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Leaders as strategic thinkers
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Strategic thinking! Ever heard of it in the organizational context? Oh yes! something often quoted but not really practical - an abstract thing.
And what about strategic planning! Yes, it is something important and often guided by leadership in the organization.
Every organization has strategic planners, who derive a "meaningful interpretation" of the evolving trends in the marketplace and develop various possibilities for the organization. Leaders in the organization facilitate the process of strategic planning by forming teams to develop plans, approving the plans, spending time for performance review and so on.
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But is it sufficient? Is the leadership role limited to facilitating the process of strategic planning in an organization?
The answer to the above questions is a plain and firm NO. Real leadership role emerges from digging a bit deeper. "Meaningful interpretation" comes from keen examination and analysis of environmental changes against specific ideas. These are the ideas that define an organization’s existence and shape its future. These are leaders' ideas of the business which guide strategies, processes, resources and performance at marketplace.
Differentiation starts with leaders' thinking
This brings us to the core of the discussion - with out any second opinion, leaders are source of great business ideas. It is leadership ideas that differentiate one firm from the other in how the firm interprets the strategic challenges, how it responds to the critical success factors in the industry, how it prepares for sighted risks and opportunities, how it responds to the current and future expectations of its stakeholders and builds a sustainable business model for the firm to create increasing value for its stakeholders. This is the aspect that sets apart two firms competting for the same pie of the market. All other visible differentiators like technology, product features, partnerships, image in the marketplace and other such factors are an offshoot of leaders' ideas of the business. Differentiation starts with leaders' idea. And it all depends on the ability of leaders to think strategically.
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Leaders and strategic thinking
As John Adair says strategic thinking is about thinking centred on end and means. Strategically thinking leaders not only develop a definitive view point of the future, they also shape the culture – defining the behaviours necessary to pursue the path.
Formulating strategic vision and defining core values is certainly the manifestation of strategic thinking. Strategic planning is not strategic thinking. Strategic planning is following up on strategic thinking. Clarity in thinking leads to great strategic plans.
Undoubtedly, imagination of strategic thinkers has no bounds. Yet strategic thinking is not about wild dreams. Leaders who think strategically have judicious mix of creative and critical thinking. Creative thinking helps such leaders develop new ideas and critical thinking helps them judge these ideas on their worth. Creative thinking is about new ideas and critical thinking is about picking up practical ideas, together they make leaders, strategic thinkers.
Developing the ability of strategic thinking
Strategic thinking can not be taught but it can be learnt through observation and practice. How do leaders develop this ability of thinking strategically? Leaders should develop clear insights on markets, customers and technology. They should constantly reflect on their experience and seek new information on emerging realities to develop a significant point of view of future. Leaders who are strategic thinkers transcend the boundaries – beyond current markets, customers and technologies. Those who are endowed with the faculty of strategic thinking - either naturally or adopted through observation and practice - exhibit some distinct traits quite emphatically. A study of these behaviours will definitely help us in focusing our observation to these traits in others and improve our own. The basis tenets that characterize strategic thinking are:
- Flexibility
- Cognition
- Anticipation
- Learning
- Clarity
Flexibility
Flexibility is an essential feature of leaders who think strategically. Flexibility is not about changing the goals, it is about abandoning fixed ideas, it is about thinking of array of possible solutions, never thought of before and all the while retaining constancy of purpose. Flexible leaders test the strength of their ideas with the insights of their peers in order to refine their point of view. This happens when leaders are willing to look at problems from all possible angles and question inherent assumptions. Flexibility allows leaders to redefine complex problems, which provides insights into more feasible solutions. Jack Welch encouraging his managers to challenge his ideas at Crotonville, while he was CEO at GE, is an example of a confident leader with a flexible attitude.
Cognition
Cognition is yet another feature of strategic thinkers. This means that a leader must develop business wisdom by acquiring knowledge through perception, reasoning and intuition. An example that can be cited here is that of Lou Gestner, the turnaround CEO of IBM. He quickly developed understanding of the business through planned interactions with customers, competitors and employees. Thus building upon his own perceptions of IBM as a supplier for his previous company.
Anticipation
Anticipation gives strategic leaders to proactively manage change before they are forced to change. One such example that comes to the mind is that of leadership at Tata Steel in India which managed a successful change in technology portfolio backed up by a highly successful right sizing exercise to enhance its competitiveness to such an extent that during the downturn in steel industry during middle and late 1990s, Tata Steel was the only steel company in the world which was profitable.
Learning
Learnering is a characteristic feature of leaders who are strategic thinkers. They not only learn from their own experience, they also have the ability to draw analogy from others experience. A classic case often cited in this context is of Andrew Grove of Intel, who taking cue from steel industry, where established steel companies allowed mini mills in the low end segment of rebars, but with time mini mills made their way into high end segments as well, insisted that if Intel leaves the cheap PC market uncontested it may lose the high end subsequently. As a consequence, Intel promoted its Celeron processors more aggressively in the low end segment.
Clarity
Clarity in leader’s thinking leads to clear strategic plans. Actions that would follow the idea and plans is so clearly etched out in strategic thinkers' mind that he creates ownership of his ideas in key persons responsible for imlementation. The leader does so by guiding their thought processes, whereby he ensures that his ideas of implementation are mouthed by the very people who will be implementing them. This is very crucial for a leader to give life to his ideas.
In other words, measure for a leader’s strategic thinking is whether or not it influences the way people think about what is possible, desirable and necessary.
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