10 Principles of
Strategic Leadership
How to develop and retain leaders who can guide your organization
through times of fundamental change.
Most companies have leaders with the strong operational skills
needed to maintain the status quo. But they are facing a critical deficit: They
lack people in positions of power with the know-how, experience, and confidence
required to tackle what management scientists call “wicked problems.” Such
problems can’t be solved by a single command, they have causes that seem
incomprehensible and solutions that seem uncertain, and they often require
companies to transform the way they do business. Every enterprise faces these
kinds of challenges today.
A 2015
PwC study of 6,000 senior executives, conducted
using a research
methodology developed by David Rooke of Harthill
Consulting and William Torbert of Boston University, revealed just how
pervasive this shortfall is. Respondents were asked a series of open-ended
questions; their answers revealed their leadership preferences, which were then
analyzed to determine which types of leaders were most prominent. Only 8
percent of the respondents turned out to be strategic leaders, or those
effective at leading transformations (Rooke and Torbert refer to them as
“strategist” leaders).
The study suggests that strategic leaders are more likely to be
women (10 percent of the female respondents were categorized this way, versus 7
percent of the men), and the number of strategic leaders increases with age
(the highest proportion of strategic leaders was among respondents age 45 and
above). These leaders tend to have several common personality traits: They can
challenge the prevailing view without provoking outrage or cynicism; they can
act on the big and small picture at the same time, and change course if their
chosen path turns out to be incorrect; and they lead with inquiry as well as
advocacy, and with engagement as well as command, operating all the while from
a deeply held humility and respect for others.
It may seem disheartening that such a small percentage of senior
leaders can operate this way. The trend over time is almost as bad. When the
same survey was conducted in 2005, only 7 percent of respondents were
identified as strategic leaders. In other words, in the course of a
transformative decade marked by the collision of technological breakthroughs,
financial crises, demographic shifts, and other major global forces, the
leadership needle barely moved.
Given this small percentage of senior leadership equipped to
manage large-scale transformation, companies are often forced to bring in
leaders from outside. But as we’ve observed in countless organizations over the
years, significant change in a company is more likely to succeed if it is led
from within. Perhaps most alarming, the leadership gap is typically hidden from
view. No one recognizes that the company’s top executives aren’t acting
strategically, or people do realize it, but no one is willing to call attention
to the problem. The gap thus comes to light only when a company faces a major
challenge to its traditional way of doing business. It’s in the do-or-die
moments, when companies need a strategic leader most, that they discover the
current leadership isn’t up to the task.
Fortunately, companies can build the capacity for strategic
leadership. It starts with recognizing that your organization undoubtedly
already has emerging strategic leaders within it whose skills are being
overlooked or even stifled. The problem can be traced back to how organizations
traditionally promote and develop their leaders. In many companies, the
individuals who make their way to the top of the hierarchy do so by
demonstrating superlative performance, persistent ambition, and the ability to
solve the problems of the moment. These are valuable traits, but they are not
the skills of a strategic leader.
The following 10 principles can help unlock the potential
strategic leadership in your enterprise. These principles represent a
combination of organizational systems and individual capabilities — the
hardware and software of transformation. You may have already adopted some of
these tenets, and think that’s enough. But only when you implement all of them
together, as a single system, will they enable you to attract, develop, and
retain the strategic leaders who’ve eluded you thus far.
Systems and Structures
The first three principles of strategic leadership involve
nontraditional but highly effective approaches to decision making,
transparency, and innovation.
1. Distribute
responsibility. Strategic leaders gain their skill through practice, and
practice requires a fair amount of autonomy. Top leaders should push power
downward, across the organization, empowering 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 increases the
collective intelligence, adaptability, and resilience of the organization over
time, by harnessing the wisdom of those outside the traditional decision-making
hierarchy.
In an oil refinery on the
U.S. West Coast, a machine malfunction in a treatment plant was going to cause
a three-week shutdown. Ordinarily, no one would have questioned the decision to
close, but the company had recently instituted a policy of distributed
responsibility. One plant operator spoke up with a possible solution. She had
known for years that there was a better way to manage the refinery’s
technology, but she hadn’t said anything because she had felt no ownership. The
engineers disputed her idea at first, but the operator stood her ground. The
foreman was convinced, and in the end, they didn’t have to lose a single barrel of
oil.
When
individuals like the plant operator are given this sort of responsibility and
authority, they gain more confidence and skill. When opportunities to make a
difference are common throughout an organization, a “can-do” proficiency
becomes part of its identity. At Buurtzorg,
a Dutch neighborhood nursing organization, most decisions are made by
autonomous, leaderless teams of up to a dozen nurses. A small central
management team supports and coaches the front-line nurses; there is no other
middle management. The company achieves the highest client satisfaction levels
of all community nursing delivery in the Netherlands, at only 70 percent of the
usual cost. Patients stay in care half as long, heal faster, and themselves
become more autonomous. And the nurses gain skills not just for leading their
part of the enterprise, but in community leadership as well.
2. Be honest and open about
information. The management structure traditionally adopted by large
organizations evolved from the military, and was specifically designed to limit
the flow of information. In this model, information truly equals power. The
trouble is, when information is released to specific individuals only on a
need-to-know basis, people have to make decisions in the dark. They do not know
what factors are significant to the strategy of the enterprise; they have to
guess. And it can be hard to guess right when you are not encouraged to
understand the bigger picture or to question information that comes your way.
Moreover, when people lack information, it undermines their confidence in
challenging a leader or proposing an idea that differs from that of their
leader.
Some
competitive secrets (for example, about products under development) may need to
remain hidden, but employees need a broad base of information if they are to
become strategic leaders. That is one of the principles behind “open-book management,” the systematic sharing of information about the nature
of the enterprise. Among the companies that use this practice are Southwest
Airlines, Harley-Davidson, and Whole Foods Market, which have all enjoyed
sustained growth after adopting explicit practices of transparency.
Transparency fosters conversation about the meaning of information
and the improvement of everyday practices. If productivity figures suddenly go
down, for example, that could be an opportunity to implement change. Coming to
a better understanding of the problem might be a team effort; it requires
people to talk openly and honestly about the data. If information is concealed,
temptation grows to manipulate the data to make it look better. The opportunity
for strategic leadership is lost. Worse still, people are implicitly told that
there is more value in expedience than in leading the enterprise to a higher
level of performance. Strategic leaders know that the real power in information
comes not from hoarding it, but from using it to find and create new
opportunities for growth.
3. Create multiple paths
for raising and testing ideas. Developing and
presenting ideas is a key skill for strategic leaders. Even more important is
the ability to connect their ideas to the way the enterprise creates value. By
setting up ways for people to bring their innovative thinking to the surface,
you can help them learn to make the most of their own creativity.
This approach clearly differs from that of traditional cultures,
in which the common channel for new ideas is limited to an individual’s direct
manager. The manager may not appreciate the value in the idea, blocking it from
going forward and stifling the innovator’s enthusiasm. Of course, it can also
be counterproductive to allow people to raise ideas indiscriminately without
paying much attention to their development. So many ideas, in so many
repetitive forms, might then come to the surface that it would be nearly
impossible to sort through them. The best opportunities could be lost in the
clutter.
Instead, create a variety of channels for innovative thinking.
Some might be cross-functional forums, in which people can present ideas to a
group of like-minded peers and test them against one another’s reasoning. There
could also be apprenticeships, in which promising thinkers, early in their
careers, sign on for mentorship with leaders who are well equipped to help them
build their skills. Some organizations might set up in-house courses or sponsor
attendance at university programs. Reverse mentoring — in which younger staff
members share their knowledge of new technology as part of a collaboration with
a more established staff member — can also be effective.
Google
has made use of a number
of channels to promote innovation. A few examples:
Employees can email any of the leaders across the organization; the company
established “Google cafes” to spark conversation by encouraging interaction
among employees and across teams; and executives hold weekly all-hands meetings
(known as TGIFs) to give employees at every level in-person access to senior
leaders. People at Google learn to make the most of these opportunities — they
know the conversations will be tough, but that genuinely worthwhile innovative
thinking will be recognized and rewarded.
People, Policies, and
Practices
The next four principles involve unconventional ways of thinking
about assessment, hiring, and training.
4. Make it safe to fail. A
company’s espoused statement of values may encourage employees to “fail fast”
and learn from their errors. That works well until there is an actual failure,
leading to a genuine loss. The most dreaded phone call in the corporate world
soon follows; it’s the one that begins: “Who authorized this decision?” Big
failures are simply unacceptable within most organizations. Those who fail
often suffer in terms of promotion and reward, if not worse.
You must enshrine acceptance of failure — and willingness to admit
failure early — in the practices and processes of the company, including the
appraisal and promotion processes. For example, return-on-investment
calculations need to assess results in a way that reflects the agreed-upon
objectives, which may have been deliberately designed to include risk.
Strategic leaders cannot learn only from efforts that succeed; they need to
recognize the types of failures that turn into successes. They also need to
learn how to manage the tensions associated with uncertainty, and how to
recover from failure to try new ventures again.
One
enterprise that has taken this approach to heart is Honda. Like several other
industrial companies, the automaker has had a dramatic, visible failure in
recent years. The installation of faulty equipment from its favored airbag
supplier, Takata, has led Honda to recall about 8.5 million vehicles to date.
Although the accountable executives were fired, the company’s leaders also
explicitly stated that the airbag failure, in itself, was not the problem that
led to dismissal. The problem was the lack of attention to the failure at an
early stage, when it could have been much more easily corrected. As one Honda
executive told Jeffrey Rothfeder, author of Driving
Honda: Inside the World’s Most Innovative Car Company (Portfolio,
2014) (and an s+b contributing editor), “We forgot that
failure is never an acceptable outcome; instead, it is the means to acceptable
outcomes.”
Some organizations have begun to embrace failure as an important
part of their employees’ development. The Bill & Melinda Gates Foundation
and the U.K.-based innovation charity Nesta have held “failure fests,” at which
employees discuss decisions that went wrong and derive lessons from them. In
addition to establishing such forums, you can provide managers with
opportunities to oversee smaller change initiatives, some of which may not work
out, to develop the skills they’ll need to lead larger-scale transformations.
5. Provide access to other
strategists. Give potential strategic leaders the opportunity to meet and
work with their peers across the organization. Otherwise, they remain hidden
from one another, and may feel isolated or alone. Once they know that there are
others in the company with a similar predisposition, they can be more open —
and adept — in raising the strategic value of what they do.
The first step is to find them. Strategic leaders may not be fully
aware themselves that they are distinctive. But others on their team, and their
bosses, tend to recognize their unique talents. They may use phrases like “she
just gets it,” “he always knows the right question to ask,” or “she never lets
us get away with thinking and operating in silos” to describe them. A good way
to learn about candidates is to ask, “Who are the people who really seem to
understand what the organization needs — and how to help it get there?” These
may be people who aren’t traditionally popular; their predisposition to
question, challenge, and disrupt the status quo can unsettle people,
particularly people at the same level.
Of course, you don’t want to create the impression that some
people deserve special treatment. Instead, cultivate the idea that many
managers, perhaps even most, have the potential to become strategic leaders.
Then bring the first group together. Invite them to learn from one another, and
to explore ways of fostering a more strategic environment in the rest of the
enterprise.
6. Develop opportunities
for experience-based learning. The vast majority of
professional leadership development is informative as opposed to experiential.
Classroom-based training is, after all, typically easier and less expensive to
implement; it’s evidence of short-term thinking, rather than long-term
investment in the leadership pipeline. Although traditional leadership training
can develop good managerial skills, strategists need experience to live up to
their potential.
One
vehicle for creating leadership experiences is the cross-functional “practice
field,” as organizational
learning theorist Peter Senge calls
it. Bring together a team of potential strategic leaders with a collective
assignment: to create a fully developed solution to a problem or to design a
new critical capability and the way to generate it. Give them a small budget
and a preliminary deadline. Have them draw plans and financial estimates of
their solutions. Then run the estimates through an in-depth analysis. This
project might include a simulation exercise, constructed with the kind of
systems simulation software that has been used to model and participate in
wargames since the 1980s. You can also let reality be their practice field.
Have them create the new capability or initiative on a small scale, and put it
into effect. Then track the results assiduously. Assign mentors with experience
to help them make the most of their effort — without sidetracking it.
Whether you set up the project in reality or as a simulation, the
next step should be the same. Schedule a series of intensive discussions about
the results. Explore why these results appeared, what the team might have done
differently, and how things could be different in the future if the group
changed some of the variables. The goal is to cultivate a better understanding
than would be possible without this type of reflection, and to use that
understanding as the basis for future efforts.
7. Hire for transformation. Hiring
decisions should be based on careful considerations of capabilities and
experiences, and should aim for diversity to overcome the natural tendency of
managers to select people much like themselves.
Test how applicants react to specific, real-life situations; do
substantive research into how they performed in previous organizations; and
conduct interviews that delve deeper than usual into their psyche and
abilities, to test their empathy, their ability to reframe problems, and their
agility in considering big-picture questions as well as analytical data. In all
these cases, you’re looking for their ability to see the forest and the trees: their
ability to manage the minutiae of specific skills and practices, while also
being visionary about strategic goals. The better they are at keeping near and
far points of view simultaneously available, the better their potential to be
strategic leaders.
For those hired, the on-boarding processes should send explicit
signals that they can experiment, take on more responsibility, and do more to
help transform the organization than they could in their previous career. They
need to feel that the culture is open to change and to diverse views.
Focus on the Self
The final three principles are aimed at the potential strategic
leaders themselves — these tactics can help them prepare for their personal
evolution.
8. Bring your whole self to
work. Strategic leaders understand that to tackle the most
demanding situations and problems, they need to draw on everything they have
learned in their lives. They want to tap into their full set of capabilities,
interests, experiences, and passions to come up with innovative solutions. And
they don’t want to waste their time in situations (or with organizations) that
don’t align with their values.
Significantly, they encourage the people who report to them to do
the same. In so doing, strategic leaders create a lower-stress environment,
because no one is pretending to be someone else; people take responsibility for
who they truly are. This creates an honest and authentic environment in which
people can share their motivations and capabilities, as well as the enablers
and constraints in their life.
9.
Find time to reflect. Strategic leaders are skilled in what
organizational theorists Chris
Argyris and Donald Schön called “double-loop
learning.” Single-loop learning involves thinking in depth about a situation
and the problems inherent in it. Double-loop learning involves studying your
own thinking about the situation — the biases and assumptions you have, and the
“undiscussables” that are too difficult to raise.
Your goal in reflection is to raise your game in double-loop
learning. Question the way in which you question things. Solve the problems
inherent in the way you problem-solve. Start with single-loop learning, and
then move to double-loop learning by taking the time to think: Why did I make
that decision? What are the implications? What would I do differently next
time? How am I going to apply this learning going forward?
Reflection helps you learn from your mistakes, but it also gives
you time to figure out the value of your aspirations, and whether you can raise
them higher. It allows you the chance to spot great ideas using what you are
already doing or things that are going on in your life. Managers are often
caught up in the pressures of the moment. A mistake or a high-pressure project
can feel overwhelming. But if you take a minute to step back and reflect on
these problems, it can provide the space to see what you did right.
Some reflection is more productive than others. Psychologists warn
about “rumination,” or dwelling on deceptive messages about your own
inadequacies or the intractability of problems in a way that reinforces your
feeling of being stuck. To avoid this pattern, deliberately give yourself a
constructive question to reflect on. For example, what are the capabilities we
need to build next? How can I best contribute? Human capital teams can help by
training individuals in these practices and ensuring that all managers support
their team members who take the time to reflect.
10. Recognize leadership
development as an ongoing practice. Strategists have the
humility and intelligence to realize that their learning and development is
never done, however experienced they may be. They admit that they are
vulnerable and don’t have all the answers. This characteristic has the added
benefit of allowing other people to be the expert in some circumstances. In
that way, strategic leaders make it easy for others to share ideas by
encouraging new ways of thinking and explicitly asking for advice.
Their thirst for learning also gives potential strategists the
space to be open to less obvious career opportunities — new industries,
different types of roles, lateral moves, stretch assignments, secondments, or
project roles — that may help them fulfill their potential.
At some point, you may advance to the point where you are not
concerned solely with your own role as a strategic leader, but with cultivating
opportunities for others. This will require a clear-eyed, reflective view of
the talent pool around you. It isn’t easy for any leader to accept that others
in the company may not have what it takes. Or, worse, to learn that the people
with the potential to demonstrate leadership feel constrained by current organizational
practices, and they are taking their talents elsewhere.
But if you can come to terms with reality, as uncomfortable as it
may be, then you’re in a position to help change it. By following the 10
principles we’ve outlined here, you will give yourself the skill and influence
to pave the way for others who follow. That’s fortunate, because the ability to
transform amid societal and business challenges and disruptions is essential to
your company’s success — and perhaps even to its survival.
by Jessica
Leitch, David
Lancefield, and Mark
Dawson
http://www.strategy-business.com/article/10-Principles-of-Strategic-Leadership?gko=25cec&utm_source=itw&utm_medium=20160526&utm_campaign=resp
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