Ep. 16: Dr. Mark Frigo - Leadership Driven Strategy

Dr. Mark Frigo, CMA, CPA, joins Count Me In to talk about what it means to develop a leadership driven strategy. Leadership is the central focal point of IMA's Management Accounting Competency Framework and directly supports strategy, planning, and performance, and overall business acumen. Dr. Frigo references various works he has authored and explains how individual leaders and teams can contribute to strategy. Dr. Frigo is the Director of the Center for Strategy, Execution and Valuation and Strategic Risk Management Lab and is the Ezerski Endowed Chair of Strategy & Leadership of the Kellstadt Graduate School of Business in the Driehaus College of Business at Depaul University. Take a listen to develop your own leadership driven strategy!

"Creating Great Long-term Sustainable Value" by Dr. Mark Frigo: https://sfmagazine.com/post-entry/october-2018-creating-greater-long-term-sustainable-value/

Contact Dr. Mark Frigo:
Email: mfrigo@depaul.edu
LinkedIn: https://www.linkedin.com/in/markfrigo/
Twitter: @drmarkfrigo

FULL EPISODE TRANSCRIPT

Music: (00:00)

Adam Larson: (00:05) Hey everyone. Thanks for coming back to IMA and joining the conversation for Count Me In. I'm your host, Adam Larson and once again I'm joined by my co host Mitch Roshong. Our episode for today is at the center of all skills needed to be a successful accounting and finance professional. As we listened to our conversation with Dr. Mark Frigo on the topic of strategic leadership. Mitch you spoke with Dr. Frigo, how did it go?

Mitch Roshong: (00:28) Dr. Frigo is an excellent speaker and it was a pleasure talking with him. Dr. Frigo is the director of the center for strategy, execution and valuation and the strategic risk management lab and is the Ezerski Endowed Chair of Strategy & Leadership in the Driehaus College of Business at DePaul University in Chicago. We had a great time talking about the importance of leadership and how it needs to be a part of all business strategies. Without further ado, let's turn to the conversation we had.

Music: (00:56)

Mitch Roshong: (01:02) So my first question for you is what is a leadership Driven strategy?

Dr. Frigo: (01:09) So leadership driven strategy is applying great business strategy that we've learned in studying high performing companies to the individual leader and also to teams within organizations. The idea is to identify what are the patterns of strategic leadership activities and team activities that create the most value for their team or their organization.

Mitch Roshong: (01:42) So my understanding of this, as you just said it can be focused on individuals, and onto teams in general. So kind of what's the difference, I guess? How can we apply great business strategy at the different levels?

Dr. Frigo: (01:56) So let me describe how this, process evolved. The return driven strategy, which is, discussed in the book driven, that I authored a few years ago, describes the pattern of strategic activities of long-term high-performance companies and those seminars and other works that we've done in presenting that framework to management teams, naturally, to internalize the way of thinking, they started thinking that CFO teams and the executive teams and management teams that we worked with started thinking about that pattern within their own, at the micro level, at the individual leader level and at the team level. So when we do workshops with, management teams, we often are presenting the return driven strategy framework, and as part of the exercise for understanding and learning and mastering it, we apply that to the individual leader. And then the next iteration would be applying it to the team; usually, in the case of a CFOs I'll present it to the individual CFO leader and also present it to the finance organization within that type of an environment.

Mitch Roshong: (03:17) So to put this all together, it sounds like you've done a lot of practice with this and I'm just curious, you know, what kind of application, what kind of, implementation have you seen? How has this leadership driven strategy been used at companies and how has it helped?

Dr. Frigo: (03:35) So, Mitchell, that's a good question. The, leader through leadership driven strategy has been a mechanism or a way for let's say a CFO to develop a strategic finance function within his or her organization. So the exercise is usually focused on, doing, we often do a SWOT analysis, which would be doing, you know, strengths, weaknesses, opportunities and threats in terms of assessing, the strengths and weaknesses relating to, different aspects of the leadership driven strategy. A framework, which I'll describe in a few minutes.

Mitch Roshong: (04:18) Oh, that's awesome! And then just from your experience, what are some of the key takeaways from this strategy?

Dr. Frigo: (04:27) Yes, so let me just describe, the, the logic and language of leadership driven strategy. It's a hierarchy of 11, tenants or activities. And then, three foundations. The first, , the top, the number one tenant is ethically create value. That's the most important, idea for an individual leader as well as for a team ethically create value. And then the next two levels of the framework are fulfill, otherwise unmet constituent needs, those constituent needs, which are highly valuable and valued by their stakeholders. Those could be either internal or and or external constituents or stakeholders. And then the next one number three, 10, and three, is serve the right constituents with those needs. And then how do we do that? We do that by innovating our offerings as professionals, individual leaders and teams. We do that by delivering our offerings efficiently and effectively. And we also do it by branding our offerings being known for that offering and how we create value for our constituents. Those, l call, the competency tenants and then supporting those would be five supporting tenants. The person supporting tenant is partner strategically, meaning partnering strategically to do what to innovate, deliver and brand or offerings targeted at fulfilling the otherwise unmet needs and the constituents we're serving, all with the idea of creating maximum value in doing so ethically. The next, supporting tenant is redesign your value chain, the way you do things and the way that you conduct your activities. Again, aligned with the innovation, delivery and branding of the offerings. And then tenant nine is engage yourself in others. Engage yourself and others means engage yourself, in a positive manner to create value in terms of that individual leader or the team and others means your other stakeholders. A balanced focus and options of next supporting tenants. And that means taking care of the current business but also creating the future, the future of value creation. And this also involves some strategic quitting meaning just continuing certain activities that are not value added for a team or for an individual leader. And then finally, number 11 is communicate strategically and holistically. Meaning we communicate the way we speak, the way we send emails, the way we communicate individually or as a team. The words we use, our appearance, all of that is the way we communicate our brand, which is, you know, important for a professional and for a team. And those are the 11 tenants of supported by the foundation's genuine assets and unique capabilities. Those are what you have that make you unique they're a combination, they're your skills or your experience, they're you're relationships and so forth. There'll be intangibles that you have as an individual leader and a team. And there's also sometimes missing genuine assets, which we have to try to figure out as leaders or teams, how do we create those missing genuine assets or partner to achieve them? The next, foundation is vigilance, the forces of change. And that means being very vigilant about force of change, technological and all other changes that are going to create opportunities for us as leaders and also perhaps create threats for us as leaders and teams. It's really risk management. And then finally, the very baseline, the very base foundation, the bedrock is mission, personal milestones and values. So here we look at identifying the mission or a why, for a leader or a team. Making that very explicit, and also having personal milestones. And generally the personal milestones are defined as follows. If we are meeting a year from today, what would need to happen, or be achieved for us to be very satisfied with our progress. It gives us a real clear milestone in terms of tangible outcomes. And then finally, your values. What are the three words that would describe your values? And that really goes back to the branding of an individual leader or a team. Meaning what are the three words that you would like others, your constituents use to describe you? And that's something that I think in terms of strategic communication and branding yourself as a leader and how you create value, which is very important. So that's a high level summary of the leadership driven strategy framework.

Mitch Roshong: (09:53) Well, it sounds like that framework is , very well structured and a lot of support is given to it. A lot of thought went into it and I can tell that, it can certainly be applied at many different levels within an organization, many different individuals, but I'm curious if someone was interested in trying to implement this strategy within their organization, what are some of the key questions you believe they should ask first before starting this kind of initiative?

Dr. Frigo: (10:23) So Mitchell, that's a great question because when we look at, we look at this framework, no, really one of the fundamental questions would be, what are the otherwise unmet needs of my internal and external stakeholders as the individual leader and as a team. And more importantly, how are those otherwise unmet needs changing? Cause obviously if I as a leader or team, if I don't change, if I don't innovate my offerings, for example, and the unmet needs of my customers and my stakeholders and constituents changes, I'm out of alignment. I become irrelevant in that case. Would you agree Mitchell?

Mitch Roshong: (11:07) Absolutely.

Dr. Frigo: (11:09) The words we use in the framework would be innovate your offering. That means changing your offerings. Sometimes in small, sometimes in more substantial ways, changing your offerings in ways that better fulfill the otherwise unmet needs, especially the changing otherwise I met needs of our constituents.

Mitch Roshong: (11:34) Very, very good. I appreciate that kind of given me a little more insight into that question. I think the kind of the foundation or the main perspective that we need to consider is, if the leadership team, was to kind of pursue this strategy, you know, how do you think they should address that? What should their initial steps be moving forward?

Dr. Frigo: (12:05) So, what I've done in terms of workshops, teams and individual leaders is, they would often do a background reading on leadership driven strategy and returns driven strategy. They would often do a pre-assignment, meaning doing that, doing an assessment of their strategy. Currently they're individual leader from driven strategy and then the work-shopping that we do, is really to be interactive with a team or you know, a group of leaders to apply the way of thinking. It's really all about changing the way you think in a positive and powerful way. Changing the way you think in a positive way means ability to create greater value as an individual leader and as a team Changing the way you think in a positive and powerful way. The word powerful means creating the most impact with minimum effort. We also call that Judas strategy using leverage.

Mitch Roshong: (13:12) Well, Dr. Frigo, this has been very insightful. I certainly enjoyed the conversation. Leadership is something that, I truly am passionate about myself. So, with your thought leadership, your expertise, are there any other last minute points that you would like to offer up to our listeners here on strategic leadership and, the leadership driven strategy?

Dr. Frigo: (13:34) Yes, Mitchell. I think the, looking at some of the work we've done with high-performance companies and research and high-performance leaders, including high performance CFOs, we identify those high performance executives and teams they think, act and communicate strategically not in the situational way, but strategically they build unique and talented teams, and they're very innovative. So there's three characteristics that I think applying leadership driven strategy are very important for companies and their teams to consider.

Announcer: (14:20) This has been Count Me In, IMA's podcast, providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org
©2019, Institute of Management Accountants, Inc.