In June 2016, Australia reached an important milestone: 25 years of continuous economic growth. Unless there’s a radical change in direction, it’s unlikely we’ll be celebrating a further 25 years in 2041. All the main indicators show that our economy is slowing down. With social, political and technological disruption impacting markets around the world, challenging times lie ahead for Australia.
Global disruption expert David Roberts of Singularity University suggests that by 2026, 40% of the S&P Top 500 companies will be gone. This led me to think about the kind of leadership we need to steer Australia astutely through the next ten years.
In my previous article, I addressed the need for more innovative leadership. Now, I’m turning the spotlight on why private and public sector leaders must become more strategic. For some enterprises, being at the cutting edge of innovation will be their saviour. For others, strategy will be a critical differentiator for success.
Why does strategic thinking matter?
Good leadership relies on making good choices, and strategy guides those choices. From daily decisions to the inevitable sliding door moment, creating a clear vision and direction, and being able to align decisions with them, is an essentials skillset for a successful CEO.
Focusing on strategy provides leaders with a clarity of purpose that increases the chance of a successful outcome. If they can embed the company strategy across the whole enterprise, their managers and staff will also make strategic decisions that support growth.
Being able to harness the power of strategy to drive your business forward is always desirable. However, when the winds of change are blowing a gale, doubling down on strategy is essential. I recently contributed to a white paper that’s very clear about the central role that strategy should play when CEOs are making choices about where and how to compete in changing times.
If you want to lead an organisation that thrives in a declining economy, your organisation’s leaders need to develop the ten strategic capabilities I’ve outlined. In my experience, most leadership development programs aren’t always aligned with this need.
They also tend to focus on the top leaders rather than emerging talent. Investing in developing strong strategic capabilities early on not only ensures more effective decision-making at middle-management level; it also provides a pipeline of future leaders for whom thinking strategically is second nature.
In my opinion, there’s too little connection between traditional programs and strategic intent in our leadership development industry. If Australia is to be the lucky country once again, that needs to change.
10 strategic capabilities growth leaders should develop:
Being constantly on the lookout for opportunities. I like to take leadership development clients to overseas markets so they can learn first-hand about new ideas and seek out different opinions that might influence their strategy development.
Strategic clarity that supports clear thinking and eliminates white noise and doubt, so that decisions are strategically aligned and not driven by emotion or instinct.
Customer Curiosity that regularly takes leaders into the marketplace, so they get close to customers themselves rather than receiving customer insights from others.
Understanding the power of analytics
Understanding the power of analytics, which means knowing how to leverage data insights to create growth-focused strategy and make effective decisions.
Co-creation capabilities that enable collaboration with customers and employees to make bold, innovative decisions.
Strategic partnering capabilities
So we have leaders who understand the strategic benefits and disadvantages of different kinds of partnerships and can select the right model for their organisation’s growth plans.
Personal leadership that is authentic, empathetic and self-aware, and infuses the whole enterprise with the ambition, energy and enthusiasm to grow.
Culture-building capabilities that create an environment that supports the company’s strategic priorities and attracts the necessary talent.
Change capabilities, which is about leading a widespread mindset and energy around change, not building complex change processes. I particularly like Chipp Heath’s “Switch” approach to the psychology of change. He recommends that, rather than benchmarking against peers, it’s better to find the positives that already work in your own business and build momentum from them.
Leverage collective thinking
to get advice about strategic options. Australian research shows that more than 60% of leaders never do this, so they miss out on potential value-creating options