Write an (at least) 250-word memo to your boss that explains what in this week’s learning will and what won’t work in your organization.
13
CHAPTER 1
Strategic Leadership: The Essential Skills by Paul J. H. Schoemaker, Steve Krupp, and Samantha Howland
The storied British banker and fi nancier Nathan Roths-
child noted that great fortunes are made when can-
nonballs fall in the harbor, not when violins play in the
ballroom. Rothschild understood that the more unpre-
dictable the environment, the greater the opportunity—
if you have the leadership skills to capitalize on it.
Through research at the Wharton School and at our
consulting fi rm involving more than 20,000 executives
Reprinted from Harvard Business Review, January–February 2013
(product #R1301L).
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C o p y r i g h t 2 0 1 9 . H a r v a r d B u s i n e s s R e v i e w P r e s s .
A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .
EBSCO Publishing : eBook Collection (EBSCOhost) – printed on 8/12/2024 3:59 PM via VILLANOVA UNIVERSITY AN: 1811153 ; Harvard Business Review.; HBR Guide to Thinking Strategically (HBR Guide Series) Account: s8877782.main.ehost
Get Started: Be Strategic in Your Daily Work
14
to date, we have identifi ed six skills that, when mastered
and used in concert, allow leaders to think strategically
and navigate the unknown effectively: the abilities to
anticipate, challenge, interpret, decide, align, and learn.
Each has received attention in the leadership literature,
but usually in isolation and seldom in the special context
of high stakes and deep uncertainty that can make or
break both companies and careers. This article describes
the six skills in detail. An adaptive strategic leader—
someone who is both resolute and fl exible, persistent in
the face of setbacks but also able to react strategically
to environmental shifts—has learned to apply all six
at once.
Do you have the right networks to help you see op-
portunities before competitors do? Are you comfortable
challenging your own and others’ assumptions? Can you
get a diverse group to buy in to a common vision? Do
you learn from mistakes? By answering questions like
these, you’ll get a clear view of your abilities in each area.
The self-test at this article’s end (and the more detailed
test available online) will help you gauge your strengths
and weaknesses, address defi cits, and optimize your full
portfolio of leadership skills.
Let’s look at each skill in turn.
Anticipate Most organizations and leaders are poor at detecting
ambiguous threats and opportunities on the periphery
of their business. Coors executives, famously, were late
seeing the trend toward low-carb beers. Lego manage-
ment missed the electronic revolution in toys and gam-
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Strategic Leadership: The Essential Skills
15
ing. Strategic leaders, in contrast, are constantly vigilant,
honing their ability to anticipate by scanning the envi-
ronment for signals of change.
We worked with a CEO named Mike who had built
his reputation as a turnaround wizard in heavy manu-
facturing businesses. He was terrifi c at reacting to crises
and fi xing them. After he’d worked his magic in one par-
ticular crisis, Mike’s company enjoyed a bump in growth,
fueled in part by an up cycle. But after the cycle had
peaked, demand abruptly softened, catching Mike off
guard. More of the same in a down market wasn’t going
to work. Mike needed to consider various scenarios and
gather better information from diverse sources in order
to anticipate where his industry was headed.
We showed Mike and his team members how to pick
up weak signals from both inside and outside the orga-
nization. They worked to develop broader networks and
to take the perspective of customers, competitors, and
partners. More alert to opportunities outside the core
business, Mike and the team diversifi ed their product
portfolio and acquired a company in an adjacent market
where demand was higher and less susceptible to boom-
and-bust cycles.
To improve your ability to anticipate:
• Talk to your customers, suppliers, and other part-
ners to understand their challenges.
• Conduct market research and business simulations
to understand competitors’ perspectives, gauge
their likely reactions to new initiatives or products,
and predict potential disruptive offerings.
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16
• Use scenario planning to imagine various futures
and prepare for the unexpected.
• Look at a fast-growing rival and examine actions it
has taken that puzzle you.
• List customers you have lost recently and try to
fi gure out why.
• Attend conferences and events in other industries
or functions.
Challenge Strategic thinkers question the status quo. They chal-
lenge their own and others’ assumptions and encourage
divergent points of view. Only after careful refl ection and
examination of a problem through many lenses do they
take decisive action. This requires patience, courage, and
an open mind.
Consider Bob, a division president in an energy
company we worked with, who was set in his ways and
avoided risky or messy situations. When faced with a
tough problem—for example, how to consolidate busi-
ness units to streamline costs—he would gather all avail-
able information and retreat alone into his offi ce. His
solutions, although well thought out, were predictable
and rarely innovative. In the consolidation case, he fo-
cused entirely on two similar and underperforming busi-
nesses rather than considering a bolder reorganization
that would streamline activities across the entire divi-
sion. When he needed outside advice, he turned to a few
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Strategic Leadership: The Essential Skills
17
seasoned consultants in one trusted fi rm who suggested
tried-and-true solutions instead of questioning basic in-
dustry assumptions.
Through coaching, we helped Bob learn how to in-
vite different (even opposing) views to challenge his
own thinking and that of his advisers. This was uncom-
fortable for him at fi rst, but then he began to see that
he could generate fresh solutions to stale problems and
improve his strategic decision making. For the organi-
zational streamlining, he even assigned a colleague to
play devil’s advocate—an approach that yielded a hybrid
solution: Certain emerging market teams were allowed
to keep their local HR and fi nance support for a transi-
tional period while tapping the fully centralized model
for IT and legal support.
To improve your ability to challenge:
• Focus on the root causes of a problem rather
than the symptoms. Apply the “fi ve whys” of
Sakichi Toyoda, Toyota’s founder. (“Product
returns in creased 5% this month.” “Why?”
“ Because the product intermittently malfunc-
tions.” “Why?” And so on.)
• List long-standing assumptions about an aspect
of your business (“High switching costs prevent
our customers from defecting”) and ask a diverse
group if they hold true.
• Encourage debate by holding “safe zone” meetings
where open dialogue and confl ict are expected and
welcomed.
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18
• Create a rotating position for the express purpose
of questioning the status quo.
• Include naysayers in a decision process to surface
challenges early.
• Capture input from people not directly affected by
a decision who may have a good perspective on the
repercussions.
Interpret Leaders who challenge in the right way invariably elicit
complex and confl icting information. That’s why the best
ones are also able to interpret. Instead of refl exively see-
ing or hearing what you expect, you should synthesize
all the input you have. You’ll need to recognize patterns,
push through ambiguity, and seek new insights. Fin-
land’s former president J. K. Paasikivi was fond of say-
ing that wisdom begins by recognizing the facts and then
“re-cognizing,” or rethinking, them to expose their hid-
den implications.
Some years ago Liz, a U.S. food company CMO, was
developing a marketing plan for the company’s low-carb
cake line. At the time, the Atkins diet was popular, and
every food company had a low-carb strategy. But Liz no-
ticed that none of the consumers she listened to were
avoiding the company’s snacks because they were on a
low-carb diet. Rather, a fast-growing segment—people
with diabetes—shunned them because they contained
sugar. Liz thought her company might achieve higher
sales if it began to serve diabetics rather than fi ckle di-
eters. Her ability to connect the dots ultimately led to
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Strategic Leadership: The Essential Skills
19
a profi table change in product mix from low-carb to
sugar-free cakes.
To improve your ability to interpret:
• When analyzing ambiguous data, list at least three
possible explanations for what you’re observing
and invite perspectives from diverse stakeholders.
• Force yourself to zoom in on the details and out to
see the big picture.
• Actively look for missing information and evidence
that disconfi rms your hypothesis.
• Supplement observation with quantitative
analysis.
• Step away—go for a walk, look at art, put on non-
traditional music, play ping-pong—to promote an
open mind.
Decide In uncertain times, decision makers may have to make
tough calls with incomplete information, and often they
must do so quickly. But strategic thinkers insist on mul-
tiple options at the outset and don’t get prematurely
locked into simplistic go/no-go choices. They don’t shoot
from the hip but follow a disciplined process that bal-
ances rigor with speed, considers the trade-offs involved,
and takes both short- and long-term goals into ac-
count. In the end, strategic leaders must have the cour-
age of their convictions—informed by a robust decision
process.
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20
Janet, an execution-oriented division president in a
technology business, liked to make decisions quickly and
keep the process simple. This worked well when the com-
petitive landscape was familiar and the choices straight-
forward. Unfortunately for her, the industry was shifting
rapidly as nontraditional competitors from Korea began
seizing market share with lower-priced products.
Janet’s instinct was to make a strategic acquisition in
a low-cost geography—a yes-or-no proposition—to pre-
serve the company’s competitive pricing position and
market share. As the plan’s champion, she pushed for a
rapid green light, but because capital was short, the CEO
and the CFO resisted. Surprised by this, she gathered the
principals involved in the decision and challenged them
to come up with other options. The team elected to take
a methodical approach and explored the possibility of a
joint venture or a strategic alliance. On the basis of that
analysis, Janet ultimately pursued an acquisition—but of
a different company in a more strategic market.
To improve your ability to decide:
• Reframe binary decisions by explicitly asking your
team, “What other options do we have?”
• Divide big decisions into pieces to understand
component parts and better see unintended
consequences.
• Tailor your decision criteria to long-term versus
short-term projects.
• Let others know where you are in your decision
process. Are you still seeking divergent ideas and
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Strategic Leadership: The Essential Skills
21
debate, or are you moving toward closure and
choice?
• Determine who needs to be directly involved and
who can infl uence the success of your decision.
• Consider pilots or experiments instead of big bets,
and make staged commitments.
Align Strategic leaders must be adept at fi nding common
ground and achieving buy-in from stakeholders who
have disparate views and agendas. This requires active
outreach. Success depends on proactive communication,
trust building, and frequent engagement.
One executive we worked with, a chemical company
president in charge of the Chinese market, was tireless in
trying to expand his business. But he had diffi culty getting
support from colleagues elsewhere in the world. Frus-
trated that they didn’t share his enthusiasm for opportu-
nities in China, he plowed forward alone, further alienat-
ing them. A survey revealed that his colleagues didn’t fully
understand his strategy and thus hesitated to back him.
With our help, the president turned the situation
around. He began to have regular face-to-face meetings
with his fellow leaders in which he detailed his growth
plans and solicited feedback, participation, and differ-
ing points of view. Gradually they began to see the ben-
efi ts for their own functions and lines of business. With
greater collaboration, sales increased, and the president
came to see his colleagues as strategic partners rather
than obstacles.
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22
To improve your ability to align:
• Communicate early and often to combat the two
most common complaints in organizations: “No
one ever asked me” and “No one ever told me.”
• Identify key internal and external stakeholders,
mapping their positions on your initiative and
pinpointing any misalignment of interests. Look
for hidden agendas and coalitions.
• Use structured and facilitated conversations to
expose areas of misunderstanding or resistance.
• Reach out to resisters directly to understand their
concerns and then address them.
• Be vigilant in monitoring stakeholders’ positions
during the rollout of your initiative or strategy.
• Recognize and otherwise reward colleagues who
support team alignment.
Learn Strategic leaders are the focal point for organizational
learning. They promote a culture of inquiry, and they
search for the lessons in both successful and unsuccess-
ful outcomes. They study failures—their own and their
teams’—in an open, constructive way to fi nd the hidden
lessons.
A team of 40 senior leaders from a pharmaceutical
company, including the CEO, took our Strategic Apti-
tude Self-Assessment and discovered that learning was
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Strategic Leadership: The Essential Skills
23
their weakest collective area of leadership. At all levels
of the company, it emerged, the tendency was to punish
rather than learn from mistakes, which meant that lead-
ers often went to great lengths to cover up their own.
The CEO realized that the culture had to change if
the company was to become more innovative. Under
his leadership, the team launched three initiatives: (1) a
program to publicize stories about projects that initially
failed but ultimately led to creative solutions; (2) a pro-
gram to engage cross-divisional teams in novel experi-
ments to solve customer problems—and then report the
results regardless of outcome; and (3) an innovation tour-
nament to generate new ideas from across the organiza-
tion. Meanwhile, the CEO himself became more open in
acknowledging his missteps. For example, he described
to a group of high-potentials how his delay in selling a
stalled legacy business unit had prevented the enterprise
from acquiring a diagnostics company that would have
expanded its market share. The lesson, he explained, was
that he should more readily cut losses on underperform-
ing investments. In time, the company culture shifted to-
ward more shared learning and bolder innovation.
To improve your ability to learn:
• Institute after-action reviews, document lessons
learned from major decisions or milestones (in-
cluding the termination of a failing project), and
broadly communicate the resulting insights.
• Reward managers who try something laudable but
fail in terms of outcomes.
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Get Started: Be Strategic in Your Daily Work
24
• Conduct annual learning audits to see where deci-
sions and team interactions may have fallen short.
• Identify initiatives that are not producing as
expected and examine the root causes.
• Create a culture in which inquiry is valued and
mistakes are viewed as learning opportunities.
Becoming a strategic leader means identifying weak-
nesses in the six skills discussed above and correcting
them. Our research shows that strength in one skill
cannot easily compensate for a defi cit in another, so
it is important to methodically optimize all six abili-
ties. The box “Are You a Strategic Leader?” at the end
of this chapter contains a short version of our Strate-
gic Aptitude Assessment (available online at hbrsurvey
.decisionstrat.com), which can help reveal areas that re-
quire attention. For clearer and more useful results, take
the longer survey and ask colleagues—or at least your
manager—to review and comment on your answers.
Paul J. H. Schoemaker is the former Research Director
of the Wharton School’s Mack Institute and a coauthor
of Peripheral Vision (Harvard Business School Press,
2006). He served as an adviser to the Good Judgment
Project. Steve Krupp is Senior Managing Partner at Deci-
sion Strategies International, Inc. Samantha Howland, a
Senior Managing Partner at DSI, leads its Executive and
Leadership Development Practice.
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Strategic Leadership: The Essential Skills
25
ARE YOU A STRATEGIC LEADER?
As you complete this assessment, think about the work
you have done over the past year related to developing
new strategies, solving business challenges, and mak-
ing complex decisions. Average your scores for each of
the six leadership skills and then address your weakest
area fi rst, following the recommendations described in
this article and online.
ALMOST How often do you… RARELY ALWAYS
Anticipate SURVEY AVERAGE: 4.99*
Gather information from a wide network of experts and sources both inside and outside your industry or function.
1 2 3 4 5 6 7
Predict competitors’ potential moves and likely reactions to new initiatives or products.
1 2 3 4 5 6 7
Challenge SURVEY AVERAGE: 5.52
Reframe a problem from several angles to understand root causes.
1 2 3 4 5 6 7
Seek out diverse views to see multiple sides of an issue. 1 2 3 4 5 6 7
Interpret SURVEY AVERAGE: 5.78
Demonstrate curiosity and an open mind. 1 2 3 4 5 6 7
Test multiple working hypoth- eses with others before coming to conclusions.
1 2 3 4 5 6 7
(continued)
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Get Started: Be Strategic in Your Daily Work
26
Decide SURVEY AVERAGE: 4.81
Balance long-term investment for growth with short-term pressure for results.
1 2 3 4 5 6 7
Determine trade-off s, risks, and unintended consequences for customers and other stakehold- ers when making decisions.
1 2 3 4 5 6 7
Align SURVEY AVERAGE: 5.01
Assess stakeholders’ tolerance and motivation for change. 1 2 3 4 5 6 7
Pinpoint and address confl icting interests among stakeholders. 1 2 3 4 5 6 7
Learn SURVEY AVERAGE: 4.95
Communicate stories about success and failure to promote institutional learning.
1 2 3 4 5 6 7
Course-correct on the basis of disconfi rming evidence, even after a decision has been made.
1 2 3 4 5 6 7
*Averages are based on responses to this survey from more than 20,000 executives.
ARE YOU A STRATEGIC LEADER?
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,
65
Chapter 7 Setting Priorities Before Starting Your Project by Ron Ashkenas
In a rush to demonstrate initiative and take action, new
project managers often launch activities without fi rst get-
ting a sense of which ones are the most critical and what
the sequence should be. As a result, they unwittingly slow
things down.
Take this example: Plant managers at a global man-
ufacturing company kept getting peppered with un-
necessary, often redundant, data requests from corpo-
rate headquarters. To reduce this burden, the head of
manufacturing asked a senior engineer to lead a project
team to streamline data sharing. Upon receiving the as-
signment, the engineer enthusiastically (1) fi red off an
e-mail requesting tha