inputs in terms of a set of information, options, and recommendations that are processed by the decision maker, and describes outputs as a complementary set of decisions, or actions for implementation. The process, comparable to a series of computerized machines on the factory floor, consists of a series of stages that inputs and outputs pass through. These stages are characterized by a cadre of people--gatekeepers, special assistants, counselors, secretaries, and confidants--whose perceived task is to help the decision maker understand the environment, and the sets of problems that emerge from it. A danger is that the problem may be so influenced by ministers and counselors that the decision maker may not see pure inputs; similarly, an executive decision might be distorted or even not acted upon by the bureaucracy or organization. In fact, at times, some agent acting on behalf of an executive might short circuit the process (Alexander George).

BIOLOGICAL MODEL. So, even in the mechanical model, rational and logical in its problem solving, there is the influence of living beings in organizations. That leads to still another view of an organization as a biological model; in this view, an organization passes through stages of birth, growth, maturity, aging, and death. In reality, most organizations could be viewed in that frame. An organization is born out of a need; it grows and reaches a level of survivability; it exists for a period of time in a stable, maturing, and developing condition--profits are up, students are graduating, people are healing from surgeries, détente and peace is achieved; it ages gracefully, or not, perhaps evolving, changing form-consolidating, downsizing, expanding-and ultimately reaching a stage where its product, or its service, or its role is no longer necessary or relevant.

For example, emergency management in the last half century in the United States has moved from a concentration on protection of citizens from nuclear attack to protection from hurricanes, earthquakes, and floods; from an office in the White House to disaggregated offices in several federal agencies to re-organization as an independent agency. Its programs have often been declared irrelevant, and the Congress has seemed to announce its death more than once without shedding a tear. Yet, it survives. Businesses come and go. CEOs move from one corporation to another, often with a mandate to "heal" a sick patient on some form of life support system. Organizations grow and change in reaction to the stimulus of the environment and what it demands at any point in time.

Each of these models, the mechanical and the biological, might be used as analogies, or frames when attempting to analyze the condition of an organization. But, despite the notion of a frame, many organizations do not seem to have boundaries. They are made up of multiple constituencies, their resources are drawn from disparate sectors of the economy, government, or the private sector, and the impact they have is experienced in widely separate quarters. A company that mines coal, for example, is connected to commercial power companies, to regulators of the federal Department of Energy, to other regulators in the Environmental Protection Agency, to OSHA, to unions, lobbyists, investors, utilities, local and state jurisdictions, the media, and other energy sources.

CONCLUSION

People affiliate with organizations to pursue some purposeful activity of benefit to them at a particular time. Organizations can arise from a variety of sources-economic, recreational, educational, artistic-and can be either mechanistic, or biologic; in the latter case, organizations sometimes seem to take on a life of their own and a specific life-cycle can be discerned. However an organization is structured, it holds great potential to enable its members to achieve a level of success they might not otherwise attain. On the other hand, an organization can become self-serving, and ignore or otherwise limit opportunities for its members.

Most strategic leaders carry out their role in an organization, however it is cast and molded. The Chief of Naval Operations, the Speaker of the House of Representatives, the Secretary of the Department of Transportation, and the CEO of IBM are all strategic leaders in different environments, all volatile, uncertain, complex, and ambiguous. Even those who seem to set off on a singular quest (one thinks of Ralph Nader) and burn with the zeal of reform, often end up having to establish, and/or work with organizations whose influence, assets, and other resources can be leveraged against formidable, stable, and powerful organizations.

ORGANIZATIONS AS SYSTEMS

Organizations represent a complex mix of the following: vision, goals, objectives, and purposes; routines and practices; people; machines; and both an internal (culture, values, ethics) and external relationship (other organizations, interest groups, and the environment). Knowing an organization's purpose, what it does, and how it does it seldom tells a leader all that needs to be known: the more complex parts of an organization are its vision, values, power, and how these elements affect the people in the organization.

Some of the complexities and interrelationships between and among the CEO and different levels of employees, and a concern for the environment, are seen in the following excerpt describing a corporate organization:

In the second story of a wooden lodge overlooking a meadow and pond veiled by mist, Tom Chappell, the CEO and co-founder of Tom's of Maine, exhorts his 75 employees to contemplate nature. Normally these workers would be churning out fennel toothpaste, calendula deodorant, honeysuckle shampoo and other aromatic aids to personal hygienics. But on this overcast Tuesday morning, the company' executives, salesmen, toothpaste mixers and warehouse workers are gathered at an off-site location to discuss the company's commitment to the environment as articulated in its "mission statement." Attendance at the meeting is mandatory; Chappell has shut down the company's plant, at a cost of more than $100,000 to insure that everyone is present.

Chappell kicks off the morning program with a brief homily that traces his own environmentalism back to a childhood spent among idyllic river valleys and mountain ranges near Pittsfield, Mass., and on the coastal islands of Maine. . . he suggests that everyone turn to their neighbor and briefly describe their own relationship to nature, which they all proceed, self-consciously, to do.

Next, the employees participate in a 90-minute game that uses a computer model to simulate a local fishing industry. Competing in teams for imaginary ships, cash and troves of fish, they plunder and inevitably destroy the fragile ecosystem. In the aftermath of their collective remorse, they are asked to discuss, in small groups, ways to improve their environmental stewardship, then to present their ideas...to the entire gathering. The morning concludes with a poem. As the meeting adjourns, everyone strolls outside for a company picnic, set beside a hillock of evergreens beneath a luminous gray sky (Barasch 1997).

Four areas in this chapter, elaborated on in following chapters, are vision; values and ethics; culture; and power. All organizations implicitly have these "areas", though their strength and influence is not always recognized nor easily acknowledged.

VISION

GM Vision Statement...

World Leader in transportation products and related services. We will earn our customer's enthusiasm through continuous improvement, driven by the integrity, teamwork, and innovation of GM people.

For a strategic leader, the first priority may be the conception and articulation of what it is that the organization can do and be, and the way to get there. In their book, Leaders, Warren Bennis and Burt Nanus say: "Leaders articulate and define what has previously remained implicit or unsaid; then they invent images, metaphors, and models that provide a focus for new attention. By so doing, they consolidate or challenge prevailing wisdom." This task, conceptual at first, but communicative at a later time, seems to be central to finding an appropriate niche for an organization, one that is differentiated enough to attract members and focused enough to bring together their power and influence on some critical task.

Typically we expect a leader to be several things. The President of the United States is simultaneously the head of state, the commander-in-chief of the Armed Forces, the head of the executive branch of the government, the principal ambassador for foreign policy. The CEO of a major cooperation is expected to have similarly broad roles, including an economic one, in leading his or her corporation. Annually at the State of the Union address to the nation, or at the stockholder meeting, the leader expresses his or her vision of what the organization is about and what it brings to its citizens or shareholders. "One of the things about leadership is that you cannot be a moderate, balanced, thoughtful, careful articulator of policy. You"ve got to be on the lunatic fringe." GE's Jack Welch sees the role of a strategic leader as someone who takes time to see beyond the stars.

Beyond the techniques and processes of developing and articulating a vision, a strategic leader needs to do two things. First, there is the notion of gathering information about the total environment, both internal and external. If broadly conceived as an ongoing process, a leader can gather information from clients, constituents, competitors, allies, friends and foes; in short, from a range of people with interests in issues germane to the organization. Second, if this gathering stage is followed by continuous processing and analysis of the information, the leader, in concert with others, can begin to "make sense" of the environment, and can begin to shape and communicate the vision that would provide the focus for the organization.

This two-step process seems to be a necessary part of strategic leadership, and seems to emerge directly from the attributes of strategic leaders described in the SLDI (conceptual flexibility, consensus decision making, and team development). While a vision may be derived in a rational way, we can also recall that in classical terms, in the Bible or in epics like the Odyssey, the heroes were mindful of dreams and other non-rational inspiration to help them visualize situations and deliver the people from an enemy, or solve some other threatening problem. A strategic leader has to be tuned to both the rational and the irrational, the linear and the circular, the scientific and the artistic.

Many organizations are led through implicit visions of members of the organization. That may be sufficient during early stages of the life of the organization where the momentum and enthusiasm of its members propel it to a position of initial stability. But, at other times, when the organization is enmeshed in a fight for institutional survival (the downsizing of components of the Army, for example, or an airline going out of business), leaders can gather information and begin to reformulate the vision of that particular organization so that it emerges from the crisis better focused on its possible futures.

The role of the strategic leader is to move the organization forward toward some objective; it can be as diverse as implementing some program of government, or directing the stewardship of a nation's religious beliefs. The articulation of a vision is part of the complex role for a strategic leader.

VALUES AND ETHICS

An organization must have a set of values from which ethical practices logically flow; organizations might also use the term philosophy. NASA's vision (ad astra per aspera) creates an image of an organization whose values revolve around rigorous science and engineering and the indomitable spirit of man. The Coast Guard describes its core values as honor, respect, and devotion to duty. The values of organizations like the Boy Scouts are set out in oath and motto. Private corporations and businesses also express their values with slogans.

That organizations would have a set of core values should not be so surprising. Members influence the organization, and an organization often draws people with common interests, values and ethical codes; the organization then simply externalizes the private values of its individual members. A church, for example, espouses a set of values in itself; in turn, the congregation solidifies the values of the organization while privately practicing those beliefs. An environmental organization attracts people interested in preserving natural aspects of things; these values are subscribed to by its members who promote those precepts as members of the organization. This symbiotic relationship between the organization and its members is critical to organizational survival.

Beyond the question of personal integrity that suggests a set of commonly held moral beliefs and practices, a strategic leader must espouse a set of values for the organization. A strategic leader must serve as an exemplar to other members of the organization in a responsible way, by faithfully serving the interests of the organization. Such a view calls for strategic leaders not to abuse their roles and positions of power.

The larger task for the strategic leader is to engender in the organization a sense of responsibility for both the internal and external environments. For a public official, that means following democratic authority, participating in public policy determination, and considering fully the impacts of such decisions on the whole of society. Exercise of a public office carries with it the obligation to object to policies that might be harmful or discriminatory to certain segments of society. For a private sector official, it may mean appropriate responsiveness to a board of directors, and to consideration of the impacts of a strategic decision on the environment. The role of the strategic leader is to foster and maintain a climate of values and ethical practice within the organization through which it can fulfill its public and private responsibilities.

CULTURE

An organization that adopts an ethical and value-oriented environment has taken the first step toward establishing a culture that promotes the aims of the institution. The subject of culture itself will be treated more fully later in this text. Our interest here is in the role of the strategic leader in understanding and shaping the culture of an organization.

Every organization, and every block or component within any organization has a way of doing things. Some of them are trivial, though they would include: how long you take for lunch; whether you pay attention to the boss; if not, who really does count; what reports are important; and whom to have coffee with. At a more important level, culture includes an ethical climate, a sense of stewardship for the resources of the organization and for its members, and a sense of civic and public responsibility. Organizations, for example, might adopt a school and serve as mentors for children there; or support environmental issues, or advocate equal opportunity.

To some extent culture can be developed and implemented in much the same way that other changes are introduced in the organization. Such an initiative might well lead to a breath of fresh air in the organization. Pope John XXIII allowed many changes to flow from a world-wide meeting of the bishops of the Catholic Church in the early 1960s; a cultural shift in certain practices in the church. Discontinuing the use of Latin for ceremonies was a significant change.

In most instances, culture develops unnoticed. A leader can become aware quite suddenly and dramatically, as is the case with unwanted news, that there is a "cancer in the White House", or there is "malaise" in the nation, or that something is rotten in Denmark. Culture expresses itself in featured news stories about Texaco and gender discrimination, about Aberdeen and sexual harassment, about Tailhook, and other pernicious events. In those instances, the culture of particular organizations obscured any sense of otherwise ethical behavior.

Culture also is often expressed positively in non-verbal terms, by symbols, representations, colors, logos, songs and anthems. It is the nature of symbols to express what is often difficult to express verbally. The President of the United States is by virtue of his office a symbol. Images of the President standing at attention at Dover Air Force Base; or, signing a bill; or, delivering the State of the Union address, are rooted in our culture of respect for the office of the President.

The task of the strategic leader is to notice what is really happening in the organization beyond the wiring diagram, beneath the glossy reports, and behind what he hears. The same diligence that the leader might use in discerning and gathering information prior to establishing a vision for an organization might well serve in determining its culture.

POWER

We've mentioned previously that it is part of the nature of an organization to gather and consolidate power. It is through power, and its surrogate politics, that an organization accomplishes its purposes and fulfills its mandates whether it comes from legislation, or the policies of a board of directors, or from the inherent and critical nature of the organization. Such power not only defines the essential purposes of the organization, but also provides the means to achieve its objectives.

And it is precisely in its consolidation of power that an organization can dare to be great and can gain those goals that fulfill the aspirations of its members. Thus, a firm that makes automobiles and that seeks to be a world class manufacturer in that industrial segment will use its economic, technical, and artistic power to design, engineer, manufacture, and sell enough vehicles to gain a sizable market share.

The role of the strategic leader is to use the power inherent in the organization to leverage that power through alliances, both formal and informal, with the power in other organizations. The strategic leader also needs to be conscious of the corruption that sometimes lies with the exercise of power.

PEOPLE

Project Focus: Hope*

Recognizing the dignity and beauty of every person,

we pledge intelligent and practical action

to overcome racism, poverty and injustice.

And to build a metropolitan community where all people

may live in freedom, harmony, trust and affection.

Black and white, yellow, brown and red

from Detroit and its suburbs

of every economic status,

national origin and religious persuasion

we join in this covenant.

Ideally, organizations provide opportunities for individuals to reach the highest levels of achievement. Individuals join an organization to pursue a career, to earn a living, to engage in professional activity, and to associate with others who may have the same goals. An organization offers the fulfillment of dreams or aspirations.

If the fit between the individual and the organization is sound, the association between them might last a lifetime. People join a particular religion and never leave it; others become lifelong employees of a corporation. In those instances, the organization meets the needs of the individual, and the individual contributes to the good of the institution. Each gets a level of satisfaction that is sufficient for continued association.

Conversely, if the fit between the individual and the organization is unsound, the association might be temporary, and disappointing. A recruit may enter one of the military services, and find the discipline and rigor do not provide the satisfaction necessary for continued membership. A student may enter a college and find that the requirements and other aspects of academic life are not satisfying.

One of the phenomena associated with large organizations is a certain impersonality. Even after working "together" in the same place for years, some people realize that they don't really know a particular person. And the larger, more diverse and geographically dispersed an organization may be, the more complex is the communication about things critical and essential to the organization. The "front" office becomes impersonalized as "them", usually in a pejorative way. In turn, the front office sees its employees as lacking the attitudes and skills that are critical for continued success. Thus, an uneasy climate of suspicion and tamped-down hostility may begin to affect an organization. People begin to feel unimportant, uninvolved, even unloved.

One of the critical tasks of the strategic leader is to recognize and provide for the needs of the members of the organization. Many organizations, recognizing the value and importance of employees have begun to take significant actions to improve the conditions that would allow employees to satisfy their human needs, and thus contribute more substantially to the good of the organization. In other words, they have begun to examine the characteristics of human resources and provide a better fit between the individual and the organization.

Conditions where employees were largely regimented, perceived to be replaceable parts in a large enterprise, such as an assembly line, or working in a bureaucracy, or as a member of the armed forces, have changed to accommodate more of the human resource dimensions. Flexibility has replaced rigidity. Hours of work have been adjusted in some cases, and telecommuting, flex time and other accommodations have been introduced to keep pace with the larger environment. The work force itself reflects a diversity in gender, ethnicity race, age, interests, and skills. Jobs are rotated so that people do not become bored. Recognition of a commonality of interests is leading to more win-win solutions.

The radical idea of sharing power with more and more members of organizations seems to fall under the broad category of empowering. The proverbial suggestion box has given way to allowing workers to suggest changes without recourse to someone's approval. Based on the premise that people want to contribute and can do so in a meaningful way, the strategic leader will find the balance between the "inmates running the asylum" and responsible contributions; in the end, it may simply be an application of the maxim offered by management consultant, Tom Peters: "Involve everyone all the time" (Peters, 1987).

A strategic leader can enhance the culture of an organization through the approaches that he or she takes toward people; how they are recruited, trained, and brought into the organization; how they are rewarded and counseled while they are in the organization; the opportunity they have to contribute to the organization; the measure of independence and trust as part of self-managing teams; in short, the extent to which the culture of the organization provides for their recreational, social, and professional development.

CONCLUSION

The task of strategic leadership in VUCA environments is critical. Organizations--nations, large elements of government, multi-national corporations, and national associations carry within their cultures, values, vision, political aspects, and the lives of people. It is a complexity that corporate and other strategic leaders might recognize in this series of statements posed by McCaskey:

We are not sure what the problem is.

We are not sure what is really happening.

We are not sure what we want.

We do not have the resources that we need.

We are not sure who is supposed to do what.

We are not sure how to get what we want.

We are not sure how to determine if we have succeeded.

In spite of these uncertainties, strategic leaders still must be effective decision makers. Understanding more about subtle qualities in organizations-vision, values and ethics, culture, and power-about the relationship of people who are members of the organization, and about managing and leading during transitional periods-may make you a better leader, able to act with increased wisdom, purpose, and prudence.

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