Change has become so fast and so pervasive that it has an impact on virtually every organization everywhere, and everyone in them. In a world of increasing volatility, uncertainty, complexity, and ambiguity, today’s strategic leaders must be able think, act, and influence in that environment. They must create a climate that fosters the capabilities needed to be honest and real with each other, make difficult choices even in the face of politics and conflict, attend to the human element of the system and not just the mechanical element, and foster learning along the way.
Our experience working with and studying organizations around the world suggests that superior-performing organizations tend to practice strategic leadership as an iterative, ongoing learning process. As organizational leaders become increasingly competent at scanning the horizon for future opportunity, they need to translate that vision of where to go into coherent organizational strategies. And the more those strategies unleash human potential and adapt to external change and internal conditions, they more likely they are to reap the full performance potential of the organization.
The best way for organizations to thrive in the face of this new reality is to become continual learning engines. In practical terms, that means that organizational strategy—the vision, the directions, and the tactics adopted to move toward success—ought to be held in an ongoing state of formulation, implementation, reassessment, and revision.
What kind of leadership is needed to transform organizations into continual learning engines that maximize performance potential? It is the kind that makes decisions and takes action not just to boost the organization’s current performance but also to strengthen the organization’s future effectiveness and competitiveness. It’s not the kind of leadership that can be explained and practiced with a simple set of procedures, such as strategic planning, and managing change, for example (although those are critical activities). Instead, strategic leaders propel their organizations through successive iterations of a learning process with strategic thinking, strategic acting, and strategic influencing skills. These skills are needed in every element of the learning process, and leaders at every level in the organization can practice them. These skills create the fuel to drive the organization’s learning process and link it to the organization’s evolving strategic intent for creating and sustaining competitive advantage. Taken together, they constitute strategic leadership.
What Is Strategic Leadership?
Individuals and teams enact strategic leadership when they create the direction, alignment, and commitment needed to achieve the enduring performance potential of the organization.
This statement is a real mouthful. But because it encompasses all of the critical elements of strategic leadership, we offer it as our definition. The focus of strategic leadership is the enduring performance potential of the organization—achieving the potential of the organization over time so it will thrive in the long term. This is true whether the organization is for profit or nonprofit, governmental or nongovernmental. It depends only on whether your organization seeks and achieves enduring capabilities that provide distinctive value to stakeholders over the long term in whatever sector your organization operates or whatever bottom line you are measured by.
The key to leadership that is strategic in nature is the context within which that leadership is occurring: It must have strategic implications for the organization. Specifically,
- Strategic leadership is broad in scope.
- The impact of strategic leadership is felt over long periods of time.
- Strategic leadership often involves significant organizational change.
What Do Strategic Leaders Do?
Strategic leaders craft business and leadership strategies that go hand-in-hand. They bring together the science of strategy formulation with the art of engaging people throughout the organization. They create a high-performance culture where both individuals and the greater organization thrive over time.
Too often, leaders assume that once they have the direction figured out, everyone should just align with it. While they may not say it exactly, the fact that human emotions, needs, beliefs, and desires are part of the change equation is often frustrating for those in leadership roles. Why can’t they just follow? Why can’t we all agree this is the best way to go? Why can’t you get them to do what is needed? This frustration and the underlying assumption that human emotion is neither helpful nor needed are related to the fact that 75 percent of change efforts fail to reach their potential. Organizations are full of human beings, and while we might wish that these humans wouldn’t bring belief and emotion to the workplace, indeed, they do.
In our experience, too little attention is paid to the human element of strategy: What must happen to ignite the new connections within the organization needed to enact the business strategy? Organizations must be as intentional about leadership strategy as they are about business strategy. Leadership strategy describes the organizational and human capabilities needed to enact the business strategy effectively. What type of culture should an organization engender to create success? What perspectives and abilities must individual leaders and teams have to be successful? What will they do to develop these skills and perspectives?
In the words of Walter Bayly, CEO of Banco de Credito and chief operating officer of Credicorp Group:
“Let’s be clear—we invest in developing our leaders in order to meet our business goals. Our leaders drive our business performance, and so we must understand what drives our leadership capability. It is about finding a fit. I have learned in business that if it doesn’t feel right, it isn’t right. And our leaders must create the right performance-culture mix for our people to thrive. What are those elements of culture? That is for our leaders to discover.”
Excerpt from The Center for Creative Leadership (CCL)’s new book, “Becoming a Strategic Leader: Your Role in Your Organization’s Enduring Success,” 2nd Edition, by CCL experts Richard L. Hughes, Katherine Colarelli Beatty, and David L. Dinwoodie. The book explores the intersection where business and leadership strategy meet and gives applicable tools for developing the strategic thinking, acting, and influencing skills necessary to create high-performing organizations.
Richard L. Hughes served as transformation chair and academic department head at the U.S. Air Force Academy. He is a former faculty member at the Center for Creative Leadership.
Katherine Colarelli Beatty is managing director of the Center for Creative Leadership’s Colorado Springs campus. She has developed strategic leadership capabilities for individual, team, and organizational clients globally.
David L. Dinwoodie is regional director for Latin America at the Center for Creative Leadership and previously served as general manager for EADA Business School in Barcelona, Spain.