Shaping strategy: Which leadership traits help most?
For decades, every year business leaders have followed a generally standardized approach to establishing an enterprise-wide strategy. It went something like this: determine revenue goals, look at the competition, conduct risk analyses, and then build strategies aligned to the mission of the organization. From these strategies, leaders set goals, specific action steps, and metrics, all of which they evaluated in a regular cadence.
Such a leisurely approach is, today, a luxury few can afford. The current business environment can change rapidly in weeks, days, or even hours, demanding that leaders be able to quickly reevaluate, adjust, or even completely replace their previous strategies, and leaving some scrambling to stay afloat or seize new opportunities. Leaders must act quickly, often in a state of ambiguity and without well-vetted plans. It’s not only the strategies but also the leaders who develop and execute them that must be more fluid, flexible, and adaptable than ever before.
What differentiates leaders good at shaping strategy
Drawing on Heidrick & Struggles data on more than 3,000 leaders in 7 functional areas, working at more than 300 companies in 12 industries, we looked at the attributes of leaders who are highly skilled at shaping strategy, according to their colleagues.1 “Shape strategy” is one element of our META framework, which identifies behaviors that differentiate high-performing organizations, teams, and leaders as they seek to mobilize, execute, and transform with agility. (For more on the META framework, see “Bringing your organization up to speed.”)
Leaders seen as better at shaping strategy take a different approach to problem-solving than others and are unafraid to disrupt current business models and ways of working, both of which can help leaders make strategic changes more quickly and with less information.
Solving problems with creativity and foresight
Leaders rated as strong at shaping strategy approach problem-solving with more creativity and foresight than others, according to the ratings of their colleagues. This implies these leaders have a stronger ability to understand current trends, key events, and environmental factors that influence an organization’s strategy as they are happening. These leaders can then take their understanding and redefine their strategies as needed.
These leaders are also able to balance both short-term and long-term needs and concerns and can hold multiple competing priorities in mind at the same time. They quickly cut through complexity and ambiguity, creating clarity for themselves and their teams. When faced with problems or setbacks, these strategic leaders explore new angles to find creative, win-win solutions.
Boldly disrupting the current business models and ways of working
But these leaders don’t just have better ideas; they more often act on them, transforming the ways that they and their organizations operate. They find ways to transform their organizations’ business model and shape change, rather than simply responding to market changes.
The difference these leaders make
The events of 2020 have highlighted the real-world importance of these two leadership capabilities, in business and more broadly. One example is the production facilities of a large industrial component manufacturer with operations spanning the United States, Mexico, Asia, and Europe. The company faced a greatly varied and constantly shifting set of COVID-19 safety regulations established by the various municipalities where its plants were located. To manage both safety and regulatory compliance, the CEO instituted a weekly strategy call with the entire executive leadership team. With such an approach, the team was able to share information on what was working in different plants with different levels of constraints, sharing their foresight and fostering creativity in problem-solving. In some cases, solutions required substantial disruption of ways of working, but the CEO’s active participation ensured close alignment in the management team and that the company was able to maintain a consistent overall strategy while making local changes. In the end, the company was able to successfully navigate a very complex situation and maximize plant productivity while protecting the health of plant workers and complying with local mandates.
All companies will benefit from having more leaders who are good at shaping strategy. To help develop their leaders’ ability to think differently about problem-solving, organizations can encourage them to think more creatively by exposing themselves to new functions or industries or by learning from leading-edge innovators in their field. In doing so, leaders can strengthen their ability to analyze what is currently happening and identify patterns and themes in order to accurately predict what is coming. To encourage leaders to be bold and disruptive, organizations can cultivate a culture that is open to experimentation and transformation and ensure the right systems are in place to support change.
Our rapidly changing and evolving environment requires leaders who can meet the moment. Now more than ever, strategic leaders who evaluate the present, anticipate the future, and adapt their approach are essential to successful organizations.
About the authors
Karen Rosa West (kwest@heidrick.com) is a partner in Heidrick & Struggles’ Chicago office and the head of psychology, product research, and design for HLabs, the research arm of Heidrick & Struggles.
Megan Herbst (mherbst@heidrick.com) is a psychological analytics coordinator for HLabs; she is based in the Chicago office.
You can reach them at HLabs@heidrick.com.
References
1 The data is leaders’ assessments of their own strength in 33 aspects of leadership, as well as the assessments of their colleagues. Those 33 aspects roll up into 11 leadership skills, of which “shape strategy” is one.