The Crimson Press Curriculum Center

First Page and the Assignment Questions:
The man of system . . . seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chessboard; . . . but, in the great chessboard of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it.

—Adam Smith

When Gil Amelio became CEO of National Semiconductor, the organization was near bankruptcy. Under his leadership, it returned to successful operations. As CEO of The Toro Company (a manufacturer of lawn mowers and playground equipment), Ken Melrose led a similarly successful turnaround. As did Mark Clement, CEO of Holy Cross Hospital in Chicago, who in less than a year led a transformation from 14 to 94 percentile points in a national ranking of healthcare facilities. Frances Hesselbein demonstrated similar results when she led the Girl Scouts of America from a moribund, financially desperate nonprofit organization to a thriving and vital entity that Peter Drucker once called “the best managed organization in the United States.”

How did they do it? In part, they focused on the traditional organizational functions of operations, marketing, accounting, finance, human resources, and information systems. More importantly, though, they used a combination of seven leadership levers that cut across these traditional functions and help to integrate them. These seven levers are shown in Exhibit 1, and discussed briefly below.2

Strategy Formulation At the center of the leadership framework is the strategy formulation process. This process, which can be quite rigorous and systematic or, alternatively, operate very informally and intuitively, is how senior management examines the organization’s environment, assesses the kinds of signals it is sending, compares this information with the organization’s strengths and weaknesses, incorporates the organization’s cultural values and senior management’s own personal values into the analysis, and decides on a strategic direction.

This strategy formulation process, sometimes called a SWOT analysis (for strengths, weaknesses, opportunities and threats), is complex. One of its most difficult aspects is assessing the nature of the environmental signals. How, for example, does senior management learn what efforts the environment is calling for? How does it gain a full understanding of customer needs, ascertain the kinds of resources that are available to support its efforts, and determine what competitors and potential competitors are doing? And how does it do all of this in the midst of complex and rapidly changes? Indeed, while the environment (i.e., the entire range of social, cultural, political, and economic forces within which the organization operates) can be a source of opportunity, it also can pose threats to the organization’s survival. Or, it can simply exert constraining influences.