Strategic Leadership is an acquired skill. It does not come naturally. Therefore, educating yourself about its various aspects will help you become a better leader. Show
Well-implemented strategic decisions and strategic leadership are essential assets to an organization. It helps with long-term success. Is your company successful but not quite at the next level? If this is the case, your company has a critical need for strategic leadership. You must have heard that you need to be more strategic if you want to move up into a senior leadership role in your organization. Thus, if you want to improve your decision-making skills and become an effective strategic leader, this article is for you. It will show you the basics of being a great strategic leader. Meanwhile, towards the end of this article, I'll share my favorite books on strategic leadership. So, gear up, and let's get started. Chapter 1: Strategic Leadership in an OrganizationWhat is Strategic Leadership?Strategic leadership is the core ability to articulate a company's strategic vision and motivate people to pursue that goal.
According to Hoskisson et al. (2004), Strategic Leadership is: “The managerial ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary”. Strategic leaders hold the power of influencing people to look at the bigger picture and work towards long-term goals. It gives companies the much-needed advantage over competitors. Exercising a strategic leadership style creates flexibility. It also creates competitive advantages through:
Importance of Strategic Leadership
Role of a Strategic LeaderStrategic leaders use their expertise to design new growth strategies. These leaders need a high level of commitment and work involvement. The various roles of a strategic leader in an organization includes- 1. Decision Making: Effective leaders are great at making decisions through calculated risks. They can see the intricacies of a situation and find the best possible solution for it. They can adopt marketplace changes and take advantage of new opportunities. 2. People skills: They are great at managing people. They can converse effectively, which makes things more clear and also motivates others. 3. Driving force: These leaders have a driving personality. They can motivate others, keep them on task, and pay attention to the end goal. 4. Goal setting: A strategic leader surveys the current trends, looking for growth opportunities. Once they spot where the company needs to go, they set goals to position the company to achieve that growth. 5. Exploiting and maintaining core competencies: The resources and capabilities build competitive advantage. These are the core competencies of an organization. The senior management ensures these competencies are a part of its competitive strategy. They also ensure that it is being maintained, invested in, and developed over time. 6. Developing human capital: Employees are a capital resource that requires investment. People are the only sustainable source of competitive advantage. Hence, support is necessary from leaders to ensure employees are adequately trained. 7. Sustaining an influential organizational culture: Organizational or company culture is a part of competitive advantage. It helps to develop and execute strategies in an organization. Corporate culture regulates employees’ actions and attitudes. 8. Emphasizing ethical practices: Strong moral foundations improve the effectiveness of strategies. In the absence of an ethical culture, staff and management may act opportunistically. They might take advantage of their positions to benefit themselves. Hence, it is a leader's responsibility to set an example by making decisions ethically. 9. Establishing balanced organizational control: Organizational controls ease corrective adjustments while implementing strategies. Rules help to determine when and what adjustments to make. 10. Determining strategic direction: Organization’s top management teams develop clear visions. They ensure organizational success. They need to “paint a picture” of where the organization will be in 5-10 years. The vision works as a target to motivate employees. 25 Characteristics/ Qualities/ Traits/ skills of an effective strategic leader1. Reliable: Strategic leaders are trustworthy. They strategically think about everything before acting upon it. Hence, eliminating chances of risk. 2. Consistent: Consistency is the key to success. Strategic leaders understand the importance of being consistent. They influence others to do the same. 3. Self-awareness: They understand how their mood and actions can affect those around them. Hence, they are self-aware. 4. Self-control: These leaders have incredible control over themselves. They can control their emotions and moods, which might affect people around them. 5. Social skills: Strategic leadership qualities include excellent social skills. These skills enable these leaders to bond with their team more effectively. 6. Motivational: It is not about power and money for these leaders. They invest in the success of their teams and organization. 7. Compassionate: Emotional intelligence is most important when it comes to influential leaders. Hence, strategic leaders are always understanding and empathetic. 8. Broad perspective: Strategic leaders do not fixate on one way of thinking. They plan things by considering every possible angle. 9. Wise use of power: These leaders don’t force power on their team. They use power wisely to get the most out of their teams. 10. Upskilling: These leaders are always up to date with the latest news. They develop themselves to match the current trends. 11. Loyal and honest: Strategic leaders are reliable, loyal, and honest. 12. Open-minded: They have problem-solving skills and are open to new ideas. They approach each problem from various views and perspectives. 13. Fair: Strategic leaders don’t force power to get to an agreement. They instead use their power judiciously and wisely. 14. Strategic Thinkers: Strategic leaders think before acting or speaking. 15. Delegates: They know how to delegate tasks so that no team member feels overloaded. It also helps to assign challenging tasks that motivate them. 16. Strong Communicators: Without a doubt, all influential strategic leaders are great communicators. Having a solid vision won’t help if it is not clearly conveyed to the team. 17. Good listening skills: Great leaders have the ability to put forward their points clearly. These are essential characteristics of great leaders. 18. Positive attitude: Positive environment makes employees happy and cheerful. Employees work harder, thus boosting productivity. 19. Innovative: These leaders are open to change and innovation. Innovation lets organizations achieve a competitive advantage. 20. Collaborative: This leadership requires a collaborative approach that creates transparency. Collaboration builds trust and support among team members. 21. Diplomatic: Diplomatic approach helps strategic leaders manage conflicts using negotiations and sensitivity. 22. Empathetic: Empathy fosters a strong bond between a leader and the team. A leader must grasp an employee's point of view by putting themselves in their shoes. 23. Humility: Humble leaders admit mistakes and apologize for them. Employees benefit from a more human and relatable workplace when their leader is genuine. 24. Passionate: Enthusiastic approach gets employees excited to achieve better. 25. Committed: Commitment helps to stay focused, which enables these leaders to achieve success. 6 components of strategic leadershipAccording to Ireland & Hitt’s, there are six components to leadership strategy:
Guiding principles of strategic leadership SkillStrategic leadership principles work as the baseline for leaders. It encourages leaders to aim towards company success and identify the scope of growth. The principles can be grouped into three segments. Each group has a specific set of principles. Group 1: Systems and Structures- It involves approaches to decision-making, innovation, and transparency.
Group 2: People, Policies, and Practices- It involves unconventional ways of thinking about hiring, training, and assessments.
Group 3: Self Improvement- It involves the development of the potential strategic leader themselves.
Who are the strategic leaders?1. CEO’s The CEO of an organization defines the mission, vision, goals and objectives of an organization. They take responsibility for overall organizational structure and performance. The CEO transmits the vision to the Top Management Teams of the organization. All Strategic Decisions that are made support this vision. According to Mintzberg’s 10 Managerial Role, the roles and responsibilities of a CEO are categorized into three conceptions.
The CEO is the bonding link between the internal activities and the external environment of an organization. 2. Top Management teams (TMT) The CEO, along with a small group of executives at the upper level in an organization, comprises the TMT. They plan, install and test various stages of the whole decision-making process. The roles and responsibilities of a TMT are conceptualized into three elements.
3. Board of Directors The Board of Directors are an elite group that consists of dependent and independent members. They review, approve, and evaluate organizational performance. Like TMT, They also have three conceptual elements.
The composition is the same as TMT. The structure includes the size of the board, duality, and board committees. Difference between leadership and strategic leadership
How do you develop strategic thinking?Every business wants strategic thinkers. It is not just for senior executives but for all leadership levels of an organization. Adopting a strategic mindset will help you increase profit, delight customers, and retain talent. It helps answer “what,” “how,” “why,” and “when.” In short, it increases your odds of success. The ability to think strategically is vital in deciding who is a leader and who is a follower. The Harvard Business Review describes strategic thinking as “Strategic people create connections between ideas, plans, and people that others fail to see.” If you are looking to develop your strategic thinking skills, Here are nine ways you can do that: 1. Embrace the future: It is vital to understand trends, context, and business drivers. Make decisions that support future goals and are beneficial in the long run. 2. Understand trends through observation: Do a routine exercise in your day-to-day work. In this exercise, explore and synthesize the internal trends of your organization. Connect with industry peers and leaders to understand the marketplace. 3. Broaden perspective through tough questions: Always ask yourself questions from different angles. Ask about how each outcome would support the organization’s broader goals. 4. Add structure to your written and verbal communication: Adding structure is essential. Systems are possibly achieved through prioritizing and sequencing of thoughts. It helps to focus on the core message. 5. Embrace debate and invite challenges: With the help of diverse peers, you can challenge your own thinking. Remember not to get personal. Try to focus on issues and not people. It will enable you to develop better long-term decision-making skills as well as empathy. 6. Improve listening skills: It is crucial for you to accept that every decision has flaws. Hence, to overcome them, take opinions from your co-workers and employees. It will help build perspectives that will teach you new ways of doing things. 7. Understand consequences: Every decision you make will have consequences. Hence, it is vital that you objectively analyze all the risks involved. Consider all pros and cons, listen to peers, and understand the impact. 8. Change approach according to situations: Keep learning through various problems. Strategic decisions should be adaptive in nature. The process of thinking should change according to the scenario. 9. Make logical and unbiased decisions: Biases sometimes can be involuntary. It is crucial that you keep asking yourself whether your decisions were rational in the past. Admit your flaws and start working on them. Check out Rick Horwarth's keynote speech on strategic thinking. He is The New York Times, Wall Street Journal and USA Today bestselling author on Strategy. He is also the CEO of Strategic Thinking Institute. Chapter 2: Strategic Decision Making in an organizationWhat is Strategic Decision Making?Identifying alternative solutions for different challenges is what strategic decision-making is all about. It is about determining significance, priority, and preferred strategic responses. Strategic decisions involve ethical clarity and a high degree of uncertainty. Strategic decision-making is influenced by the following factors -
Strategic Decision making process - Step by StepMany models help strategic leaders make better decisions through strategic planning. In most organizations, the decision-making team involves all the senior leaders. These decision makers are involved with Strategic issue diagnosis. Strategic issue diagnosis helps to define and prioritize threats and opportunities. It diagnoses the internal and external environment. Strategic issue diagnosis also helps to formulate a Strategic Position Statement or SPS. According to Pitt and Koufopoulos, SPS helps define the key issues that presently exist and those that may arise in an organization’s future. Nine steps produce the SPS. STEP 1: Scanning the external environment for raw issues. STEP 2: Scanning the internal environment for raw issues. STEP 3: Merging information for external stakeholders. STEP 4: Merging information for internal stakeholders. STEP 5: Strategic external issue diagnosis. STEP 6: Strategic internal issue diagnosis. STEP 7: Determination of critical threats and opportunities. STEP 8: Determination of critical strengths and weaknesses. STEP 9: Combining a Strategic Position Statement After the SPS formation, the Strategic formulation phase takes place. Managers are involved in issue diagnosis, generation, and evaluation of alternatives. They make the final strategic choices. The strategic leaders then implement the final strategic choice.
Common types/ examples of Strategic Decisions1. Mergers: A merger is an external business growth strategy that occurs in two ways-
Businesses merge to achieve economies of scale and access scarce resources. They also merge to enter new lines of business. 2. Market investment: Companies use several strategies to expand their market share. Few examples of market investment strategy include-
3. Business growth strategies: They are of two types-
4. Expansions: Organizations, when they attempt to achieve high growth, adopt this strategy. Expansion strategies are adopted through five ways -
5. Joint venture: Joint ventures is a business growth strategy. Here two or more companies together establish a new business enterprise. It allows companies to exploit business opportunities. It will enable small businesses to secure resources and share the risk of entering a new market. Characteristics of strategic decisions
Top 5 best strategic leadership booksRead below the list of Strategic leadership books that we at Vantage Circle absolutely love -
Chapter 3: Real Life Examples of Strategic Leaders1. Elon Musk: Elon Musk was born on June 28, 1971, in Pretoria, South Africa. He is a South African-born American entrepreneur who co-founded the electronic payment firm, PayPal. He also formed SpaceX, an aerospace manufacturer. He is one of the first significant investors and chief executive officer of the electric car manufacturer Tesla. 2. Steve Jobs: Steve Jobs, in full Steven Paul Jobs was born on February 24, 1955, in San Francisco, California. He died on October 5, 2011, in Palo Alto, California. He was the co-founder of Apple Computer, Inc now known as Apple Inc. He was a charismatic pioneer of the personal computer era. 3. Mark Zuckerberg: Mark Zuckerberg, in full Mark Elliot Zuckerberg was born on May 14, 1984, in White Plains, New York. He is an American computer programmer who co-founded Facebook, a social networking Website. He is also the CEO of Facebook. Final Take AwayThe business world is changing at a rapid pace. Technology, globalization, and rising competition have reshaped the business environment. It isn’t easy to function and succeed in such complex and dynamic environments. Organizations need experienced people with well-developed leadership abilities. That's where the role of strategic leadership comes in. Strategic leadership is of utmost importance to all organizations in such environments. Strategic leadership and strategic decision-making can lead to long-term organizational success. CEOs, TMT’s, Board members, and other senior management take strategic decisions. Hence, the senior managers and the top management teams are vital strategic resources. The decisions of the CEO and senior management impact the development. It also affects the implementation of strategies. The CEO and the senior management set the strategic direction of the organization. They utilize the organization’s core competencies. Influential strategic leaders can make a competitive difference. The role of a strategic leader includes developing human capital. Employees are the only sustainable resource of competitive advantage which requires investment. Hence, it is important for strategic leaders to ensure they are adequately trained. Surveys essentially let you uncover the root problems before they become serious company concerns. Hence, understanding the "pulse" of the organization is what a good employee survey should aim to accomplish. Vantage Pulse is designed to help organizations collect, measure, and track various engagement metrics. Vantage Pulse will help you get intelligent actionable insights. Uncovering small and big issues of the company helps you in creating a fulfilling employee experience. Vantage Pulse promises to offer you the most cost-effective and efficient solution to measure engagement among employees.
This article is written by Tanya Ahmed, a Digital Marketer of Vantage Circle, a cloud-based employee engagement platform. She is a leadership enthusiast with a post-graduate MBA in Leadership from Queen Mary University of London. Her experiences range from various fields, including Customer relationships, Content Creating, Sales & Marketing. For any related queries, contact . Which of the following best describes the effects of leadership neutralizers in an organization?Which of the following best describes the effects of leadership neutralizers in an organization? They tend to make leader behavior ineffective.
What is strategic leadership quizlet?Strategic Leadership. - Ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary. - Behaviors and styles of executives that influence others to achieve the organization's vision and mission.
Which of the following describes the concept of leadership?Which of the following describes the concept of leadership? d. the process and behaviors used by someone to establish the organizational structure of a firm. Whereas managers focus on plans, results, and goals, what do leaders focus on?
Which is the most accurate statement regarding one of the main differences between the Japanese and American cultures quizlet?Which is the most accurate statement regarding one of the main differences between the Japanese and American cultures? Overall, Japanese culture is often characterized as collectivist, whereas American culture is often characterized as individualist.
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