Book: Exploring Strategy Eleventh Edition

Chapter 13 STRATEGY DEVELOPMENT PROCESSES

414

The influence of strategic leaders

Illustration 13.1

Founders and chief executives may have a profound effect on an organisation's strategy.

On governance and purpose

On the very first day as Unilever CEO Paul Polman

put the shareholders on notice and abandoned quarterly

reports along with earnings guidance for the

stock market:

'. . . in order to solve issues like food security or

climate change, you need to have longer-term solutions.

You cannot do that on a quarterly basis . . . I

need to create the environment for the company to

make the right longer-term decisions. So we stopped

giving guidance. We stopped doing quarterly reporting.

We changed the compensation for the long term

. . . I felt we had to do it this to be a long-term viable

concern. I don't call it courage. I just call it

leadership, which is doing these harder right things

versus the easier wrong. It's easy to make a lot of

these [short term] decisions, but they are ultimately

wrong for the long term . . . I also made it very clear

that certain shareholders were not welcome in this

company. That created quite some noise.'

On building new businesses

Elon Musk, founder and CEO of electric vehicle manufacturer

Tesla Motors and entrepreneur behind PayPal

and SpaceX, has provided many innovative ideas, but

also led them to execution:

'A company is a group of people that are organized

to creating a product or service. That's what a company

is. So in order to create such a thing, you have

to convince others to join you in your effort and so

they have to be convinced that it's a sensible thing,

that basically there's some reasonable chance of

success and if there is success, the reward will be

commensurate with the effort involved. And so I

think that's it . . . getting people to believe in what

you're doing - and in you - is important.'

On changing strategy

NHS England's Chief Executive Simon Stevens

announced the need for change as he presented the

NHS Five Year Forward View for healthcare in England:

'But the NHS is now at a crossroads - as a country

we need to decide which way to go. The Forward

View represents the shared view of the national

leadership of the NHS, setting out the choices -

and consequences - that we will face over the next

five years.

It is perfectly possible to improve and sustain

the NHS over the next five years in a way that the

public and patients want. But to secure the future

that we know is possible, the NHS needs to change

substantially, and we need the support of future governments

and other partners to do so.'

On envisioning the future

Quotes from one of history's most famous fast food

retailing leaders reveal what Ray Kroc was thinking as

he built McDonald's:

'That night (in 1954) in my motel room I did a lot of

heavy thinking about what I'd seen during the day.

Visions of McDonald's restaurants dotting crossroads

all over the country paraded through my brain.

The McDonald brothers were simply not on my

wavelength at all. I was obsessed with the idea

of making McDonald's the biggest and the best.

They were content with what they had; they didn't

want to be bothered with more risks and more

demands.'

Sources: (1) Andy Boynton and Margareta Barchan, Forbes, 20 July

2015; (2) Alison van Diggelen, Fresh Dialogues , 25 January 2013; (3)

NHS England, 'NHS Leaders set out vision for healthcare in England',

2014, https://www.england.nhs.uk/2014/10/23/nhs-leaders-vision/ ; (4)

Barbara Farfan, About.com Guide, 8 May 2012.

Questions

1 Can you provide other examples of founders'

or chief executives' influence on strategy?

2 What else would you emphasize as an

important contribution CEO's make to strategy

development?