THE ROLE OF LEADERSHIP IN STRATEGIC MANAGEMENT

Introduction
Strategic leadership is the ability to anticipate, envision, maintain flexibility, and
empower others to create strategic change as necessary. It also involves managing through
others, managing entire enterprise rather than functional subunit, and coping with change that
continues to increase in the 21st century competitive landscape. Because of this landscape’s
complexity and global nature, strategic leaders must learn how to effectively influence human
behavior, often in uncertain environments. By word or by personal example, and through their
ability to envision the future, effective strategic leaders meaningfully influence the behavior,
thought, and feelings of those with whom they work.
Strategic leadership basically means using strategy in the management of workers. The
main strategy usually employed in a strategic style of leadership is to motivate workers to take
the initiative to improve their productive input into the company.
Strategy involves thinking and planning. Leadership inspires others to take the
appropriate action. Strategic leadership is a management model that trains and encourages
employees to best prepare the company for the future.
The primary responsibility for effective strategic leadership rests at the top, in particular,
with the CEO. Other commonly recognized strategic leaders include members the board of
directors, the top management team, and divisional general managers. Regardless of their title
and organizational function, strategic leaders have substantial decision-making responsibilities
that cannot be delegated.
Strategic leadership is an extremely complex, but critical, form of leadership. Strategies
cannot be formulated and implemented to achieve above-average returns without effective
strategic leaders.
Strategic leaders are always looking ahead and analyzing the present in terms of
preparation for what may be ahead for the business. Awareness is a big part of a strategic
leadership style, but it must be followed up with well thought out action. Strategic leaders are
adaptable and growth-oriented. They take responsibility for getting things done by training
employees to think and act more effectively to achieve the best result possible for the company.
Being a strategic leader requires that you first understand corporate priorities and future
agendas as well as have a clear direction on how you can contribute to it in a value-added way.
Being an active supporter of the organization’s strategy is only one element of strategic
leadership. There are two other very important elements.

The second aspect is a personal process to help leaders think strategically about the role
leaders and their team can play relative to the organization’s strategy things that are independent
and unique to leaders’ responsibilities. It is about how you, as an individual, can influence your
future in positive ways and contribute to the execution of corporate strategy. This comprehensive
process can be used in any type of situation and by anyone wanting to make a difference in the
future.

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 The third and probably most overlooked responsibility of strategic leadership is leading,
guiding, and influencing their team members to be strategic thinkers about their own
responsibilities. Typically, we think of team members as task executors and tactical players. But,
imagine the strategic value their team could generate if each member not only fulfilled their daily
operational responsibilities, but also thought about their roles, objectives, and changes needed to
satisfy the future requirements of internal and external customers. Innovation would occur,
productivity would increase, and team member motivation and self actualization would be
unleashed.

Leadership levels

The above figure shows the perspectives of the three levels of leadership: direct, organizational,
and strategic.

Leadership levels

Direct leadership

Direct leadership is face-to-face, first-line leadership. It takes place in those organizations

where subordinates are used to seeing their leaders all the time. The direct leader’s span of
influence, those whose lives he can reach out and touch, may range from a handful to several
hundred people.

Direct leaders develop their subordinates one-on-one; however, they also influence their
organization through their subordinates.

For direct leaders there is more certainty and less complexity than for organizational and
strategic leaders. Direct leaders are close enough to see very quickly how things work, how
things don’t work, and how to address any problems.

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Organizational leadership

Organizational leaders may influence several hundred to several thousand people. They
do this indirectly, generally through more levels of subordinates than do direct leaders. The
additional levels of subordinates can make it more difficult for them to see results.
Organizational leaders have staffs to help them lead their people and manage their organizations’
resources. They establish policies and the organizational climate that support their subordinate
leaders.

Organizational leadership skills differ from direct leadership skills in degree, but not in
kind. That is, the skill domains are the same, but organizational leaders must deal with more
complexity, more people, greater uncertainty, and a greater number of unintended consequences.
They find themselves influencing people more through policymaking and systems integration
than through face-to-face contact.

Organizational leaders focus on planning and mission accomplishment over the next two
to ten years. Getting out of their offices and visiting the parts of their organizations where the
work is done is especially important for organizational leaders. They must make time to get to
the field to compare the reports their staff gives them with the actual conditions their people face
and the perceptions of the organization and mission they hold.

Strategic leadership

Strategic leaders are generally responsible for large organizations and may influence
several thousand to hundreds of thousands of people. They establish organizational structure,
allocate resources, and communicate strategic vision.

Strategic leaders work in an uncertain environment on highly complex problems that

affect and are affected by events and organizations outside their own.

Strategic leaders apply many of the same leadership skills and actions they mastered as
direct and organizational leaders; however, strategic leadership requires others that are more
complex and indirectly applied.

Strategic leaders, like direct and organizational leaders, process information quickly,
assess alternatives based on incomplete data, make decisions, and generate support. However,
strategic leaders’ decisions affect more people, commit more resources, and have wider-ranging
consequences in both space and time than do decisions of organizational and direct leaders.

Strategic leaders often do not see their ideas come to fruition during their "watch" and
their initiatives may take years to plan, prepare, and execute. In-process reviews (IPRs) might
not even begin until after the leader has left the job. This has important implications for long-
range planning. On the other hand, some strategic decisions may become a front-page headline
of the next morning’s newspaper.

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Top management: Strategic leaders

Top-level managers are an important resource for firms seeking to formulate and
implement strategies effectively. The strategic decisions made by top-level managers influence
how the firm is designed and whether or not goals will be achieved. Thus, a critical element of
organizational success is having a top management team with superior managerial skills.

Managers often use their discretion when making strategic decision, including those
concerned with the effective implementation of strategies. The primary factors that determine the
amount of decision-making discretion a manager has included:

a) External environment sources structure, the rate of market growth in the firm’s primary
industry and the degree to which products can be differentiated.
b) Characteristics of an organization including size, age, resources and culture.
c) Characteristic of the manager including commitment to the firm and its strategic
outcomes, tolerance for ambiguity, skill in working with different people and aspiration
level.

Strategic leaders can be a source of competitive advantage only when their work is valuable,
rare, costly to imitate and nonsubstitutable. Effective strategic leaders become a source of
competitive advantage when they focus their work on the key issues that ultimately shape the
firm’s ability to earn above-average return.

Developing Strategic Leadership

If becoming a strategist is the “ends,” then leadership is the “ways,” and development is
the “means.” Learning to become a strategic leader requires special preparation in several areas.
First, one must understand how such a leader develops—in essence the anatomy of strategic
leadership. Second, one should recognize some of the essential competencies a strategic leader
must have. Finally, the prospective leader needs to assess his or her current abilities and commit
to a development plan.

Anatomy of a Strategic Leader

Development of a strategic leader involves a number of important aspects. First, the most
important, indeed foundational, part of this preparation concerns values, ethics, codes, morals,
and standards. Second, the path to strategic leadership resembles the building of a pyramid
(below). Shortcuts do not exist, and one can’t start at the top strategic leaders are made, not born.

Strategic leaders gradually build wisdom, defined as acquiring experiences over time.
One must also remember that certain activities can accelerate these experiences and widen
perspectives. Leaders should know that even though some individuals with strategic competency
may not become strategic decision makers, they can still influence and contribute to decisions.

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Additionally, having strategic competency will allow one to fully understand strategic decisions
and perspectives.

• Strategic leadership begins with organizational values, standards, and

ethics—the foundation of our profession.

• Upon this foundation, the officer develops an abstract body of expert

knowledge based primarily on experience. Continuing education can
influence, expand, and accelerate development.

• Next, the officer is exposed to command responsibility and

accountability—a vital phase during which the officer gets his or her first
real taste of consequential decision making.

• Further education in strategic-thinking skills enhances the officer’s

competence. In each case, an officer could have opportunities to exercise
strategic competency in support of a strategic leader.

• Ultimately, the officer will participate in strategic decision making and

become a strategic leader.

Anatomy of a Strategic Leader

Role of leadership
The role of leadership in business is indisputable. Great leaders create great businesses.
Mediocre leaders create mediocre businesses. Find out more about leadership attributes and what
it takes to be an effective business leader. The main roles usually perform by strategic leader is:
a) Determining strategic direction
b) Effectively managing the firm’s resource portfolio
c) Sustaining an effective organizational culture
d) Emphasizing ethical practices
e) Establishing balanced organizational controls

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a) Determining strategic direction
Determining strategic direction of a firm involves developing a long-term vision of the
strategic intent or vision. A long-term vision typically looks at least five to ten years into the
future. A philosophy with goals, this vision consists of the image and character the firm seeks.
b) Effectively managing the firm’s resource portfolio
Strategic leaders manage the firm’s portfolio of resources by organizing them into
capabilities, structuring the firm to use the capabilities, and developing and implementing a
strategy to leverage those resources to achieve a competitive advantage.
c) Sustaining an effective organizational culture
An organizational culture consists of a complex set of ideologies, symbols, and core
values that is shared throughout the firm and influences the way business is conducted. Changing
a firm’s organizational culture is more difficult than maintaining it, but effective strategic leaders
recognize when change is needed. Incremental changes to the firm’s culture typically are used to
implement strategies. The effective organizational culture succeed only when the firm’s CEO,
other key top management team members, and middle-level managers actively shown their
support.
d) Emphasizing ethical practices
The effectiveness of process used to implement the firm’s strategies increase when they
are based on ethical practices. Ethical companies encourage and enable people at all organization
levels to act ethically when doing what is necessary to implement the firm’s strategies. So,
strategic leaders are challenged to take actions that increase the probability an ethical culture will
prevail in their organizations. The action can be highlight by strategic leaders:
i. Institute a formal program to manage ethics
ii. Establishing and communicating specific goals to describe the firm’s ethical
standard.
iii. Continuously revising and updating the code of conduct, based on inputs from
people throughout the firm and from other stakeholders
iv. Disseminating the code of conduct to all stakeholders to inform them of the firm’s
ethical standards and practices
v. Developing and implementing methods and procedures to use in achieving the
firm’s ethical standard
vi. Creating and using explicit reward systems that recognize acts of courage
vii. Creating a work environment in which all people are treated with dignity

e) Establishing balanced organizational controls

Organizational controls are basic to a capitalistic system and have long been viewed as an
important part of strategy implementation processes. Controls are necessary to help ensure that
the firms achieve their desired outcomes. Controls also help strategic leaders build credibility,

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demonstrate the value of strategies to the firm’s stakeholders, and promote and support strategic
change.

Conclusion

Becoming a strategic leader is a daunting challenge. It starts with taking stock of

leadership abilities, conceptual capacity, and interpersonal skills. A thorough self-assessment
will help identify strengths and weaknesses. Such assessments can examine personality type,
leadership motivation, originality, innovation, tolerance, teamwork, and conceptual ability.
These assessments are like the starting point on a map, letting prospective leaders know where
they are so they can take the best route to their destination. Completing a detailed self-
assessment is also the first step in commitment to the personal- and professional-development
process required to become a strategic leader.

As a follow-up to the self-assessment, aspiring leaders should ask themselves a series of

questions: What are my strengths? How can I capitalize on them? Where are my weaknesses?
What can I do about them? Where do I want to be in the future? How can I get there? Do I really
want to commit to development? The last question is the most difficult one. Those who answer
yes are ready to begin the journey toward becoming strategic leaders.

At this point, leader candidates should volunteer for and accept challenging assignments,
especially in areas in which they might not have worked before. These could include moving into
a different functional area, accepting joint assignments, or working in an interagency
environment. Such tasking tend to accelerate experience and broaden perspectives.

Furthermore, pursuing a formal course of study at senior service colleges and

participating in other education programs would broaden one’s knowledge and conceptual
ability. Self-learning is also valuable, especially reading. All strategic leaders are voracious
readers and they read outside their normal area of expertise, again, to expand their perspective
and increase their conceptual ability. In fact, many of them are experts in a number of unrelated
fields. Becoming a “dual expert” helps one think in multiple dimensions.

The many components of the strategic-leadership environment challenge even the best
leaders. The monumental consequences of strategic decisions call for individuals with unique
performance abilities who can navigate the volatility, uncertainty, complexity, and ambiguity
inherent in the nature of those decisions. Aspiring leaders can rise to the challenge by undergoing
self-assessment and personal development. Accepting the demands of strategic leadership
involves a transition from the art of the familiar to the art of the possible. This is the realm of
strategic leadership and the strategic environment.

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References
Internet
1) Leadership Levels, http://www.milum.net/strategic_leadership.htm
2) Critical Elements of Strategic Leadership: Beyond Corporate Strategy,
http://www.cmoe.com/blog/tag/strategic-leadership

Book

1) Michael A. Hitt, R. Duane Ireland, Robert E. Hoskisson (2005).Strategic Management:

Competitiveness and Globalization Concepts.6th Edition. Ohio: Thomson South-Western.