In our September 2006 newsletter, we described WJM Associates’ Leadership Point-of-View by highlighting seven characteristics of effective leadership. To see the full article, as well as best practices for developing effective leaders within an organization, please click here.
The next several issues of the WJManagement Advisor will each include an article focusing on one of these characteristics. In this issue we address the third of these seven: Strategic Acumen.
It is tempting to assume that strategic acumen is principally derived from analytical skills and industry insight. Developing a strategy that will lead to a sustainable competitive advantage often requires, however, a broader set of leadership competencies. Interpersonal skills are equally if not more vital since they enable a leader to tap into the knowledge and experience of two important groups of people: her strategic network and her top team. A strategic network, as distinct from an operational network, is oriented externally and toward the future and is therefore vital if a manager is to achieve a high degree of awareness of industry dynamics and international trends. A leader’s top team, possibly supplemented with another internal council with a specific remit for strategy, has the potential to be a forum for genuine debate that can help a leader to flesh out a strategy, to avoid succumbing to blind spots or over-optimism and to stress-test important strategic initiatives before they are implemented.
Strategic networking was identified as one of the most difficult developmental challenges aspiring leaders must address in a recent study of 30 managers making a transition to a larger leadership role . This is particularly the case for managers who have risen through the ranks by dint of their technical skills and operational results and who may not immediately grasp that addressing strategic issues facing the overall business will involve relational rather than analytical tasks. Building, maintaining and leveraging a strategic network of internal (including board level) and external contacts and advisers is one of the most important steps a leader must take to develop strategic acumen. Leaders with access to a solid strategic network are much better placed to determine future priorities and challenges and obtain approval from key stakeholders for strategic initiatives.
In the last WJM newsletter Tim Morin introduced a process for decision-making in his discussion of the leadership characteristic of decisiveness. Key elements described by Tim include: gathering information from a broad range of sources, fostering constructive conflict, honestly considering the alternatives by ensuring that dissenting views are genuinely considered and not dominating the decision-making process. These behaviors are particularly relevant for leaders making strategic decisions, which are by their nature fraught with uncertainty and where the stakes are often extremely high.
One component of strategic acumen that is often overlooked is whether a leader is able to leverage the individual wisdom and experience of the members of her top team when making strategic decisions. This is an ongoing challenge since most strategic decisions require frequent reassessment and adjustment as circumstances evolve and competitors respond. The decision-making process described above is only possible when a high degree of trust exists amongst members of a management team. If this is not the case, individual team members will not feel comfortable enough giving voice to what they genuinely think and to how they feel in their gut about a particular issue, particularly if this involves challenging the leader. Strategic acumen is thus intricately linked with – and reinforced by – all of the other characteristics of effective leadership covered in this series (Authenticity, Decisiveness, Vision, Humility, Talent Selection and Coaching & Feedback) that promote trust between a leader and her top team.
In the eyes of internal and external stakeholders accountability for the strategy of an organization rests squarely with its leader. Strategic acumen is therefore a vital component of successful leadership. And yet at the heart of the concept of strategic acumen lies a paradox: although an organization’s strategy is strongly associated with a single individual – its leader – astute strategy development often entails a leader deliberately cultivating (and being comfortable with) a dependency on others. Mastering analytical frameworks is therefore only part of the story if a leader is to develop strategic acumen. Cultivating key interpersonal skills critical to strategy formulation is equally essential.
William Erb is a member of WJM Associates’ European Executive Coaching Faculty. Based in London, William specializes in working with senior leaders and top teams to improve their effectiveness in delivering against major strategic objectives. William was formerly an Executive Director in Morgan Stanley’s M&A Department and EVP of Business Strategy and Regional Director for Japan at Amersham Health (now GE Healthcare’s Medical Diagnostics business). William also periodically serves as a faculty adviser on corporate strategy executive education programs at London Business School.
 Ibarra, H & Hunter, M (2007, January). How Leaders Create and Use Networks. Harvard Business Review.