September 9, 2013

Strategic leadership

Written by Jennifer Garvey BergerJennifer Garvey Berger

I’m putting together a “strategic leadership” program this week for a brilliant and innovative client. She wants a kind of a map of the territory of strategic leadership and then, over time, she wants us to send scouting parties into the map to explore and wonder about what the demands are on us in these different lands.  Just now I’m off the phone with another favorite client who is thinking about how to help his organization think about strategic thinking in new ways. And I have been (for weeks now) reading Eric Beinhocker’s brilliant Origin of Wealth and thinking about what he says about strategy and how we are supposed to be strategic in a complex world.  These ideas are swirling around a little, and I thought I’d play with some of them here.

Strategic leadership is, in part, a way of thinking about the world. It is your set of assumptions about the world and how it unfolds and what your part in it might be. So the map of strategic leadership needs to have a whole series of lands that are about particular ways of making sense of the world.

For example, what you believe about the future and your capacity to shape and control the future will significantly shape how you make sense of building strategy. If you believe the future mostly unfolds like the past, you could build your strategy by looking at research about what has been. If you believe the patterns in organizations mostly repeat depending on an identifiable life cycle, you could look around at other organizations and build your strategy by cherry picking the best of all of those other strategies, the ones that have stood the test of time.

If you believe that we can’t assume the future is going to unfold the way the past did, and you can’t look to other organizations for tried and true approaches, suddenly the past becomes a different sort of teacher. We cannot learn exactly what to do, but we can have some directional understanding of the sorts of things that have worked before to inform our thinking about the many things we might want to try. Watch your thinking about this, though, because it is very hard to escape from drawing clear causal lessons from what has happened before to what might happen next. Our brains so much want us to do that. It makes the principals I worked with last month say, “That would never work in my school,” and it makes other leaders I work with say, “We’ve tried that already and we know it doesn’t work.” Our brains lop of options before they ever get really examined or explored. This might be the opposite of strategic thinking.

In our new book, Keith and I make the case that the direction of your strategy needs to be really clear, but then you need to explore and experiment your way toward it. Beinhocker says those experiments (he calls them elements of your “business plan portfolio”) need to have diversity, risk, and inefficiency. Ha! Look at that from a strategic leadership perspective. Most people think strategic thinking is about avoiding long term risk, and it is. But it may be about encouraging short term (and safe-to-fail) risk. Otherwise we may find ourselves reliving into the future Beinhocker’s research about the past “Companies don’t innovate; markets do” he explains: “Markets are highly dynamic, but the vast majority of companies are not.” (He quotes research that says “companies are essentially inert.”) (These various quotes are all around 333-340 if you’re following along from home.)

So one key feature of strategic thinking seems to be about getting out of the belief system that encourages “inert” companies, and moving into the belief systems that encourages new thinking, new dynamism, acceptance of change—and risk, and diversity, and inefficiency. This runs against the grain of much of what organizations push us to do. But perhaps that running against the grain is most fundamentally what strategic leadership is all about—pushing us to develop a richer and more complex view of the world and then offering us the freedom to act from inside that complexity.

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