Leading with Strategic Thinking by Aaron K. Olson & B. Keith Simerson
Read the summary below and get the key insights in just 10 minutes!
- What strategic thinking entails,
- What strengths mark the four different kinds of strategic leaders,
- How to establish strategic leadership and
- How your company can apply the “strategic thinking self-audit.”
Strategic Thinking
Strategic thinking involves evaluating situations, identifying patterns and generating important business decisions. Many people believe that only senior executives should engage in strategic thinking, but, in fact, everyone in an organization must apply strategic thinking to become more productive and efficient. Strategic thinking represents the nexus of three disciplines:
- “Cognitive psychology” – Learn to recognize your blind spots and deal with your biases.
- “Systems thinking” – Consider a broad range of factors as you plan your actions.
- “Game theory” – Understand the results of your actions as you consider how to minimize or avoid the negative effects of your opponents’ actions.
How Strategic Thinking Helped the US Coast Guard
Strategic thinking, strategic design and strategic program implementation require preparation and planning, as demonstrated by David M. Hammond, the former base operations program manager for the US Coast Guard (USCG), and Jack Dempsey, an innovative, young lieutenant commander.
As of 2001, the USCG owned or leased nearly 35 million square feet of buildings and office space. It operated more than 7,900 buildings and managed around 70,000 acres of land. Hammond sought a world-class management strategy to cover these shore facilities. He set out to leverage these resources, manage risk and minimize management costs.
Hammond recognized his blind spots and decided to upgrade his knowledge and understanding. He attended Syracuse University graduate courses in “research, engineering, management and planning.” He studied “strategy development, management and planning” at the National Defense University. He spent 10 years conceptualizing, creating and implementing his strategic plan. Dempsey assisted Hammond in refining his master plan and gained the respect of the “uniformed rank and file” over time.
Hammond’s and Dempsey’s preparation, planning and hard work resulted in better USCG decision making, improved use of assets, reduced risks and lower operating costs. They emphasized “external strategic results and outcomes rather than internal tactical output factors.” In recognition of their efforts, the Society of American Military Engineers’ gave both men the prestigious Oren Medal.
The Right Strategic Approach
To create a strategic plan, ask a series of questions to point your firm toward the right approaches:
- How has your firm approached strategy in the past? Did its strategy work? What were the problems?
- How do most organizations in your industry handle strategic matters? Has any “mainstream view” achieved benchmark strategic status in your field? Examine and evaluate such standards, since unquestioned standards can shut out alternative ideas.
- How can you develop insights based on your previous experience?
- What data are relevant to your strategy?
- What matters most to your stakeholders? What strategic approaches do they suggest?
The “Four Strategic Leadership Types”
Strategic leaders think deliberately, develop action plans and influence others to adopt their strategies. They achieve “buy-in, commitment and advocacy.” These four archetypes of strategic leaders differ, but the characteristics that distinguish them often overlap in practice:
1. “Visionary Leaders”
Visionary leaders are charismatic. Facebook founder Mark Zuckerberg and filmmaker George Lucas are examples of insightful and inspirational visionary leaders, as were Apple co-founder Steve Jobs and entertainment icon Walt Disney. They are known for their ability to decipher the future and foretell or drive change. Visionaries focus on the principles that guide their actions.
Visionary leaders excel at creative thinking, self-reliance and the ability to inspire. They carry out these leadership steps: 1) audit trends and develop ideas that can transform the status quo; 2) create insights about new, profitable opportunities; 3) develop innovative solutions that defy accepted wisdom; 4) iterate, evolve and adjust their vision according to new developments; and 5) recruit others who accept and promote their vision and demonstrate support for it.
2. “Directive Leaders”
Directive leaders resemble the traditional model of a CEO: confident, forceful, decisive, accomplished, powerful and controlling. Examples include GE’s Jack Welch, JPMorgan Chase CEO Jamie Dimon and IBM’s Lou Gerstner, as well as US football coaches Tom Landry and Vince Lombardi.
Directive leaders plan strategy and apportion resources. The people in their workforce respect them for reducing complex situations to basic, essential elements for decision making. These systems-oriented leaders regard their organizations as machines for delivering planned, productive outcomes.
Directive leaders excel at critical thinking, motivation, and planning and organizing. They are good at these leadership activities: 1) plan the direction of their organizations; 2) institute the necessary governance procedures; 3) motivate the teams and people they lead; 4) monitor organizational performance; and 5) modify or fine-tune existing procedures for maximum efficiency.
3. “Incubating Leaders”
Incubating leaders reach out to nurture and help others. For example, university deans and department heads serve as mentors and role models for faculty members regarding career advancement, attaining tenure, and so on. Other examples include film director Ron Howard and music producer Dr. Dre, both famous for helping artists in their fields grow and succeed. Incubating leaders are perceptive and encouraging. They focus on helping others build their careers, though critics note that incubating leaders sometimes fail to provide precise direction.
Incubating leaders excel at “evaluative thinking,” leveraging “diversity” and sponsoring other people’s success. They often: 1) build networks; 2) evaluate exploitable opportunities; 3) diversify their investments to optimize returns and minimize risks; 4) make assets available to assist others; and 5) develop “support ecosystems” to help people achieve maximum productivity.
4. Collaborative Leaders
Collaborative leaders are attuned to the times. They advocate reaching “integrated solutions” through cooperation and consensus building. Noted collaborative leaders include former NBA coach Phil Jackson, Harvard University rowing coach Harry Parker and Zappos CEO Tony Hsieh.
Collaborative leaders leverage partnerships to accomplish shared goals. They are authentic, engaging and trustworthy. They work well within team and political dynamics, and can function as a “coach, adviser, mediator, devil’s advocate or cheerleader.” The downside is that these leaders can be indecisive.
Collaborative leaders strive for win-win solutions. They prefer a “third way” to success that doesn’t segregate factions into winners and losers. They lead processes through participation. Such leaders are great at working with others. They know how to: 1) develop relationships with their colleagues; 2) listen to those around them; 3) target shared interests that benefit all; 4) divide power while keeping everyone accountable; and 5) trust their colleagues. Their success relies on using “synthetic thinking” to integrate new ideas, “active listening” and relationship management.
The “Four Leadership Styles”
Leaders follow four basic styles, according to Paul Hersey and Ken Blanchard’s “Situational Leadership” theory. The four elements of their model are:
- “Telling” – Use one-way communications to tell followers what to do and give them essential guidance.
- “Selling” – Engage in a two-way dialogue to offer “direction and support.”
- “Participating” – Let followers make decisions and act as independent agents. The leader audits their actions and provides support. This leadership style also relies on two-way dialogue.
- “Delegating” – Encourage followers to operate independently and initiate communication with the leader only if necessary.
Strategic Leadership Competencies
Strategic leadership requires three basic competencies:
- “Systems thinking” – Perceives the interdependencies and relationships that apply to complex systems and situations, including forecasting how planned and unplanned actions affect events.
- “Decision making” – Makes intelligent choices at the appropriate time.
- “Risk management” – Evaluates opportunities and enumerates risks.
Establishing Strategic Leadership
Strategic leaders develop their organizational capabilities by investigating whether their company has a strong coterie of leaders. Do these leaders have the skills and leadership style to mesh with the organizational strategy? The strategic leadership style your company needs depends on its “industry, market position or organizational culture.” To develop the future strategic leaders you will need, use a two-pronged approach:
- Determine where the organization creates value and where “strategy formation and strategy execution” occur. Do leaders follow a specific leadership mandate? Do future leaders have the skills they will need?
- Understand how strategic thinking enhances your firm’s capabilities. Consider how strategic leadership helps employees perform and how it defines superior performance.
“The Strategic Thinking Self-Audit”
Strategic thinking requires comprehensive planning and disciplined reflection. The strategic thinking self-audit helps you organize your thoughts to ensure that you include everything that matters. Smart questions are invaluable leadership tools, so question your planning. Bring unexamined issues to the fore, confront the status quo and examine relevant issues.
The most useful self-audit questions are:
How should you identify the best strategy? Have you objectively analyzed your experiences and thinking style? Could they negatively bias your insights? Have you considered all of the appropriate data and information and the patterns that these data reveal? Have you reviewed all available opportunities and alternate choices? Have you determined the trade-offs these alternatives will present?
Have you established a preferred strategy? Does it involve a story others will find compelling? Have you targeted the stakeholders my strategy will affect? Have you accounted for all the benefits stakeholders will realize from your strategy?
Do any deficits remain? Have you confirmed the shareholders’ shared interests? Have you planned what to do if some stakeholders try to cripple the strategic plan? Have you listed the steps necessary to implement the strategy? Have you considered how others can improve the strategy?[/text_block]
Aaron K. Olson is chief talent officer at Aon plc, a risk management and human resources firm. B. Keith Simerson helps organizations develop and execute enterprisewide strategies.
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