A Blueprint for Strategic Leadership
Leaders recognize that it is not sufficient to issue a decree for change: they are designing their organizations, building management teams and embarking on strategic initiatives to manage change.
Dubai, UAE- 15 April, 2008 - What makes a leader great? There is still no definitive consensus, despite numerous books and extensive research on the topic. Instead, a leader’s success depends in large part on the organizational context: the conditions and the people that surround him or her. A new study published by consulting firm Booz & Company identified four critical elements necessary for leaders to excel: commitment to the company’s purpose, a top management team with complementary skills, organizational capabilities and employee motivation, and well-chosen strategic initiatives to move the organization forward. And not surprisingly, these are the same factors that need to be integrated to develop and maintain a company’s capacity to transform.
"There is no one-size fits all secret to being an effective leader. Building a great team with a clear purpose, ensuring they have the tools and resources needed, and providing them with compelling direction, are all characteristics of government and business leaders that have successfully implemented change in their organizations," commented Rabih Abouchakra, Principal at Booz & Company, based in Abu Dhabi, UAE.
The Booz & Company research, "A Blueprint for Strategic Leadership," found that over time a leader’s capability is shaped by the top team’s quality and by the capabilities of the full organization. These can either provide invaluable support for the changes a leader wants to make or make those changes impossible. The best leaders pay a great deal of attention to the design of the elements around them: they create effective leadership teams, prioritize and sequence their initiatives carefully, redesign organizational structures to make good execution easier, and, most importantly, integrate these tactics into one coherent strategy.
Abouchakra noted, “In the Gulf region, we’re increasingly seeing companies and public sector organizations that are making dramatic changes to modernize. Leaders recognize that it is not sufficient to issue a decree for change: they are designing their organizations, building management teams and embarking on strategic initiatives to manage change."
Leaders facing change can begin by asking themselves guiding questions:
Why do we do what we do? (That is, what is our purpose?)
What few initiatives do we need to deliver fundamental change?
How do we build and align the top management team?
And how can we equip the organization to develop and deploy the right capabilities to produce the results we want?
The “Why” Factor
The experience of the computer company Dell demonstrates the importance of not losing sight of an organization’s raison d’être. During the high-growth years of the 1990s, the purpose of Dell was clear to its leaders and employees. It had a strong reputation among its customers for high-quality customer service and support. In 2004, around the time of a change in leadership, the company seemed to change direction and implemented a series of cost-cutting measures. The help desk was one of the casualties; and customers had a much harder time getting their computers fixed. The result was unhappy customers and a lawsuit by the New York State Attorney General, claiming false advertising related to customer service.
The "Why Factor," like in the case of Dell, is very powerful. Realizing why we do what we do allows leaders to set priorities and explain the relevance of their decisions. The answer also attracts a higher-quality group of employees, drawn not just to making money but also to meaningful work.
Changing organizations requires action. This is usually achieved through strategic initiatives, such as a launching a campaign, changing a practice or establishing a market position. All too often these initiatives lack a clear connection to the organization’s purpose undermining their relevance and generating little excitement. However, by first answering the “why” of the company, leaders can create a campaign of high-priority initiatives that reinforce one another and that people throughout the enterprise feel comfortable with even if those actions represent a dramatic shift in direction.
“Our experience in the GCC with both private and public sector clients reiterates that unless changes such as new information technology systems or a new organizational structure are explicitly aligned with the purpose and strategy of an organization, they can delay and even undermine strategic direction," said Abouchakra. “Likewise, we have seen enthusiastic organizations that have taken on too many initiatives at once, resulting in failed programs and change fatigue.”
Balanced Top Teams
In general, CEOs do not assemble people who are diverse enough in their personalities and backgrounds to play the complementary roles necessary in a business context. Additionally, they don’t invest much in explicitly building the trust and accountability that team members need to work closely together.
There are many personality and leadership models and assessments to help identify individual strengths when forming teams; however, what is important is to be intentional in establishing leadership teams to ensure diversity. Once the team has complementary members, in-depth practice is required to ensure the leaders are planning and acting together as a team. Effective leadership teams are often good at strategic exercises, where they role-play or conduct war-games involving typical business problems, experimenting with various strategies in a fictional environment before trying them in the real world. Meanwhile, the CEO should be planning his or her succession, using the senior team as a crucible for developing others who will be capable of filling the top position in the future.
Through their actions, leaders have a great deal of influence over an organization’s culture, but very little of that influence is direct. They can’t make a team more skilled or committed through directives alone; requirements mean very little if they cannot be translated into specific behavior changes. “We’ve learned this at Booz & Company through our own work on building organizational capabilities for change, and in particular through the body of practice known as organizational DNA. By changing the reporting relationships and structures, the networks through which people exchange information, the motivators and incentives, and the decision rights in an organization, organizations can shift their capabilities and motivate people to act in sync with the organization’s purpose,” added Abouchakra.
The Right Questions
Purpose, the top management team, organizational capabilities, and strategic initiatives are common topics for business writers, but research in the strategic leadership field is so fragmented, unreliable, and obscure that many designers of strategic leadership initiatives base their approach on only a small fraction of the knowledge that exists.
“Every organization is different, so diagnosing the situation and culture is critical,” stated Abouchakra. “The process will involve the most talented and committed senior executives, and may take several months until everyone is comfortable with the company’s purpose and the right set of initiatives to pursue. Extra time and care in bringing people to a common understanding at the beginning, means far less time lost in false starts and cutbacks later.”
A design for strategic leadership is not a new approach, but is simply the practiced, considered strategy for change that the best and most long-lived companies have always used. It takes the kind of commitment, dedication, and respect that truly makes a company a great place to work. And in the GCC, where there are unprecedented market and social forces requiring change, there is no better time to consider integrating these four starting points to strategic leadership.