April 15, 2008

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. ‎

Purposeful Initiatives

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.‎

Organizational Capabilities

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.‎