In 2013, Management Research Group (MRG) completed a large scale global study addressing this question, reports HBR. We evaluated the leadership practices and effectiveness of 60,000 managers and executives in 140+ countries and 26 industries. Each participant was assessed with the Leadership Effectiveness Analysis (LEA), a 360-degree assessment tool measuring 22 leadership practices and more than 20 measures of effectiveness. Leadership included such practices as innovation, persuasion, communication, and results orientation, while measures of effectiveness included such characteristics as future potential, credibility, business aptitude, and people skills.
They found that a strategic approach to leadership was, on average, 10 times more important to the perception of effectiveness than other behaviours studied. It was twice as important as communication (the second most important behaviour) and almost 50 times more important than hands-on tactical behaviours. (This doesn’t mean that tactical behaviors aren’t important, but they don’t differentiate the highly effective leaders from everyone else.)
Strategic leaders take a broad, long-range approach to problem-solving and decision-making that involves objective analysis, thinking ahead, and planning. That means being able to think in multiple time frames, identifying what they are trying to accomplish over time and what has to happen now, in six months, in a year, in three years, to get there. It also means thinking systemically. That is, identifying the impact of their decisions on various segments of the organisation—including internal departments, personnel, suppliers and customers.
So how can organisations develop strategic leaders?
It’s not an easy task. Strategic thinking is a difficult leadership skill to acquire because it is as much a mindset as a set of techniques. What’s more, in the workplace tactical responses to immediate demands are often rewarded over long term vision and planning. That said, it’s not impossible to instill strategic thinking skills in managers. Here are some ways you can foster strategic thinking as part of your management approach:
Encourage managers to set a regular time aside for strategic planning (alone and in meeting with others). A strategic approach takes time. Make it a regular part of their job.
Provide information to your leaders on the market, the industry, customers, competitors and new technologies that influence your business. One of the key prerequisites of strategic leadership is having relevant and broad business information that helps leaders elevate their thinking beyond the day-to-day.
Keep people informed on what is happening internally. Effective strategy requires information shared across boundaries; cross-functional teams can work on strategic organisational issues, and the results of their thinking and efforts should be published and shared throughout the organisation.
Connect managers with a mentor. One of the most effective ways to develop your strategic skills is to be mentored by someone who is highly strategic. The ideal mentor is someone who is widely known for his/her ability to keep people focused on strategic objectives and the impact of their actions.
Communicate a well-articulated philosophy, mission and goal statement throughout the organisation. Individuals and groups need to understand the broader organisational strategy in order to stay focused and incorporate it into their own plans and strategies.
Reward people for evidence of thinking, not just reacting; wherever possible, organisational culture should encourage anticipating opportunities and avoiding problems, and discourage crisis management. For example, managers are rewarded for being able to quickly generate several solutions to a given problem and identifying the solution with the greatest long-term benefit for the organisation.
Promote a future perspective for employees by incorporating it into training and development programs; teach people what strategic thinking is and encourage them to ask “why” and “when” questions. When a manager suggests course of action, their boss can ask them to consider what underlying strategic goal this action serves, and what the impact will be on internal and external stakeholders. Consistently asking these two questions whenever action is considered will go a long way towards developing strategic leaders.
Developing a strategic approach is not easy, but the result often makes the difference between an average and an exceptional leader.
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