Leadership - The California and Nevada Credit Union Leagues

Report
Strategy, Leadership and Culture
John Lass, SVP Strategy
California and Nevada Credit Union Leagues
2013 Annual Meeting & Convention
October 29, 2013
CUNA Mutual Group Proprietary
Reproduction, Adaptation or Distribution Prohibited
© CUNA Mutual Group
Sequence of Themes
• 2011: Sustainable Growth Model
• 2012: Strategic Inflection Point
• 2013: Battle for the American Consumer
2
Strategic Inflection Point
Business goes
on to newer
heights
Inflection Point
Business
declines
Source: Only the Paranoid Survive, Andrew S. Grove, 1996
3
The Battle for the American Consumer
Financial
Institutions
Non-Bank
Competitors
Retailers
Financial Services
Savings
Card
Companies
Lending
Platform
Players
Payments
Investments
Insurance
New
Entrants
Telecoms
Alternative
Payments
Source: BDU Analysis
4
Two Key Questions
Q: Are credit unions facing a strategic inflection point?
A: The evidence points to “Yes”:
– Proliferation of competitors and substitutes
– Channel shifts
– Regulatory burden
– Changing of the leadership guard
– And many other factors…
Q: How can we manage through the strategic inflection point?
5
Strategy, Leadership and Culture
Strategy
Leadership
Culture
Source: CUNA Mutual Group – BDU Analysis
6
Strategy
7
Definition of Strategy
“The determination of the long-run goals and
objectives of an enterprise and the adoption of
courses of action and the allocation of resource
necessary for carrying out these goals”
- Alfred Chandler, Strategy and Structure,1962
8
Amazon Business & Investing Titles by Keyword
Source: Amazon.com, 7/23/2013
9
Definition of Strategy
“Strategy is that which links an organization’s
objectives to its actions.”
- Bruce Henderson, Founder, Boston Consulting Group, 1968
10
High
BCG Growth Share Matrix
Low
Market
Growth
High
Low
Market Share
11
High
BCG Growth Share Matrix
Low
Market
Growth
High
Low
Market Share
12
High
BCG Growth Share Matrix
Low
Market
Growth
High
Low
Market Share
13
High
BCG Growth Share Matrix
Low
Market
Growth
High
Low
Market Share
14
High
BCG Growth Share Matrix
Market
Growth
Low
X
High
Low
Market Share
15
Michael Porter’s Definition of Strategy
“Competitive strategy is about being different. It
means deliberately choosing a different set of
activities to deliver a unique mix of value.”
- Michael Porter, “What is Strategy?”, Harvard Business Review, 1996
16
Strategy Options: What Customer Value to Lead in?
To compete, a business needs to
perform in all three disciplines.
To become a market leader, it must
outperform competitors in one
discipline.
Product Innovation
Leadership
We win because the market perceives
our brand as having the cutting-edge
(often overkill) products with superior
features – justifying premium prices.
Example: Apple Computer
Middle ground
of mediocracy:
Trying to lead
on all fronts
Customer Solutions
Leadership
Operational Efficiency
Leadership
We win because the market perceives
us as having the lowest prices. Based
on cost and process efficiencies that
still allow us to return profits.
We win because we are so customerintimate that we are already there
when the customer need arises. We
offer tailored solutions before the
customer feels like shopping around.
Example: IBM w/ enterprise
customers.
Example: Dell Computer
Source: The Discipline of Market Leaders, Michael Treacy & Fred Wiersma, 1995
17
Case Study: Specialty Coffee Retailers
Product
Innovation
Leadership
Customer
Centricity
Operational
Efficiency
Leadership
Source: BDU Analysis
18
Strategy Exercise
Product
Innovation
Leadership
Three Questions:
1.
Where is my credit union today?
2.
Where are each of my three top competitors?
3.
Where should my credit union be three years from today?
Customer
Centricity
Operational
Efficiency
Leadership
Source: BDU Analysis
19
The Role Of Strategy
Objectives
Strategy
Action Plan
20
The Role Of Strategy
Vision
Values
Mission
Objectives
Strategy
Action Plan
21
The Role Of Strategy
Vision
Values
Mission
Objectives
Strategy
Action Plan
Measurement
Controls
Iteration
22
Strategy: Discussion Questions
• Does our strategy respond to the realities of the strategic
inflection point?
• Do we have a financial / business model that can sustain
growth for the next decade?
• What will happen if we fail to respond?
• How urgent is the current situation?
23
Leadership
24
Teddy Roosevelt on Leadership
“The first duty of a leader
is to lead.”
- Theodore Roosevelt
Source: Theodore Roosevelt's History of the United States: His Own Words, Daniel Ruddy, 2010
25
Leadership Defined
"Leadership is the art of
influencing human
behavior through ability
to directly influence
people and direct them
toward a specific goal.“
- Gen Omar N. Bradley, Chief of
Staff, U.S. Army, 1948
Source: Command, Leadership, And Effective Staff Support,
The Information Management Support Center, Department of the Army, 1996
26
Key Leadership Attributes
• Integrity
• Self-awareness
• Adaptability and flexibility
• Intellectual versatility
• Interpersonal influence
• Objectivity
• Organizational savvy
• Self-confidence
• Tolerance of ambiguity
Source” “Foundations for Successful Leadership – Key Leadership Attributes”, University of
Michigan Health System
27
Myers Briggs Personality Types
The way you
take in
information
Where you focus
your attention
The way you
make decisions
How you deal
with the outside
world
E
S
T
J
Extroverted
Sensing
Thinking
Judging
I
N
F
P
Introverted
Intuitive
Feeling
Perceiving
28
Hagberg’s Three Pillars of Leadership
Visionary
Evangelist
•
•
•
•
•
Visionary thinking
Taking initiative
Agent of change
Inspirational role model
Strategic focus
Relationship
Builder
• Sensitivity and
consideration
• Relationship building
• Openness to input
• Social Astuteness
• Listening
Manager of
Execution
• Results and productivity
• Planning, prioritizing
and maintaining focus
• Re-engineering
processes
• Dependability
• Developing structures,
systems and processes
Source: Hagberg Consulting Group
29
Leadership Styles and Value Proposition
Product Innovation
Leadership
Customer
Centricity
Steve Jobs / Apple
Visionary Evangelist
Operational Efficiency
Leadership
Middle ground
of mediocrity:
Trying to lead
on all fronts
Sam Palmisano / IBM
Relationship Builder
Michael Dell / Dell Inc.
Manager of Execution
30
Leadership Key Points
• Many different styles of leadership
• In many cases different leadership styles correlate to
different personality traits (Myers Briggs)
– Leaders tend not to change from one style to another
– Leaders cannot master all styles
• Leader must fit the value proposition
• Build upon a leader’s strengths and work around
weaknesses
• Surround leaders with teams that augment them
31
Leadership: Discussion Questions
• Who has a vision of what life looks like beyond the
strategic inflection point?
• What leadership skills and competencies are most critical
at this stage of my credit union’s development?
• What needs to be done to cultivate the next generation of
credit union leaders?
32
Culture
33
Culture Defined
“Culture refers to the taken-for-granted values,
underlying assumptions, expectations and
definitions that characterize organizations and
their members… It serves as the social glue
binding an organization together.”
-
Diagnosing and Changing Organizational Culture, Cameron & Quinn, 2011
34
Another Definition of Culture
“The force that determines how people behave
when no one is looking.”
- Building a Winning Culture, Bain and Company, 2006
35
Elements of Organizational Culture
Observable
Explicit
Behaviors
Artifacts
Conscious Contracts and
Norms
Implicit Assumptions
Unobservable
Source: Diagnosing and Changing Organizational Culture, Kim S. Cameron and
Robert E. Quinn, 2011
36
Importance of Culture
“A strong culture has almost always been the
driving force behind the continuing success in
American business.”
- Corporate cultures: the rites and rituals of corporate life, Terrence Deal and Allan Kennedy, 1982
37
Winning Cultures Combine Two Key Elements
High
aspirations
and a desire
to win
High Performance Values &
Behaviors:
Passion and
energy
External
focus
Significant similarities exist across highperforming companies
Who we are /
what we value
Unique Personality and Soul:
Every high-performing company is
unique
Think like
owners
Individuals
who team
Bias to
action
Source: “Building a winning culture”, Bain & Co., 2006
38
Bain Survey of Business Leaders
68%
Believe culture provides the greatest source of competitive
advantage
Source: “Building a winning culture”, Bain & Co., 2006
39
Bain Survey of Business Leaders
68%
Believe culture provides the greatest source of competitive
advantage
76%
Believe it’s changeable
Source: “Building a winning culture”, Bain & Co., 2006
40
Bain Survey of Business Leaders
68%
Believe culture provides the greatest source of competitive
advantage
76%
Believe it’s changeable
65%
Believe they need to change it
Source: “Building a winning culture”, Bain & Co., 2006
41
Bain Survey of Business Leaders
68%
Believe culture provides the greatest source of competitive
advantage
76%
Believe it’s changeable
65%
Believe they need to change it
81%
Believe an organization lacking a high-performance culture
is doomed to mediocrity
Source: “Building a winning culture”, Bain & Co., 2006
42
Bain Survey of Business Leaders
68%
Believe culture provides the greatest source of competitive
advantage
76%
Believe it’s changeable
65%
Believe they need to change it
81%
Believe an organization lacking a high-performance culture
is doomed to mediocrity
10%
Succeed in building a high-performance culture
Source: “Building a winning culture”, Bain & Co., 2006
43
Why Culture is so Difficult to Change
“Culture is so stable and difficult
to change because it represents
the accumulated learning of a
group – the ways of thinking,
feeling and perceiving the world
that have made the group
successful.”
-
The Corporate Culture Survival Guide,
Edgar Schein, 2009
Source: “Building a winning culture”, Bain & Co., 2006
44
Successful Cultural Change
• Determine what type of culture the business needs
• Identify specific attributes that make up the ideal culture
• Manage the factors that shape and influence culture
45
Culture Key Points
• Most difficult of the three to identify and define
– Impact is real if not more real than strategy and leadership
• Once established culture can be difficult to change
• Some believe that culture cannot be changed directly
– Change individual and group behavior over time and the culture will
change
– Employment practices have a big impact on culture
• Buy-in from senior leadership is critical to any culture
change effort
46
Lou Gerstner’s Perspective
“Culture isn’t just one aspect of the game.
It is the game.”
- Lou Gerstner, Former Chairman, IBM
47
Culture: Discussion Questions
• Do we have a realistic assessment of the cultural
strengths and weaknesses of our credit union?
• Does our organizational culture need to change?
• What are the most important culture attributes to support
our long-term success and relevance?
• Will the required culture change cause us to look more
like our competition?
48
Alignment of Strategy,
Leadership and Culture
49
The Convergence of Strategy and Leadership
• Strategy and leadership are always inextricably bound up
with each other
– A strong leader is involved at every stage of strategy:
• Initial conception
• Development
• Full articulation and communication
• Final execution
• At certain times the linkage between strategy and
leadership is critical:
– At the national level: In times of war and economic crisis
– At the corporate level: At strategic inflection points
50
Winston Churchill on Execution
“Any clever person can make
plans for winning a war if he
has no responsibility for
carrying them out.”
Source: The Wit and Wisdom of Winston Churchill: A Treasury of More than 1000
Quotations, James C. Humes, 2009
51
Link between Strategy and Culture
Primary Value Proposition
Supportive Culture Elements
Product Innovation
• Nimbleness
• Committed to
Excellence
Operational Efficiency
Customized Solutions
• Systems and
Procedures
• Customer Driven
• Committed to
Excellence
• Learning
• Committed to
Excellence
• Acceptance of Change
• Time Horizon
• Nimbleness
• Creativity and
Innovation
• External Focus
• Support Employee
Growth
• Risk Taking
• Learning
• Nimbleness
• Learning
• Creativity and
Innovation
• Acceptance of Change
Source: Hagberg Consulting Group
52
Dilbert on Execution
Source: Dilbert by Scott Adams
53
Aligning Strategy with Leadership and Culture
Source: Hagberg Consulting Group
54
Culture: Ignore It At Your Peril
“In general, culture is stronger than the
new leader and either limits or ignores new
leaders who do not fit into the culture.”
- Edgar Schein
“Culture eats strategy for breakfast.”
- Peter Drucker
Source: “Dr. Edgar Schein on Culture, Leadership and Performance”, Doctor Duncan Blog, 10/16/2012
55
Alignment Process: Case Study
Strategy Drives Culture, Leadership and Structure:
One Size Does Not Fit All: Design, Assess, Act and Re-Examine
Vision, Mission, Values
Strategy: Customer Intimacy, Operational Excellence, Product Leadership, Disruptive Innovation
Culture:
What are the culture characteristics
required to support the strategy?
Leadership:
What are the leadership
competencies required
to support the strategy?
Structure:
What is the organization structure
required to support the strategy?
Required Culture Exercise
Identify leadership competencies
Design/determine optimal structure
Culture Assessment
360° Feedback/personality profile
Assess current structure
Identify gaps between required and
actual culture.
Target change efforts.
Development Plan and Coaching
Identify areas to restructure.
Modify structure.
Source: John Stieber Consulting
56
Alignment: Discussion Questions
• Do we need to modify our strategy to survive and thrive?
• Is our culture capable of supporting a strategic shift?
• Do our leaders possess the vision and skills required to
lead us through the strategic inflection point?
57
Winston Churchill on Responsibility
“Someone has to take
responsibility.
I will.”
Source: Churchill on Leadership. Steven F. Hayward, 2010
58
The Final Word
Someone has to take responsibility.
We will.
59
Important Disclaimer
CUNA Mutual’s analysis is based upon certain publicly available
information and data, including NCUA 5300 Reports, and is subject to
risks, uncertainties and other factors which could cause actual results
or performance to differ from the future results or performance
expressed or implied in this analysis. We disclaim any representation
or warranty, express or implied, as to the accuracy or completeness of
our analysis, as well as any obligation to update our analysis. Each
recipient should conduct its own independent analysis of relevant
information and data, and should base any business decisions upon
such independent analysis.
www.sustainablegrowthblog.blogspot.com
60

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