What is Strategic Leadership?
Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary.
Multifunctional in nature, strategic leadership involves managing through others, managing an entire organization rather than a functional subunit, and coping with change that continues to increase in the global economy.
Strategic leaders must learn how to effectively influence human behavior, often in uncertain environments.
By word or by personal example, and through their ability to envision the future, effective strategic leaders meaningfully influence the behaviors, thoughts, and feelings of those with whom they work.
The work of strategic leaders is demanding, challenging, and requires balancing short-term performance outcomes with long-term performance goals. Regardless of how long (or short) they remain in their positions, strategic leaders (and most prominently CEOs) affect a firm’s performance.
Leading in Strategy Implementation
Strategies cannot be formulated and implemented for the purpose of achieving above-average returns without effective strategic leadership.
Strategy implementation involves leadership through coaching people to use their abilities and skills most effectively and efficiently to achieve organizational objectives.
Without direction, people tend to do their work accordingly to their personal view of what tasks should be done, how, and in what order. They may generally approach their work as they have in the past or emphasize those tasks that they most enjoy, regardless of the corporation’s priorities.
This direction may take the form of management leadership, communicated norms of behavior from the corporate culture, adjusted procedures to provide motivation to employees, or agreements among works in autonomous workgroups. It may also be accomplished more formally through action planning or through programs, such as Management by Objectives and Total Quality Management.
Effective strategic leadership is the foundation for successfully using the strategic management process.
Strategic leaders guide the firm in ways that result in forming a vision and mission. Often, this guidance involves leaders creating goals that stretch everyone in the organization as a foundation for enhancing firm performance. A positive outcome of stretch goals is their ability to provoke breakthrough thinking, which often leads to innovation.
Additionally, strategic leaders work with others to verify that the analysis and strategy parts of the A-S-P model are completed effectively in order to increase the likelihood the firm will achieve strategic competitiveness and earn above-average returns.
Who is Responsible for Strategic Leadership?
The primary responsibility for strategic leadership rests at the top, in particular with the CEO.
Other commonly recognized strategic leaders include members of the board of directors, the top management team, and divisional general managers.
In truth, any individual with responsibility for the performance of human capital and/or a part of the firm is a strategic leader. Regardless of their title and organizational function, strategic leaders have substantial decision-making responsibilities that cannot be delegated.
Skills of Strategic Leaders
The ability to attract and then manage human capital may be the most critical of the strategic leader’s skills.
This is especially true because of the lack of talented human capital constraints firm growth. In today’s firms, the intellectual capital that the firm’s human capital possesses, including the ability to manage knowledge and produce innovations, affects a strategic leader’s success.
Strategic leaders also need to have the skill of creating and then supporting the context or environment through which stakeholders can perform at peak efficiency.
Being able to demonstrate the skills of attracting and managing human capital and establishing and nurturing an appropriate context for that capital to flourish is important, especially given that the crux of strategic leadership is the ability to manage the firm’s operations effectively and sustain high performance over time.
Transformational Leadership
The style of leadership used by those in top management positions is important. Likely, the leader’s style will be based, at least partially, on his or her personal ideology and experience.
Transformational leadership is considered to be one of the most effective strategic leadership styles.
This style entails motivating followers to exceed the expectations others have of them, to continuously enrich their capabilities, and to place the interests of the organization above their own.
Transformational leaders develop and communicate a vision for the organization and formulate a strategy to achieve that vision. They make followers aware of the need to achieve valued organizational outcomes and encourage them to continuously strive for higher levels of achievement.
Transformational leaders have a high degree of integrity, character, and emotional intelligence. Emotionally intelligent leaders understand themselves well, have strong motivation, are empathetic with others, and have effective interpersonal skills. As a result of these characteristics, transformational leaders are especially effective in promoting and nurturing innovation in firms.
Resources
Further Reading
- How to Implement Strategic Leadership in Your Business (hashmicro.com)
- How to Implement Strategic Leadership in Your Organization (business2community.com)
- Of leadership and strategic implementation (peoplemattersglobal.com)
Related Concepts
References
- Hitt, M. A., Ireland, D. R., & Hoskisson, R. E. (2016). Strategic Management: Concepts: Competitiveness and Globalization (12th ed.). Cengage Learning.
- Hitt, M. A., Ireland, D. R., & Hoskisson, R. E. (2019). Strategic Management: Concepts and Cases: Competitiveness and Globalization (MindTap Course List) (13th ed.). Cengage Learning.
- Hill, C. W. L., & Jones, G. R. (2011). Essentials of Strategic Management (Available Titles CourseMate) (3rd ed.). Cengage Learning.