Strategic thinking and leadership have become some of the most fundamental elements which provide an organization with direction and vision. These two factors are indeed critical components that are crucial for growth and success of any business organization. Management studies indicate that strategic leadership accomplishes growth and success in an organization through effective management of change and provision of direction to workgroups.
Johnson, Richard and Scholes (2011) argue that the fast pace of globalization and an increase in competition provides a continuing challenge on leaders to strive and meet set expectations. In addition, addressing organizational challenges demands thorough development as well as implementation of strategic actions and decisions as this paper examines with specific case from the British Airways.
It is worth noting that this approach in organizational management is quite consistent with Hamel and Prahald’s model of strategic intent which indicates that strategic leadership and thinking are crucial for developing capabilities and empowering an organization to overcome challenges that drives it towards success. This paper takes a holistic look at strategic thinking and leadership and its relations with innovation and change. It concludes by providing recommendations on how strategic processes in an organization can be improved.
A brief overview of leadership and leadership strategies
Understanding strategic leadership as Beer and Foote (2009) posit in their publication requires a deeper understanding of what is entailed in organizational leadership. It is imperative to mention that leadership is a process which involves influencing other people’s values, behaviors, and attitudes. Therefore, strategic leadership is a demonstration by a leader of the abilities to create a strategic change, empower others, maintain flexibility, envision and anticipate as it may be deemed necessary from time to time. Beer and Foote continue to highlight that strategic leadership brings about the much needed strategic change which is indeed a vital component that triggers events which stimulates growth and success in a firm.
Strategic leadership as Johnson, Richard and Scholes (2011) point out is a component that is multifunctional. This element is critical and greatly employed in firms existing in today’s globalized environment to manage and cope exponentially with the increasing need for change management. Strategic leadership requires that leaders develop abilities to effectively engage and manage complex information processing. Besides, strategic leaders should be able to integrate and accommodate strategic management processes in both internal and external conditions. While the concept and application of strategic leadership in organizations is indeed crucial in modern day management, it is worth noting that it requires thorough training and capacity building of managers who have been charged with the duty of ensuring smooth running of organizations on a daily basis.
Capon(2008) points out in his book Understanding strategic management that many organizations today are increasingly relying on capable and strategic leadership to lead them to success amidst unprecedented changes. Strategic leadership for that reason becomes a significant component in businesses today as it provides them (businesses) with vision and direction. Credible studies reveal that the inability of most vulnerable organizations to successfully implement strategic plans and adapt to changes are due to lack of an effective leadership. The disturbing revelations given by the studies echoes what Kurt Lewin posits in his leadership style model that lack of strategy in leadership is not only a cause of business failure, but of potential turmoil (Beer & Foote, 2009).
Development and implementation of strategies
Formulation of the most applicable and the much needed strategies is merely one part of attaining excellent organizational leadership. It is worth noting that if the right strategies are not developed in due time, even the process of implementation may be a nightmare to management. Therefore, it is quite prudent for managers in organizations to play proactive roles in the aforementioned process in order to optimize organizational performance at nay given level of production.
Developing strategies by strategic leaders is a process that requires creating in an organization purpose and meaning for operation which are in line with the mission and vision an organization has. Collins (2001) posits that to develop effective strategies, leaders of businesses need to apply several critical components some of which include establishing strategic controls, emphasizing ethical practices and sustaining an effective corporate culture. Other elements include developing human capital and maintaining as well as exploiting core competencies.
Exploiting core competencies
In their book Strategy Synthesis: concise version Witt and Meyer (2010) point out that a strategy can be developed when a strategic leader begins to exploit the various core competencies that are readily available in an organization being investigated. Therefore, it is imperative to mention that corporate managers in a firm form key strategic leaders and are therefore important players in making decisions. In addition, it is also worth to mention that in the absence of core competences in any organizational setting, it may be quite cumbersome to achieve some of the set goals and objectives.
All decisions they make must be focused on developing effective strategies that will catapult a business to success. As such, in their decisions, they should aim towards exploiting, leveraging, strengthening, maintaining and developing core competencies. Witt and Meyer (2010) note that core competencies in a firm may include organizations functional skills like research and development, finance, marketing and manufacturing. A decision to develop a strategy via exploiting core competencies as Witt and Meyer continue to posit is so as to ensure that a firm does not only produce quality products, but also deliver valuable services and unique benefits to customers.
Exploiting core competencies as a means of developing strategy calls for a kind of leadership which ensures that a firm’s resources are shared equally across all existing units. Elkin (2007) argues that the best and effective core competencies which should be shared needs to be the intangible ones. A strategic leader will understand that intangible competencies are important in the sense that competitors will not be able to see them because they are invisible. Indeed, their invisibility could be because intangible competencies relate to skills and knowledge which employees have. In agreement with Elkin, Capon (2008) argues that strategic leadership will therefore see to it that intangible resources are promoted and shared equally across all units in a firm.
Developing Human Capital
According to Collins (2001), international business has come to a point whereby competition is dictating internal and external relations at all levels. Internally, human capital is increasingly being sought by multinationals as a strategy to drive their production and profitability. While it is possible to outsource human capital from various locations irrespective of geographical differences, it is important to reiterate that such a move is also characterised with its own limitations. For instance, British Airways being a well renown multinational company, is searching for great talents and using all available means to guard them from running to other companies (British Airways, 2011).
To agree with Collins’ view, when talented workers who are a firm’s human capital move from a company to another because of their dissatisfaction, they can easily cause a downfall of their former employer because they understand their strategies and could transfer key secrets to their new employer. This sense of threat has made the British Airways leadership to move an extra mile in developing strategies on human capital through branding its employees and ensuring that they strongly associate with its products (British Airways, 2011).
Development of a firm to a position where it enjoys high performance levels and profitability is an attribute of strategic leadership which focuses on developing human capital. Garratt (2010) points out that human capital is a factor which is made up of a workforce’s skills and knowledge. This forms an organization’s capital resource and is a font of competitive advantage in an organization.
Some of the best strategies of developing human capital as Garratt continues to point out can be achieved through forming development and training programs. The purpose of developing training programs in manager is to construct a vision that is common to a firm, facilitate communication and help build skills. Besides, development programs are critical in promoting cohesion among a workforce, inculcating core values and enhancing social levels.
To concur with the view given by Grant (2008), training and development is perhaps the greatest leadership strategy for human capital management consideration because it enables an organisation to develop particular skills in its workforce that are crucial in their work. Training and development according to Grant acts like a link between a company’s present status and its target by empowering workers with additional abilities. A firm like British Airways strongly emphasizes on training because it amplifies recruited staff skills to international standards (British Airways, 2011).
Through continued training, a workforce remains highly creative and innovative in handling different clients and making crucial decisions when on duty. It is crucial to mention that travelling business is very critical because it calls for great coordination between booking units, cabin crew preparations, pilots operations and destination management. As a result, continued skills development and training plays a critical role of acquainting employees with skills that allow them to perfect such services to consumers.
The leadership strategy to develop human capital in an organization such as British Airways is further tailored towards developing future generation of leaders at the company. This goal has been considered by many analysts as a strategic thinking which aims at developing an important sense of attachment. In essence, this strategy to employees internalizes mechanisms which they could use to improve the company if they were the ones occupying different leadership positions.
Working at British Airways has therefore become a race for the top management positions with workers at lower levels seeking to polish up their talents with an aim of improving their organisation (British Airways, 2011). However, like the authors of Harvard Business Review (2002) notes, a company must embrace a highly democratic model of operation to allow lower level employees to move up the management ladder with ease. Acquired skills are further tested at team level as colleagues (employees) at every department operate in smaller units that give them a chance to contribute more to decision making in the company.
Sustaining a corporate culture that is effective
Most employees share core values, a consideration which has come to be commonly placed under corporate culture. An effective corporate culture according to Hooijberg (2007) encompasses a complex set of shared values, symbols and ideologies which reflects how operations in an organization are conducted. In strategic leadership, sustaining a corporate culture creates a social energy which propels an organization to success.
Therefore, strategic leaders are required to not only develop an appropriate culture, but to also nurture it with an aim of promoting human development and focused learning. Besides, it should be done through promotion of skills and sharing of resources across all business units. Mary Jo Hatch posits in her model of cultural dynamics that a corporate culture that is effective and appropriate creates a link between production of high quality services and products with strategic actions, encourages entrepreneurial spirit for competitiveness and innovation and facilitates fostering of long term visions (Grant, 2008). In addition, it aids in controlling and regulating the behaviors of employees in an organization.
Hughes (2005) points out that sustaining a culture in an organization might be easier than the actual changing of a particular culture. This is attributable to a variety of factors such as resistance to change among workers or a management. Developing a strategy requires a strategic leader to help members of an organization to realize the need to implements organizational cultural changes. Strategically thinking, a leader needs to recognize that to effectively accomplish change there will be a great need to conduct restructuring as this provides adequate time to effect change.
The notion of sustaining a corporate culture in a workplace and performance has remained contentious due to lack of clear outlines of who is indeed more critical in the assimilated results. However, emergent researchers on strategic thinking and leadership indicate that the achievement or collapse of an organization is a shared responsibility and all stakeholders must be held accountable.
As indicated by the need to generate the necessary corporate culture that is effective, Kaplan and Norton (2001) point out that it is the role of strategic leadership in an organization to generate the necessary incentives that rhyme with an organization’s objectives and need for growth and development. In concurrence, Hooijberg (2007) indicates that for effective corporate culture to be attained, an organization’s strategic leader be able to assess and evaluate the ability of the organization to sustain the proposed incentives and the impacts that will be assimilated by in it. On the other hand, a workforce as Kaplan and Norton (2001) continue to emphasize must employ the necessary creativity that culminates to high productivity and ultimate better corporate performance.
Determining Strategic Direction
Lawler and Worley (2006) argue that developing visions that are long term oriented is one of the key strategic thinking and effective leadership methods. Having a long term vision gives a firm enough time to meet its goals. As a strategy, it reflects Hamel and Prahald’s view in their model of strategic intent. In it, Hamel and Prahald argue that a long term vision is a strategic intent which is aimed at leveraging core competencies, capabilities and internal resources a firm has in order to accomplish unattainable goals a competitive market environment presents. It is important to point out that to employees, determining a strategic direction provides employees with an opportunity to enhance their commitment and personal effort.
On the same breath, Strategic scholars point out that while strategic intent is crucial for higher levels of performance, its effects can only be realized when employees in an organization show commitment to a vision or a specific performance criterion. In agreement Mintzberg et al (2003) indicate that employees must fervently believe in a leader’s vision of an organization. Besides, they must also fervently believe in an industry and its products. Many firms such as the British Airways, Xerox, Microsoft and Canon believe in strategic intent and use it among other strategies to propel their employees to work harder than their competitors (British Airways, 2011).
Research on strategic leadership points out that to effect strategic direction, a leader needs to set a vision that focuses on a future period of about ten years and above (Pearce & Robinson, 2009). The importance of a long term vision as a strategic intent is the fact that it gives leaders time to plan, set effective control and information systems. Some of the companies that have long term include Boeing which has a15-20 years focus while Toyota’s strategic direction is under a 100-year plan (Pearce & Robinson, 2009).
Emphasizing Ethical Practices
Strategic leadership and thinking calls for leaders in an organization to emphasize ethical practices and perhaps infuse them in the culture their organization have. Long term influences in an organization are sources of principles which can be utilized to set ethics which guide the behavior of employees. Mintzberg, Ahlstrand and Lampel (1998) view emphasizing ethical practices as a means of controlling and shaping the behavior of managers and employees in an organization as a crucial concept in driving business growth. Therefore, Mintzberg, Ahlstrand and Lampel indicate that this is an important strategic leadership and thinking practice that plays a significant role of guiding an organization’s strategic goals and long term vision for sustainability.
Establishing Strategic Control
In order for organizations to achieve appropriate outcomes, its strategic actions which different business within it implement must be controlled. Mulgan (2009) points out that establishing strategic control is a leadership practice which targets enhancing a balance in performance and elevated results. It is worth noting at this point that even though many organizations have effective strategic actions, lack of strategic control denies them better results in their operations. One such area where massive failures occur is the financial department where lack of strategic control may cause unfavorable economic conditions, inflations and high interest rates.
Strategic leadership and thinking is crucial in this case as it will encourage decision making to be carried out by lower level managers, a factor that will ensure incorporation of acceptable and moderate risk levels. Mulgan (2009) points out that most organization most organizations have a refocus design in their corporate restructuring actions. The refocus becomes a strategic control tool which executives of the firms use to reestablish the required control of business department.
Achieving strategic control according to Mintzberg, Ahlstrand and Lampel (1998) can be through appropriate integration of autonomy among different business units as this will in their respective markets aid them in winning against their competitors. Besides, strategic leaders should encourage sharing of intangible and tangible resources equally in a corporate portfolio.
Strategic processes and involvement of workers
Strategic processes according to Mintzberg et al (2003) encompass top level decision making processes in an organization. Strategic decision making is crucial for determining the functioning of the structure of an organization. Analysts indicate that since strategic processes require intellectual capabilities of high degrees, human brain of sharp and strategic managers can be used. However, in certain instances where there will be multiple sources of data which may cause complex and challenging problems.
Indeed, strategic process is all about making important decisions, a factor that happens when various and diverse data from within and without an organization have been collected. Determining the credibility and relevance of data may be cumbersome and may lead to incorrect decision making caused by uncertainties. Besides, even in the presence of actionable information, a management may not be in a position to determine the payoffs. In addition, converting data to relevant information requires skills and expertise.
The above argument points towards strategic thinking and leadership which not only make careful decision, but that which involves technology and employees in decision making process. Mintzberg, Ahlstrand and Lampel (1998) indicate that the old practice whereby company executives were the only individuals involved in making decisions has been replaced by the modernistic method of employee and information systems involvement. The use of operating systems is now considered as a strategic move by leaders and a progress in decision making as it involves all entities in the organization in making decisions.
This strategic process involves all units in an organization and makes it easier to achieve organizational goals. In concurrence, Mintzberg et al (2003) posits that the sole objective of being strategic in decision making by involving processing systems and workers is the ability to mitigate risks associated with poor decisions which can gravely affect a company’ current and future operation. This also reflects the position taken by Kaplan and Norton (2001) who argue that involving all entities in decision making ensures that all important aspects are covered as views from workers and business units are laid down. This aids in aligning decisions to fit in accordance with organizational needs.
Involving employees in decision making processes
Employee involvement in strategic processes to agree with the view given by Witt and Meyer(2010) creates a sense of attachment and feeling of identity by all stakeholders in their work. It indeed prevents an organization from making decisions which are geared towards meeting specific needs of a unit or bias as an entire organization is represented. How can this be achieved? A strategic leadership is required to play the role of drawing employees closer to them and ensure they are part of the main decision making stream.
Though British Airways has been accused of maintaining a high hierarchy in its management, it strongly promotes use of teams especially at departmental level in making key decisions (British Airways, 2011). During flights operations, employees are fully in charge and responsible of immediate decisions they make. Besides, teams at departmental level are strongly used by the management in generating key decisions and addressing key issues. As it was indicated earlier in this paper, involvement of employees in making key decisions carefully nurtures and prepares them for later leadership at the company.
Every year, the company involves its employees in the responsible colleague program that allows employees to voice their sentiments on different issues at the company. While this method has been publicized so much by the company because it allows workers to come in and suggest major issues in the company, its success rate has only been 35%. British Airways must therefore redefine its continued relations with its employees to create a sense of good will and involvement at all levels (British Airways, 2011).
A good consideration at this point is strengthening of interdepartmental teams and reducing the organizational hierarchy to allow employees air their sentiments with confidence. Besides, to agree with Mulgan (2009), a company should make communication an ongoing event by encouraging employees to cite areas of development anytime of their work as opposed to doing it only once a year. This would make the company highly flexible in responding.
Strategy, change and innovation
A combination of strategic leadership, change and innovation remains some of the surest ways which ensure that organizations are responsive to the market through continued progress of their production system as well as human resources output. Change management and innovation created by a strategic leadership act like a strong force that continuously reenergizes a workforce, refreshes an organization’s system and takes an organization to a higher level.
However, while this change management is reflected as one of the most important factors for continued business productivity and profitability, Lawler and Worley (2006) indicate that without strategic leadership it becomes one of the most difficult things to achieve in any organizations. Even with massive studies directed at re-evaluating change management, most often than not, managements without strategic thinking achieve minimally in their efforts to attain new heights.
Following a long period of continued profitability, the management of British Airways saw an emerging organizational threat that required it to restructure itself strategically to counter emerging uncertainties (British Airways, 2011). As such, it centered its strategies on innovation and a strong change process which aimed at decentralizing its structures and creating newer units in its operations to accelerate growth.
The change process involved creation of a new Office of strategy and growth that would link the external demands to drive creativity internally and produce products with greater appeal to the market (British Airways, 2011). The change process therefore involved all departments because the new units would liaise with the existing structures and work together in new products designing, relay of consumer feedbacks and reevaluation of progress in respective areas of specialization.
The ability to cite the need for change and innovation, address inherent resistance and facilitate its articulation, acts as the main platform for an organization’s ability to achieve its strategic goals and mission for sustainability. In a business organization, Lawler and Worley (2006) indicate that the highly dynamic and changing trends of variant operations call for key changes and massive innovations for greater efficiencies in product and services delivery.
Modern scholars indicate that the only permanent aspect of management on an organization is change. Augmenting this consideration, Kurt Lewin’s model of refreezing and freezing presents all organizations as having enough potential for change, strategic leadership and innovation either to address their negative considerations or further enhance their positive outcomes (Kaplan & Norton, 2001).
In his model of organization change, Kurt Lewin indicated that there is need to cite the need for change (refreezing) before shifting to seek change in an organization. Under this model, it becomes clear that both the internal consideration and external factors demands key changes after which they refreeze to implement them. Besides, it reflects the connection that exists between strategic leadership, change management and innovation.
The role of strategic leadership in creating change and bringing innovation sprouts from various driving forces which compel organizations to seek intrinsic outsets for improvements. Witt and Meyer (2010) complement this by quoting Kurt Lewin’s model of organization change where refreezing must be anchored on a strong force to facilitate re-evaluation and acceptance of the resultant implementable ideology. Therefore, a driving force in the practice of strategic leadership and thinking should be based on both internal and external orientations.
Effecting strategic thinking and leadership in an organization requires understanding that the ability of an organization to succeed is dependent on the stricture that which a leader assimilate in management. It is from this consideration that Mulgan (2009) recommends that the efficiency of a management be anchored on change and progress. Besides, leadership strategies which can stimulate innovation and incorporate new cultures need to be articulated to bring the necessary changes. CEOs should assimilate a hierarchical and lateral system where the top management of an organization would be able to communicate with the lower level employees without delays to emphasize on the need for high productivity.
To enhance the ability of an organization to increase productivity, there is need for a strategic leader to empower workers by increasing their autonomy and further promoting their decision making capacities. A system should be set which emphasizes on work accountability and the need to reduce costs of production while increasing the value of the products to consumers.
Of greater importance, a new inclusive innovative structure should be established to promote communication between the management and lower level workers, a consideration that has been cited to have major positive affect for being able to pro-actively identify variant problems that affect the organization and generating the best solutions. The structure to be assimilated should also include team operations at all levels of the organization management. This strategy will enhance the ability leaders and workers to consult and come up with decisions mostly from departmental and sub-departmental sections in a company. Though this model has been widely criticized, it has brought strong positive results that have contributed to the present high levels of profitability in British airways.
To sum up, it is clear from the above discussion that strategic thinking and leadership are some of the most fundamental elements which provide an organization with direction and vision. Developing strategies requires that managers employ strong systems of control for their companies in order to enhance objectivity. Besides, managing change and creating innovations is an important component of strategic leadership aimed at restructuring organizational operations. The paper has concluded by recommending that it is critical for organizations’ leadership and management to ensure that the need for change is well communicated and accruing benefits to be well distributed in all departments as part and parcel of improving the entire organization.
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