Organizations and companies mostly all operate in an environment that is influenced by economic conditions, customer demographics, values of society, lifestyles of the customers, regulations, and technology. Leaders must know about the macroenvironmental conditions in which organizations compete in order to more effectively lead to success. Leaders should be thinking strategically about seven components of the competitive environment: (1) Demographics, (2) Social Forces, (3) Political, legal, and regulatory forces, (4) Natural environment, (5) Technological factors, (6) Global forces, and (7) General economic conditions.
The job of a leader is to motivate the followers to work toward an agreed upon goal. However, before the leader can even begin the motivation process, an effective evaluation of the external environment needs to take place. The organization’s leader must decide whether the industry offers attractive opportunities for growth by evaluating the industry landscape, market size, and growth rates.
Secondly, the leader must determine what kinds of competitive forces the members of the industry are facing. An evaluation of competitive forces is required to determine the strength of competition in the industry.
Thirdly, the leader should determine what factors are driving industry changes and what impacts will those factors have. Some of the most common drivers of change are increased globalization and regulatory influences.
The fourth question leaders must evaluate concerns how the industry rivals are positioned. Strategic Group Mapping is a technique that can assist the leader in determining the position of rivals. In addition, the ability of the leader to predict the strategic moves of the competitors is important and is the fifth question to be considered. Effective leaders have the skill of foresight that allows them to evaluate what may happen in the future based on lessons of the past.
Next, the effective leader works to identify the key factors for future competitive success by determining approaches and resources that will give the greatest impact on competitive success. Finally, successful leaders determine the degree to which an industry offers prospects for profits.
Leadership is a complex role that requires skills that place organizations, families, groups, etc. in a position of success. The process of becoming a great leader is never ending. Continued education and professional development will allow leaders to be up to date with knowledge that will help organizations achieve goals and experience success. In order to improve your leadership skills, consider the tips that follow:
· Read, read, read
· Attend seminars on leadership and business strategy
· Listen to other successful leaders
· Never stop learning
Baggerly-Hinojosa (2010). Are You a 10? USA: Lulu Publishers.Thompson, Gamble, & Strickland (2009). Crafting and Executing Strategy. McGraw Hill.