Leadership is what brings strategy alive

Few terms are more misquoted, misapplied and misunderstood than strategy, writes Roger Collins

In their efforts to attract attention, authors and marketers have labelled everything from a recipe book to accounting as “strategic”. The rise of strategy reflects our world: lower barriers to entry, disruptive technologies and business models, events such as the GFC, changing demographic power and the rising economies of developing countries. Strategy is essentially the means by which we can meet our objectives. The term was first established by the military, developed by corporate planners, economists and consultants, and reflected in models such as SWOT analyses, the Five Forces and the BCG Matrix. These origins in business reflect essentially a managerial approach leveraging logic, rationality and an analytical emphasis.

Five dimensions of strategy
Hambrick and Fredrickson present five fundamental dimensions of strategy that enable us to identify the respective contributions of both managers and leaders.

  1. In which geographies, markets and segments will we offer what products and services?
  2. How will we grow: organically through our existing or the development of new products and services, or through acquisitions, JVs or partnerships?
  3. How will we plan the unfolding of our growth in terms of sequence and speed?
  4. How will we differentiate ourselves to attract the customers/clients that we seek?
  5. What will be our economic/financial business model that satisfies our stakeholders?

Note that answers to these questions require both managerial and leadership contributions. So let’s focus on the role of leaders, as the unique contributions of this role can add insights which broaden the current dominant managerial perspective.

Shifts in strategy
Until recently, the primary emphasis on strategy has been in terms of its formulation, as though this was the most difficult step. In fact, there is strong evidence that successful organisations are better at implementation than formulation. This insight has not been missed by our major consulting firms which have recently developed stronger capabilities around execution. Too many consultants’ strategic documents clutter boardrooms; too few CEOs pay sufficient attention to making their strategy a reality.

Effective leaders understand how to communicate their strategy and mobilise their people’s commitment. Furthermore, if leaders can leverage their imagination and intuition – two contributions that are often overlooked by overly rational strategy formulation methodologies – these leaders are more likely to identify or create breakthrough and even disruptive options. The Blue Ocean methodology exemplifies this.

Furthermore, Henry Mintzberg makes an important distinction between planned and emergent strategy. Emergent strategy reflects the reality that the future is often uncertain; unforeseen opportunities arise; and corporate plans can be too rigid in their intentions. It is under these circumstances that proactive leaders may be better equipped to identify and seize these opportunities.

In summary, the world of strategy has for historical reasons been dominated by a managerial mindset. The rate of change in our markets, environment and workforces demands that we strengthen the contributions that senior executives can best make in their role as leaders. These contributions are known. The challenge is to bring these to life in your organisation.

How can leaders become more strategic?
As a leader, how can you add value by leveraging your people’s contributions?

  1. At the formulation stage you can involve recent hires in the process. Remember – fish are the last to discover water! Recent members bring knowledge of competitors and the market, and fresh and often insightful perspectives to their new organisation. To these people, add those who have direct contact with clients, customers, suppliers and competitors. These people are often more in touch with reality than your senior executives in head office.
  2. Create inclusive processes that enable these people to speak frankly without fear of retribution or criticism by the people who may have been more responsible for your past and present than in touch with your future.
  3. Ask your next gen leaders to act as competitors to challenge your strategy and attempt to disrupt it. We can never assume that our competitors will not respond to our organisation’s new initiatives. In addition, the involvement of your high potentials signals to them that they can shape their future, and it exposes their potential to your senior executives.
  4. In relation to implementing your strategy, you can evaluate whether your organisation’s current capabilities are sufficient to enable your emergent strategy. The development of qualitatively new capabilities often requires long lead times and the hiring or development of new people and development of new competencies, systems and processes.
  5. Finally, if successful implementation is the more difficult and vulnerable step, how will your leaders engage and mobilise your people? Strategy documents won’t achieve this outcome. People need to see how their role and contribution is part of the strategy. They also need to think that the strategy is feasible and brings them benefits beyond those that accrue to shareholders.