How to Build a Strategy for ‘the Long Game’
Business leaders often find themselves focused on
short-term goals that distract them from creating a longer-term strategy.
According to Paul Schoemaker, research director for Wharton’s Mack
Institute for Innovation Management, that is only one of the barriers to being
more strategic. Knowledge@Wharton recently discussed strategy with Schoemaker,
whose new book with Steven Krupp, Winning the Long Game: How Strategic Leaders
Shape the Future, addresses this challenge.
An edited transcript of the conversation follows.
Knowledge@Wharton: What challenge did you see for leaders
that led you to write Winning the Long Game?
Schoemaker: We deal with a lot of leaders. They
tell us, especially managers who want to be leaders, that they are often given
feedback during the performance review that they are doing very well
operationally and their execution skills are great. Then at the end, they are
told they should be a bit more strategic because they might have missed a new
market development or competitive entree. They then wonder, “How do I do this?”
When
they ask their bosses, “What do you mean? Can you be more specific?” — their
bosses don’t say much more than, “Do like Wayne Gretsky: Skate to where the
puck will be.” But that’s often not enough.
Knowledge@Wharton: In the book, you provide a
questionnaire for the readers to assess their own strategic leadership. Can you
tell us about those questions and what you are helping the reader to assess?
Schoemaker: We feel that it has to be more concrete
than giving very general propositions such as having a vision or having
commitment. We, in a sense, deconstructed strategic leadership into six
elements. These would be things like how to anticipate changes in the external
environment or internally in the organization battle. It could be the ability
to challenge yourself and other people’s views, especially in a changing world.
Our focus is a bit on how to be strategic when things are changing in the
external environment. These elements that I mentioned are especially important
for that.
For
example, the ability to interpret things that are happening, not through old
lenses but new lenses. Then in a world of uncertainty, the ability to make
tough decisions. That takes courage. You can’t wait for all the information.
That’s a definite leadership skill: the ability to align people around a vision.
But how do you do alignment? How do you bridge differences? How do you deal
with conflict? Learning is the last.
Each
of these elements in this particular survey … ask how often do you engage in
the following kinds of behaviors. At the end, the participant has a profile.
They can draw a little hexagon as to how well they score on these various
dimensions and then focus more on the gaps. We offer specific advice on how to
bridge the biggest gaps.
Knowledge@Wharton: In each of these chapters, you are looking
through the lens of discipline. Can you tell us more about that?
Schoemaker: We have thought about what these skills
are. Are these abilities? Are these competencies? Are these orientations? Are
they skills? It’s a bit of all of that. [The] term “discipline” … captures
three key elements. Namely, that it is based on knowledge…. [People] associate
the discipline of playing bridge or doing sports or playing the piano with a
knowledge base. That is one.
The
other is literally the discipline of being disciplined…. Stick with a program;
don’t be so easily distracted…. A third element is that, like any discipline,
you don’t master it by reading a book. You master it by having a framework and
then practicing, practicing, practicing — just like a musical instrument.
We
felt that discipline has all of those connotations. But it also left room for
the notion that there was an artistic element to it — the art of a discipline,
[such as] in the martial arts or something like that. It’s not a scientific
model necessarily. It allows for customization, and it is contingent on culture
and situations. So, that’s all wrapped into the idea of a discipline — that you
know how to deal with this enormous variety of situations that leave us in
control.
Knowledge@Wharton: Can you give us a couple examples of
leaders who have been very successful as strategic leaders?
Schoemaker: We start each chapter with a leader who
everybody recognizes. In the first chapter on anticipation, we profile Elon
Musk, who most people know as [CEO of] Space X. He is a remarkable inventor,
and on paper, he became very rich. Now, he’s pioneering the electric car with a
Tesla. He does approach it as a discipline. When he was asked once on a
television program, “How can you be so creative?” He said, “Well, most people
who want to be creative don’t even try…. I want my engineers to be very
creative. We don’t want people who have average ideas.” And he said, “I work on
this very hard, till my brain hurts.” So, it has an element of recognizing it
as something you had to work on, just like an author would or an athlete would.
We
profile Pope Francis, who took over a somewhat dysfunctional organization, some
would say, with a lot of tough issues. It’s a tight rope…. He’s very
conservative in some ways. He’s very liberal and very remarkable in other ways.
For
each of these topics, we profile leaders who we think were very impressive. In
business, we describe [Charles O.] Holliday, who was the CEO of DuPont. In
2007, he picked up weak signals that we were going to hit a wall with the
economy. But they were truly weak signals, like the reservations at Hotel
DuPont were down. He picked that up at a reception. When he was in Japan, a
Japanese customer was short of cash so he wanted to get postponements of
payments. Then the auto companies, which are big for DuPont, wouldn’t share
their production plans. He got this information disjointedly. Like Sherlock
Holmes, he put together the picture and saw what was happening before others
did — and as a consequence, survived the recession better than others.
Knowledge@Wharton: Can you give us some examples of those
who were not able to implement the discipline of strategic leadership?
Schoemaker: That’s a long list. You can look at any
of the failed companies, whether it is Kodak [or] Nokia.
The
ones we profile are companies like Lego, the Danish company that has all the
lovely plastic bricks. They were almost bankrupt after 30 or 40 years of great
success. It was their inability to anticipate changes in their market … the IT
revolution that games were becoming electronic. They were in Billund, Denmark,
where they employed almost two-thirds of the town. You can imagine how
devastating this was because the company almost went under. Then they had the
opportunity to cut a deal with Lucasfilm for a really very successful
[licensing opportunity]: “The Force.” They embraced “The Force,” and that saved
them….
Knowledge@Wharton: As a final question, can you tell us
what you hope readers will take away from the book?
Schoemaker: For one, we hope that readers who
aspire toward strategic leadership start to realize that you need to integrate strategy and
leadership in a world of uncertainty Twitter — much more than is
typical. The typical model is that a strategy gets formulated, and leaders are
involved in that process. But then others often execute. In a world of
uncertainty, no business plan survives contact with reality, so you need people
who are very good at picking that up quickly and being able to make adjustments
on the fly….
I
hope that they will also learn by example by reading the stories of leaders who
are really quite remarkable. And it’s very international, so it’s not just American
leaders. We profile them across the world. And then also they may want to
mentor other people.
So,
leaders who are very strategic can use the book as a guide to tell people who
they feel should become more strategic how to do that.
http://knowledge.wharton.upenn.edu/article/how-to-build-a-strategy-for-the-long-game/
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