Strategic Leaders-Challenges, Organizational Abilities & Individual Characteristics

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I’ve written before about the challenges of successfully executing strategy. In this post, I’ll clarify the difference between leadership and strategic leadership. I’ll also discuss what constitutes strategic leadership, a major controversy surrounding strategic leadership, five challenges of strategy execution, and nine factors of strategic leadership.

Strategic leadership is different from leadership. Whereas leadership refers to leaders at any level within an organization, strategic leadership talks about leaders at the top of the organization (Vera & Crossan, 2004). Another important distinction is that leadership studies focus on the micro levels (relationship between leaders and followers, trait and style of leaders, individualized leadership models, etc.), while strategic leadership focuses on the macro level of executive work (e.g., instead of looking at leader-follower relationship, the macro view looks at how the dominant coalition of the company influences the strategic process of the organization)(Vera & Crossan, 2004).

According to Yukl (2010), a major controversy surrounding strategic leadership research is the level of impact CEOs have on the effectiveness of their companies. Critics maintain that CEOs exert little influence due to limitations imposed on them by stakeholders, corporate culture, lack of resources, strong competitors, and unsympathetic economic conditions. These opponents assert that industry performance and economic conditions play an even greater role on a company’s effectiveness and success than CEOs.

There are FIVE challenges of strategy execution (Franken, Edwards, & Lambert, 2009):

1. Relentless pressure from shareholders for greater profits. This forces top business leaders to redefine their strategy more often.
2. Increased complexity of organizations. For example, the activities it requires to create products and services span various functional, organization, and even geographical boundaries.
3. Balancing demands of executing complex change programs with business performance. In particular, in cases where management is tied to rewards based on performance, it can be difficult to get buy-in into creating strategic plans for the future.
4. Low levels of involvement of managers at the beginning stages of strategic execution.
5. Difficulty securing the required resources to execute the strategy. As a result of the large number of concurrent change programs, many of the company’s resources will already be allocated and even if they are available, managers will aggressively compete for them.

Yukl (2010), however, insists that the research shows, despite these constraints, CEOs and top executives can still have “a moderately strong influence on the effectiveness of an organization” (p. 401).

Davies & Davies (2004) proposed 9 FACTORS of STRATEGIC LEADERSHIP. They include organizational and individual abilities.

Strategic leaders need to have FIVE organizational abilities:

1. Be strategically orientated – link long-range visions and concepts to daily work.
2. Translate strategy into action – identify projects that need to be undertaken to move the company from where it’s at to where it wants to go.
3. Align people and organizations – aligning individuals to a future company state or position.
4. Determine effective intervention points – knowing both what to do strategically and exactly when to intervene and change direction.
5. Develop strategic competencies – in the example of a school, rather than delivering curriculum innovation, it is the fundamental understanding of teaching and learning.

Strategic leaders need to have FOUR individual abilities:

1. Dissatisfaction or restlessness with the present – seeing where you want to be (vision), while dealing with your current reality; being able to envision the strategic leap that the organization wants to make.
2. Absorptive capacity – recognizing new information, analyze it, and applying it to new outcomes.
3. Adaptive capacity – ability to change and learn, having the cognitive flexibility linked to a mindset that welcomes and embraces change.
4. Leadership wisdom – taking the right action at the right time; coming up with ideas, deciding whether ideas are good or not, making ideas functional and convincing others of its value, balancing effects of ideas on yourself, others and institutions.

Steve Nguyen

References

Davies, B. J. & Davies, B. (2004). Strategic leadership. School Leadership & Management, 24(1), 29-38.

Franken, A., Edwards, C., & Lambert, R. (2009). Executing strategic change: Understanding the critical management elements that lead to success. California Management Review, 51(3), 49-72.

Vera, D. & Crossan, M. (2004). Strategic leadership and organizational learning. Academy of Management, 29(2), 222-240.

Yukl, G. (2010). Leadership in organizations (7th Ed.). Upper Saddle River, NJ: Prentice Hall.

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