The new psychology of strategic leadership

THE NEW

PSYCHOLOGY

OF

STRATEGIC LEADERSHIP

by Giovanni Gavetti distant opportunity

Bargaining Power of Suppliers

Threat of New Entrants

STRATEGIC

Industry Rivalry

Threat of Substitutes

Bargaining Power of Buyers

5 FORCE ANALYSIS Michael E Porter

mountaintops diagram

unoccupied position

distant opportunity

occupied position occupied position

occupied position occupied position

HIGH COMPETITIVE

occupied position

occupied position

occupied positio

distant opportunity

LOW COMPETITIVE unoccupied position

occupied position

d position

FINANCIAL SUPERMARKET distant opportunity

Bargaining Power of Suppliers

Threat Industry of New Entrants Rivalry

Bargaining Power of Buyers

Threat of Substitutes

distant opportunity

Spot

opportunity

for

Act on

users

opportunity

Legitimize

opportunity

Internal

$

for

External

users external

WHAT& Spot

opportunity

HOW distant opportunity

They think

close opportunity

Our Business

close opportunity

close opportunity

close opportunity

distant opportunity

CASE STUDY

rural

suburban Walmart Walmart

Big Effect

cost structure

Operational organization

Japanese manufacturers HONDA YAMAHA SUZUKI KAWASAKI

Vehicle technical innovation lower cost

Motercycle Industry

as “Entertainment”

Harley-Davidsons

&Ducati

“Ducati is not, or not only, a motorcycle company.

We sell something more: a dream,

Federico Minoli

CEO and chairman’s Ducati

passion, a piece of history ”

distant opportunity

unoccupied position

occupied positions

LOW-COST

Major US Airline “EVERYONE CAN FLY”

Herb Kelleher

Southwest Airlines

distant opportunity Herb Kelleher of Southwest Airlines

opportunities

opportunities

opportunities

opportunities opportunities opportunities opportunities

“Superior close opportunities always available But have not been spotted�

FINANCIAL SUPERMARKET

$

$

$ ABC

Charlie Merrill’s

ABC

ABC

ABC

m Super

t

a r ke

“if it is good business for a grocery chain to

offer the purchaser of vegetables a choice of meats”

commercial hedger

$

$

$

TYPE A

$

$

$

TYPE B

$

$

$

TYPE C

$

$

$

TYPE D

“Offer a commercial hedger a chance to invest

in a new issue or to open a stock account�

Banking Service

$

Merrill Lynch

?

Act on

opportunity

for

Internal users

DIGITAL CAMERA

distant opportunities

George Fisher

film camera digital camera

KODAK

“If a leader tries to march toward strange destinations,

the organization is likely to

deflect the effort.�

KODAK

CFO

CEO

Employees CMO

Manager Owners

Government

creditors

suppliers

stakeholders

Customer

Society

“Legitimize it in

the eyes of external stakeholders�

Larry Page & Sergey Brin

1998 David Filo & Jerry Yang

YAHOO

1995

Search engine 1994 Web Portal

Bob Davis

LYCOS

Google Google Search

I’m Feeling Lucky

Spot

opportunity

Act on

opportunity

Legitimize

opportunity

THE POWER OF

ASSOCIATIVE THINKING

“our brains automatically search for

and retrieve from long-term or

types of experiences”

memory past experiences

ATTITUDES

EMOTIONAL STATES

BIASES

Logical

Thinking

E= MC

2

B

S=vt

A+B+C = 0

A

PROFIT = TR-TC MC = MR

E

B

A

C

D

Associative Thinking

distant opportunity

metaphors

analogies

=

Deep experiences 10 years

Mistake

e k a t s Mi

Emotional factors

3 years

1years

A+

B+

PR

OF

“The difficult quest for

IT =

distant opportunities

0

A

B

E

MC 2

S=

vt

TR

-TC MC

B requires

good economists good psychologists.�

A

strategic leaders who are and

C=

E=

=M

R

D

THANK YOU