Characteristics that make a leader effective during renewal phase

A realistic and hands on approach: A Leader has to be aware of the inner workings of the business and also know about the people that make the business happen. Strategies will not work if the leader does not know how they would be executed in the organization. Meeting people in various teams and levels would give a good understanding of the organization's business space and connect the Leader to the day to day realities of their business. Leaders also need to suggest any changes required in the form of feedback to their employees.

Leader who can set clear goals and priorities for an organization: Setting clear goals and priorities for an organization and its employees will lead to a common understanding between the leaders and its workforce. When decision making is decentralized and highly fragmented, setting clear goals and priorities is even more essential.

Self Awareness, Humility and Authenticity are some essential characteristics in a Leader. One should be aware of him or herself in an execution culture (Ram Charan, 2002).

Know your business, competition and market place. A leader should have thorough understanding of his organization's strengths and weakness and at the same time have the courage to realistically address the challenges faced by the organization. Understanding competition and market place is also essential to an organization's survival and growth. In the global market, a leader should have a global view and understand its competitors and the market from an international level. For example a leader needs to understand the implication of political unrest in another continent in which their biggest supplier is located.
Ideas from the renewal stage to help you in your professional life.

Knowing the organization's business environment and external factors affecting the organization is highly beneficial. It would greatly help a professional in knowing the leadership’s strategic direction for the company. Professionally one should constantly evaluate one’s strengths and weakness and set clear goals and priorities to people one is leading. At the same time clearly articulate goals to the upper management. Being Self Aware, having the Humility and Authenticity will help in one’s career.

References :
http://www.ps3focus.com/archives/167

http://www.intuitive.com/blog/some_tips_for_new_sony_ceo_howard_stringer.html

https://www.dunkindonuts.com/aboutus/press/PressRelease.aspx?viewtype=current&id=100012

Renewal Efforts

Now if you look at IBM they have been heavily focused on cutting edge and innovative technologies and created artificial growth in the organization by acquiring several successful companies which complements their product stack in next generation technologies. Companies like Datapower which is the market leader in XML and security appliances, Filenet which is also a big player in Workflow and BPM, Cognos is a market leader in Business Intelligence, Softek which offers storage solutions. There are several products like these that are acquired by IBM. At the same time, IBM is also investing on training its own employees and is making significant changes in leadership style by making it more approachable and open to new ideas. Most of the people would identify IBM with Mainframes but on a closer look Mainframe is very small portion of its revenue and its product space comprises of products for open systems - software that works on Unix, Linux, Solaris, Windows and other distributed systems.

Another case in point - Sony has been a market leader in consumer electronics.
In May 1960 Sony electronics was the first company to create the world's first direct-view portable television.

From Sony PlayStation to the Walkman, Sony consumer electronics has been at the forefront of consumer electronics. During the recent years Sony Electronics has been losing its market capital in consumer electronics. Sony is set to lose over US $1 billion on the PlayStation 3 in the year following its launch. Sony has launched PS3 with a US $399 price tag - around US $100 less than it costs to manufacture. It is also late in entering the flat screen LCD market too. These are all because of internal and external factors. Higher manufacturing cost is attributed to internal challenges faced by Sony and at the same time other manufacturers like Toshiba have taken a significant market share from Sony.
As a part of their renewal efforts in 2005 CEO Nobuyuki Idei, has stepped down amidst growing pressure from the stakeholders to show profitability and the former Head of Sony Corporation of America, Howard Stringer has been promoted to the position of Chairman and Chief Executive Officer.
Similar renewal strategies have been adopted by Dunkin Donuts. Allied Domecq Quick Service Restaurants (ADQSR), which includes quick service
restaurant brands Dunkin' Donuts, Baskin-Robbins, and Togo's Sandwiches, has named Jon L. Luther as the new CEO. Luther and his leadership team, including three women, whose dedicated roles will build on the company's business strategy, ensure operational excellence and develop innovative menus and concepts that support ADQSR's brands, employees and franchisees. In 2007 to increase market capitalization and revenues, Dunkin Donuts has started a new market campaign "America Runs on Dunkin", this has already got some positive results.
As quoted in April edition of Wall Street Journal
" Armed with fresh capital from 2006 December's $2.43 billion private-equity buyout of Dunkin' Brands Inc., Dunkin' plans to remake its nearly 5,000 U.S.
stores over the next three years, and have triple that number in less than 15 years. Dunkin' plans to unveil the first part of the new strategy in April ‘08 with an
advertising campaign aimed at re-branding the chain as a quick but appealing alternative to specialty coffee shops and fast-food chains "

Organizations in renewal stage

Some organizations in renewal stage are

IBM

Sony

Dunkin Donuts

Several renewal strategies are underway in the above organizations to make them more profitable or increase their market capitalization. In IBM, the reason for renewal is partly due to internal influence and also due to external market competition. Internal forces being cyloed organization structure and archaic information management system that has made IBM less adaptable to change while its legacy technology products has simultaneously made it less competitive

Distinctive about renewal stage of an organization

Some of the distinct characteristics of renewal stage are

• Renewal begins after the mature stage, preventing serious decline to rejuvenate the organization.
• Existing products and service need to run side by side with the new products both compete for scarce resource. Old product, which is a cash cow and new product which is promise of future need to co exist and a delicate balance should be maintained between the old and the new. Old products need to be maintained and supported while developing the new products.

One could ask a question that what happens to an organization after mature stage that an organization needs to go through renewal stage. It is because of Organization's inability to sustain its growth in mature stage, which can be attribute to internal and external factors.

Innovation of new and products and services that obsoletes the existing market players, major economic disaster, ecologic disaster or New competition with deep pockets are some of the external forces which are inhibitors to organization growth.

Departure of key talent or organizational breakdown, obsolete information system, decline in major source of revenue or supplier, outdated equipment are some of the internal forces that prevents the organizational ability to sustain its growth.

Can Organization's be in Mature stage all the time ? In my opinion, they can provided they constantly fine tune all aspects of their organization constantly and be ahead of the curve. For eg for many years GE has been in growth stage and now it is still considered to be one the market leader in several consumer good sector.