Strategic leadership is concerned with managing a company's resources, including its strategy-making process, to create and sustain competitive advantage. An increased interest in strategic leadership reflects the need to understand how executives respond to rapid technological and social change and increasing international competition to lead their companies and outperform competition.
There are three important responsibilities for strategic leadership in an organization: (1) monitoring the external environment to identify threats and opportunities, (2) formulating strategy, and (3) implementing the strategy for the future prosperity of the organization. (Narayanan, Zane, & Kemerer, 2011; Porter, 1980).
The following guidelines are based on research and practitioner insights (Bennis & Nanus, 1985; Kotter, 1996; Nanus, 1992; Narayanan, Zane, & Kemerer, 2011; Wall & Wall, 1995; Worley, Hitchin, & Ross, 1996):
- Determine long-term objectives and priorities.
- Learn what clients and customers need and want.
- Learn about the products and activities of competitors.
- Assess current strengths and weaknesses.
- Identify core competencies.
- Evaluate the need for a major change in strategy.
- Identify promising strategies.
- Evaluate the likely outcomes of a strategy.
- Involve other executives in selecting a strategy.
These guidelines focus on understanding the environment that determines need for strategic change, the performance determinants, and ways leaders can influence these performance determinants (Cannella & Monroe, 1997). "The theory and research on leadership has long recognized that effective leaders empower others to participate in the process of interpreting events, solving problems, and making decisions" (Argyris, 1964; Likert, 1967).
Events and industry trends are often not well defined. They pose multiple alternatives and choices. Successful strategic leadership, therefore, requires ability to manage ambivalence and to give an organization a sense of direction. Leaders create a clear and compelling vision of where the organization should go, and energize people by eloquently communicating this vision to make it a part of the organization culture (Wesley & Mintzberg, 1989).
Argyris, C. (1964). Integrating the individual and the organization. New York: John Wiley.
Bennis, W. G., & Nanus, B. (1985). Leaders: The strategies for taking charge. New York: Harper & Row.
Cannella, A. A., Jr., & Monroe, M. J. (1997). Contrasting perspectives on strategic leaders: Toward a more realistic view of top managers. Journal of Management, 23(3), 213–237.
Kotter, J. P. (1996). Leading change. Boston: Harvard Business School Press.
Likert, R. (1967). The human organization: Its management and value. New York: McGraw-Hill.
Nanus, B. (1992). Visionary leadership: Creating a compelling sense of direction for your organization. San Francisco: Jossey-Bass.
Narayanan, V. K., Zane, L. J., & Kemerer, B. (2011). The cognitive perspective in strategy: An integrative review. Journal of Management, 37, 305–351.
Porter, M. E. (1980). Competitive strategy. New York: Free Press.
Wall, S. J., & Wall, S. R. (1995). The new strategists: Creating leaders at all levels. New York: Free Press.
Worley, C. G., Hitchin, D. E., & Ross, W. L. (1996). Integrated strategic change: How OD builds competitive advantage. Reading, MA: Addison-Wesley.