## Strategic Leadership
A strategic leader is a change agent who plays multiple roles: visionary, chief entrepreneur, strategist, chief administrator, culture builder, resource acquirer/allocator, and capabilities builder.
### Responsibilities of a Strategic Leader
1. Making strategic decisions.
2. Formulating policies and action plans.
3. Ensuring effective communication.
4. Managing human capital (most critical).
5. Managing change.
6. Creating and sustaining a strong corporate culture.
7. Sustaining high performance over time.
> Unlike strategic leadership, managerial leadership is concerned with the short-term, day-to-day activities.
### Five Managerial Roles in Pushing Good Strategy Execution
1. Monitor progress: Stay on top of what is happening; solve issues; identify obstacles.
2. Build esprit de corps: Mobilise and energise organisational members to execute strategy competently.
3. Maintain responsiveness: Keep the organisation alert for new opportunities, ahead of rivals in developing competencies.
4. Exercise ethical leadership: Insist on model corporate citizenship.
5. Push corrective actions: Improve strategy execution and overall strategic performance.
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### A. Transformational Leadership
- Uses charisma and enthusiasm to inspire people to exert themselves for the organisation's good.
- Offers: excitement, vision, intellectual stimulation, and personal satisfaction.
- Gives followers a 'dream' or 'vision'; motivates them to do more than originally expected by stretching abilities and increasing self-confidence.
Appropriate in:
- Turbulent environments
- Industries at the very start or end of their life-cycles
- Poorly performing organisations needing major change
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### B. Transactional Leadership
- Focuses on designing systems and controlling activities; builds on existing culture.
- Uses the authority of office to exchange rewards (pay, status) for performance.
- Sets clear goals with explicit rewards or penalties for achievement or non-achievement.
- Prefers a formalised approach to motivation.
Appropriate in:
- Static environments
- Mature industries
- Well-performing organisations
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### Comparison Table
| Dimension | Transformational | Transactional |
|---|---|---|
| Core focus | Inspiration, vision, change | Systems, control, exchange |
| Environment fit | Turbulent, start/end of lifecycle | Static, mature |
| Organisation fit | Poorly performing, needing major change | Stable, performing well |
| Motivation method | Charisma, intellectual stimulation | Rewards and penalties |
| Culture stance | Challenges and transforms existing culture | Builds on and enhances existing culture |