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Strategic Leadership Failure Scenario

Introduction

Strategic leadership can be considered a type of skill set that allows managers of any level to guide their organization while acknowledging both long- and short-term goals. It is also a practice in which people in executive positions continuously develop a vision that ensures the firm’s superiority over competitors. Strategic leaders usually possess specific personal qualities such as inquisitiveness and the ability to assume responsibility. However, action (and non-action) is what often defines the success and failure of strategic leadership. In the scenario described in this analysis, the leader possessed some qualities of a strategic leader. Still, he did not take action on time to prevent the failure of a business. This case suggests that strategic leadership is not defined only by competencies but also by the ability to withstand pressure and overcome a potentially harmful corporate culture.

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Scenario

I was not involved in the situation described below directly, as I worked in a medium-size in non-senior role enterprise for a small period. Nevertheless, during my employment, the company went through a haste acquisition of a smaller firm that would allow the larger business to expand the number of physical locations to sell products. It is vital to note that I became aware of the situations’ outcomes through some of my colleagues’ and senior executives’ discussions, and most of the details about the financial consequences or specific problems are unavailable to me.

During the acquisition planning process, a new senior manager joined the team. While other senior managers appeared to view the takeover in a positive light, the new team member was hesitant to call the idea prosperous for the company. Nevertheless, as he later shared, he remained silent so as not to disturb the established culture or cause conflicts. It is possible that the position of a new addition to the team put additional pressure on him to become a part of the organization.

In the next several months, the acquisition plan was finalized and enacted. It became clear that the goals of the acquired business and the corporation did not align and that the management team did not find a path to unite the companies’ cultures. For example, the two firms’ client bases differed greatly – while our business targeted high-income older customers, the smaller company saw itself as a part of a market for young people. In the end, an outside consultant was brought in to evaluate the outcome, and the new senior management confessed that he was hesitant to challenge the overall approval of the management team.

Analysis

In the case outlined above, the unsuccessful acquisition represents the failure of the senior management team’s plan. While it might have depended on various issues, one of them was the new senior manager’s inability to voice his concerns about the chosen strategy. According to Samimi et al. (2020), the management team’s relationship greatly influences the organization’s success. If the culture inside this level of leadership is not based on transparency, trust, and united aim, the team members are not encouraged to share their opinions. Instead, they may withhold information, leading to the plans being underprepared. The idea of a shared leadership perspective outlined by Norzailan et al. (2016) is founded on the belief that one person does not possess the necessary skills to manage all aspects of a business. Samimi et al. (2020) support this ideology, stating that delegation of responsibilities and open conversations about potential issues is vital for strategic leadership. However, if a corporation does not praise one’s ability to point out mistakes or failures, a toxic culture is developed.

Therefore, the culture in the organization contributed to the manager’s fear of sharing his insight. On the other hand, one may suggest that the new senior manager also did not act as a strategic leader by not following the principles of this approach. According to Carucci (2017), strategic leaders must be honest about the information they possess. They also should encourage innovation in creating the plan, developing paths for success, and minimizing the effects of failure. By withdrawing himself from the discussion, the new manager did not act as a leader – he did not present the information he had to the team and did not insist on considering some strategies to prevent or mitigate adverse outcomes. His new role in the company could make him unsure of his skills as a leader. Nevertheless, as Carucci (2017) finds, new hires of the executive level fail because they do not use their power to lead the company forward.

Recommendations

One can argue that the failure to discuss the acquisition in the described case openly is a consequence of both the senior manager’s lack of active participation in the discussion and the organization’s formed culture. Therefore, the recommendations for changing this situation should consider both the company’s senior-level management culture and the team members’ individual qualities. First of all, the new manager should have voiced his concerns about the acquisition as soon as possible. Although the takeover had started its planning phase before the manager was hired, he could still influence the process, pause it until necessary revisions were made, or stop it from happening. Here, he would be following the strategic phases – learning from past mistakes, thinking about what was wrong with the plan, and acting with courage to outline his thoughts to the senior management. Then, the corporation could proceed with the same three steps to improve or cancel its acquisition plans.

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The second recommendation concerns the organizational culture of the business. Although it would be challenging for the new manager to change the culture immediately, he should have pointed out the implicit pressure put on him to support the strategy, even though the latter was not thoroughly reviewed and scrutinized for risks. He could discuss the culture with separate members to see whether they supported the plan and propose a system for finding mistakes and discussing potential dangers.

Lastly, it is recommended that the company takes action to review its senior management culture to implement long-term change and influence its members to embrace transparent conversations about mistakes. Carucci (2017) notes that the work of executives is taxing as it requires great courage and stress resilience to make essential decisions and oversee performance improvement projects. As a result, many executives are hesitant to implement changes or make choices that shift priorities inside the organization. The business in the scenario could take time to deprioritize business reorganization (such as acquisition) before its management resolves the issue of aligning the goals of the current leadership team.

Contingencies and Limitations

The analysis of the discussed scenario has some limitations that are related to my position at the company and the available knowledge. First, the acquisition was not finalized, which means that one cannot be sure about whether the situation would resolve itself with time. Moreover, the fears and concerns of the new senior manager were voiced in private conversations and discussions with other colleagues, which means that the picture of the failed takeover is potentially incomplete. Other problems outside of the management team’s capabilities could influence the acquisition and discussions about it.

It is also unclear whether the new manager’s input could have persuaded the management team to review its strategy and change it. The recommendations for changing the corporate culture are based on the idea that senior managers will welcome the change and embrace the new culture as the ideas of strategic leadership propose. However, as Alvesson and Einola (2019) note, giving feedback to peers, especially when it is negative, is extremely difficult. It is challenging to predict whether any comment about corporate culture would result in positive change.

Conclusion

Overall, the scenario described in this analysis shows that strategic leadership does not always rely solely on the skills and qualities that a leader possesses. Leaders’ choices, failure to act, and their environment matter as well. When a new leader joined the existing team of senior managers, it was difficult for him to voice a negative opinion about a majority-supported acquisition. As he decided not to participate, he failed to act as a strategic leader by withholding information and not encouraging a review of risks. In contrast, the team also did not align with strategic leadership principles and exhibited an unhealthy corporate culture. The recommendations include taking steps to change the culture and voice negative opinions to encourage long-term improvement.

References

Alvesson, M., & Einola, K. (2019). Warning for excessive positivity: Authentic leadership and other traps in leadership studies. The Leadership Quarterly, 30(4), 383-395.

Carucci, R. (2017). Executives fail to execute strategy because they’re too internally focused. Harvard Business Review.

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Norzailan, Z., Othman, R. B., & Ishizaki, H. (2016). Strategic leadership competencies: What is it and how to develop it? Industrial and Commercial Training, 48(8), 394-399.

Samimi, M., Cortes, A. F., Anderson, M. H., & Herrmann, P. (2020). What is strategic leadership? Developing a framework for future research. The Leadership Quarterly, 101353.

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