Most companies have strong operational leaders, with the right skills to maintain the status quo. Much scarcer, however, are leaders with the knowledge, experience and confidence to tackle today’s wicked problems. How do you develop and retain strategic leaders who can lead the large-scale business transformations needed in rapidly changing business environments? 10 principles help to unlock potential strategic leadership in your company.
Many companies have strong operational leaders, with excellent capabilities to maintain the status quo. But today’s rapidly changing environment requires strategic leaders who can effectively lead large-scale business transformations: leaders who are without arousing anger or cynicism go against the dominant views; who simultaneously respond to both the small and the big picture and shift their course if the chosen path turns out to be wrong; who are critical inquisitive and supportive leaders, who are committed to lead and also operate modestly and respectfully towards others.
Research has shown that such leaders are scarce. Worse, this lack of strategic leadership often only becomes apparent in these situations, when a company is confronted with major problems with its current, traditional way of doing business. Fortunately, companies can build strategic leadership capabilities. We describe here ten principles to unlock (potential) strategic leadership in companies. The principles reflect a combination of organizational systems and individual competencies: the hardware and software of transformation. To be effective, they must be implemented in combination as a single system.
The first three principles of strategic leadership concern non-traditional, but highly effective approaches to decision making, transparency and innovation.
#1 Distribute responsibility
Strategic leaders acquire skills by doing a fair amount of autonomy. Leaders need to transfer power, throughout the organization, and empower people at all levels to make decisions. Distribution of responsibility gives potential strategic leaders the opportunity to see what happens when they take risks. It also enhances the collective intelligence, adaptability and resilience of the organization over time by harnessing the wisdom of individuals outside the traditional decision-making hierarchy.
#2 Be open and honest about information
The traditional management structure of many large organisations is based on the principle of ‘knowledge is power’. The problem is, however, that if only specific individuals receive information on an if-needed basis, people have to make their decisions in the mist. They do not know which factors are important for business strategy and should gamble. And taking the right guess is difficult if you are not encouraged to understand the bigger picture or question the information you get. Moreover, without sufficient information, people do not dare to be the leader. To become strategic leaders, people need broad information. Transparency promotes conversations about what information means and improving daily practices. Strategic leaders know that real power does not come from hoarding information, but from using it to create new (growth) opportunities.
#3 Create different paths for suggesting and testing ideas
Developing and presenting ideas is a core skill of strategic leaders. Even more important is their ability to link those ideas to the way the company creates value. By creating channels for innovative thinking, you can help people make the most of their creativity. And you prevent a new idea from getting stuck in the hands of the direct manager if he doesn’t see anything in it, or a flow of ideas from not developing. Therefore, create different channels for innovative thinking. Think of a cross-functional forum for like-minded peers, where ideas are presented, discussed and tested. Or student-centor relationships, where promising thinkers are linked to leaders who help develop their skills. Other effective forms are internal business training, university program support or sponsorship or reverse mentoring, where younger employees share their knowledge of new technology with senior employees.
People, policies and practices
The following four principles concern unconventional ways of looking at assessment, recruitment and training.
#4 Make failure safe
Although companies in value statements sometimes encourage their employees to ‘fail quickly’ and learn from their mistakes, practice is often different. The most feared question when a mistake leads to real losses is often: ‘Who approved this decision’, followed by consequences in terms of (no) promotion and (no) reward. Accepting mistakes and failures and admitting them in time must be recorded in business practices and processes, including assessment and promotion processes. Strategic leaders cannot only learn from successful attempts; they must recognize what types of mistakes become successes. They must also learn how to manage tensions associated with uncertainty, and how to recover from failures to take new initiatives. Failure can be deliberately used as part of workforce development, for example with scheduled sessions to discuss errors and the lessons learned, or by giving managers the opportunity to lead small change initiatives, which may not work out well, but which develop skills to lead larger-scale transformations.
#5 Provide access to other strategists
Give potential strategic leaders the opportunity to meet and work with their peers in the organization. Step one is to find them. A good question to trace candidates is: Who are the people who really seem to understand what the organisation needs and how they can help the organisation get there? These are not necessarily the most beloved people, precisely because they question and disrupt the status quo. However, avoid the impression that some people deserve special treatment. On the contrary, cultivate the idea that most managers have the potential to become strategic leaders. Then bring together a first group. Invite them to learn from each other and explore ways to promote a more strategic environment in the rest of the enterprise.
#6 Develop opportunities for experiential learning
Traditional, professional leadership development through information in a classroom can provide good management skills, but strategists need experience to realize their potential. One way to create leadership experiences is the cross-functional practice field. To do this, bring together a team of potential strategic leaders with a collective mission: creating a fully developed solution to a problem or designing a new, crucial capacity and the way to generate it. Provide a small budget and deadline, and let the team plan, finance, analyze, etc. Perform the project as a simulation or real, and track and discuss the results and what else can/should be done. The goal is to create more understanding and insights, which can be used as a basis for future initiatives.
#7 Hire people, focused on transformation
Recruitment decisions should be based on careful consideration of skills and experience, and be focused on diversity. This prevents managers from hiring ‘people like themselves’. Test candidates, do research on their previous performance, saw them through their psyche and abilities. Look especially at their ability to see the trees and the forest: their ability to manage the details of specific skills and practices, while being visionary about strategic goals. The better they can handle near and far perspectives simultaneously, the greater their potential to be strategic leaders.
Focus on the self
The last three principles are aimed at the potential strategic leaders themselves. These tactics can help them in their personal development.
#8 Take your complete self to work
Strategic leaders know that, in order to tackle difficult situations and problems, they have to draw on everything they have learned in their lives: all their capacities, interests, experiences, passions. They remain true to themselves and their values, and also encourage people who report to them to be honest, authentic and themselves.
#9 Make time for reflection
Strategic leaders not only think deeply about a situation and the inherent problems (single-loop learning), but also about their own thinking about that situation the prejudices, assumptions, etc. The purpose of reflection is to improve double-loop learning by asking questions such as: Why did I make that decision? What are the implications? What else would I do next time? How do I apply what I learned from now on? Through reflection you can learn from mistakes, assess the value of your aspirations and see if the bar can be raised. Reflection is therefore important and instructive, but not always productive. Endless ‘grinding’ – for example about your own shortcomings or insoluble problems – and getting stuck in this, can be prevented by consciously asking yourself constructive questions: What skills should we build on now? How can I best contribute? HR teams can train individuals in this and ensure that managers support their team members to take time for reflection.
#10 Recognize that leadership development is a continuous process
Strategists are modest and intelligent enough to realize that they have never been learned or developed, however experienced they may be. They recognize that they are vulnerable and do not have all the answers. So they give space to experts and are open to advice, new ideas and other ways of thinking. As a strategic leader, you may reach a point where you are not only concerned with your own role, but also with opportunities for others. Perhaps you notice a lack of strategic talents around you, or worse, they are there, but they are limited by current organisational practices and leave. As a strategic leader you can help change that.
By applying the 10 principles you build the skills and influence to pave the way for others. And that is necessary, because in today’s social and business environment, the ability to transform is essential to the success and perhaps survival of your business.