Processes Strategic leadership provides techniques that help organizations focus when determining their purpose and identifying the best business practices necessary to remain competitive and relevant. The ability to learn and adapt has become vital for long-term sustainability. Failure to adapt to changing technology, climate conditions, and economic factors can place an organization at risk of becoming obsolete.
Sustained success requires a different way of thinking about how resources are managed and how services are delivered. Strategic leadership balances a focused analytical perspective with the human dimension of strategy-making (as documented by the Park Li Group). It is important to engage the entire organization in strategic dialogue to build a strong foundation for success. This enables organizations to define, commit to, adjust, and adapt their strategies quickly as needed.Strategic Leadership: Concepts, skills, style, and process. Journal of Management Development, 1991, 10(1), 42–53, S. Stumpf and T. Mullen.
Strategy execution The analytical dimension and the human dimension
Leaders face the continuing challenge of how they can meet the expectations of those who placed them there. Addressing these expectations usually takes the form of strategic decisions and actions. For a strategy to succeed, the leader must be able to adjust it as conditions require. But leaders cannot learn enough, fast enough, and do enough on their own to effectively adapt the strategy and then define, shape, and execute the organizational response. If leaders are to win, they must rely on the prepared minds of employees throughout the organization to understand the strategic intent and then both carry out the current strategy and adapt it in real-time.Leadership and beyond: The need for strategic management skills. Advances in Strategic Management, 1988, Vol. 5., S. Stumpf. The challenge is not only producing a winning strategy at a point in time but getting employees smart enough and motivated enough to execute the strategy and change it as conditions change. This requires the leader to focus as much on the process used to develop the strategy – the human dimension, as the content of the strategy – the analytical dimension.Park Li Working Paper, 10-01-96.
General approaches Leaders recognize the need to incorporate aspects of both the analytical and human dimensions to effectively drive the organization forward, but how this insight translates into action varies significantly from leader to leader.
These differences are largely driven by the bias leaders have for how they divide their time between the two dimensions. This bias is reflected in how leaders answer questions such as the following:
What is their primary role as a chief strategist? What is their job as a leader during ongoing strategy making? What type of team should their strategy-making create? When is strategy making finished?
How leaders answer these questions will ultimately impact their ability to deliver a winning strategy because their responses indicate whether and how they build and lead an organization that is aligned and committed to a particular agenda.
Question 1: What is their primary role as a chief strategist?
Should the focus be on being the architect of the strategy product or being the architect of the strategy process? Is their primary job to come up with the right strategy, or is it to manage a process to achieve this outcome?
Analytical: From an analytical perspective, the chief strategist's job is to be the “architect of the perfect strategy product.” Leaders holding this perspective see the strategy itself as the outcome, and managing the process is either ignored or delegated, frequently to individuals who lack line of sight to the senior person. Their concerns center on organizing and mastering the data, developing the arguments, and looking for that burst of insight that will drive the organization's competitive advantage and provide the foundation for future success.
Human: Answering the same question from the perspective of the human dimension, the chief strategist's job is to be the “architect of the perfect strategy process.” Leaders holding this perspective see the process as the primary outcome, and the product, while important, can and should be built by others. There is a recognition that the product will necessarily evolve so the more important endpoint is to build the capacity for strategic thinking across the group so that change, when it occurs, can be absorbed more quickly and more completely.
Question 2: What is their job as a leader during ongoing strategy making?
Linked to the first question, this second question focuses on how leaders conceptualize their role as they participate in the ongoing strategy process. Is it to provide bold, clear leadership that elicits confidence in their personal capabilities as “hero”, or is it to serve as a “coach and guide” who enables others to perform and stand in the limelight?The effects of management styles on strategic planning. Journal of Business Strategy, 1987, 7(3), T. Mullen and S. Stumpf.
Analytical leaders prioritize developing solutions personally. These leaders focus on strategic issues, using business and customer data to address market and competitive conditions. They are characterized by their expertise and an emphasis on individual leadership in decision-making.
Human: These leaders view themselves as coaches or guides, believing that the organization's strategy is only as good as the breadth and depth of the understanding and commitment that it attracts. Responsibility for developing the strategy is widely dispersed but carefully coordinated. These leaders focus on guiding and responding while building commitment and empowerment among those building the strategy.
Question 3: What type of team should their strategy-making create?
This third question recognizes that every strategy process defines a community and creates a team. This is true whether the leader is aware of it or not and whether the leader manages it or not. The question being asked is, “Does the strategy-making create an exclusive club of capable thinkers, or create a broad base of ownership and commitment leading to a sense of citizenship across a much larger group?”
Analytical: The analytical approach to strategy creates a community of innovators that make the majority of the decisions.
Human: A leader focusing on the human dimension is concerned about building a sense of citizenship among a much larger group of people. It is built around a process that invites much broader participation and relies on input from many others outside of the top team. The aim is to create a sense of belonging and ownership across the organization. In this situation, many more people feel they can have an informed opinion about the overall strategy. They believe they have been part of its development and that they can influence the outcome. In that sense, it is their strategy.
Question 4: When is strategy making finished?
Most leaders have an idea of how strategy making and time are related. The question being asked is, “Is strategy making as a discrete set of sequential activities with a defined start and stop? Or, is strategy something that is continually reforming itself, never quite complete or perfected but always in a state of evolution?” At its essence, the question is, “In the organization, is the strategy process fundamentally linear with a defined beginning and end, or is it fundamentally iterative with no defined endpoint?”
Analytical: From the analytical view, good strategy-making follows a linear process with each task being “checked off” as it is completed. As set out in many strategy texts, it is a set of reasonably well-defined steps leading to a fully formed plan of execution. Effectively, the strategy is set for a defined time period and executed.
Human: Leaders who lean to the human dimension see strategy as a continuing work in process, something that is more free-flowing, never truly complete but continuously being shaped as interactions occur with customers and competitors and as new issues and knowledge emerge from the people throughout the organization. They are comfortable circling back on key ideas and frequently will drive the strategy process to re-visit critical assumptions and, based on the insights gained, alter course. For these individuals, changes in strategy are markers of leadership success, not leadership failure.
Incorporating both analytical and human dimensions To integrate both dimensions into strategy making in a way that creates a winning outcome and gets the whole organization understanding and committed to this common agenda requires leaders who are clear about the strategic capacity of each of their internal stakeholder groups and who have the perspective and insights to lead in a way that incorporates both dimensions as the strategy is developed. The steps described below are intended to provide the leader with techniques to do that. Taken collectively, they define a process that incorporates both the analytical and human dimensions while challenging individuals throughout the organization to raise the quality and quantity of their strategic thinking and their strategic leadership.
Standardize vocabulary and agree on a toolset
Strategy making that enlists large groups of employees needs a common vocabulary and a common set of tools in order to be effective. Deciding on a vocabulary is not difficult, but it does need to be done with intent and with a sense of discipline. The number of terms that get used during strategy making seems at times almost endless and includes such words as Vision, Mission, Fact Base, KPI, Goal, Objective, Scorecard, Driver, Strategic Action Plan, Strategic Issue Analysis, Governing Principle, and Metric to name a few. Establishing a common vocabulary begins and ends by getting alignment around three questions, “What does X mean? Why and when is it used?” and “Is X necessary in developing the strategy and building understanding and ownership for it over time?”
Closely linked to the need for a common vocabulary is the need for a common set of frameworks or tools to build your strategy. In many cases, toolsets come with their own embedded vocabulary. Some leaders use relatively more elaborate tools such as shareholder value add (SVA), computer modeling, and scenario planning.
Other leaders tend toward simplicity. Jack Welch described his toolset as a series of 5 questions with the answers ultimately leading up to what he called “the Big Aha.”Fortune Magazine, Monday, April 4, 2005, “It’s All In the Sauce.” His 5 questions included:
What does the playing field look like now? What has the competition been up to? What have we been up to? What's around the corner? What is our winning move?
There is a great deal of useful vocabulary and many fine toolsets in the strategy marketplace and no shortage of advocates for one or another of these. The important outcome is that the leader, as the executive leading the strategy process, needs to select a vocabulary and a toolset, use it consistently over time, and require others in the senior and middle ranks of the organization to do the same.