What Is the Meaning of Strategic Leadership in Business?

Leadership in business means more than living for today.

According to The Center for Management and Organizational Effectiveness, the true meaning of strategic leadership is "nothing more than the ability to anticipate, prepare, and get positioned for the future. It is the ability to mobilize and focus resources and energy on things that make a difference and will position you for success in the future." Effective strategic leadership focuses on the long term rather than solely on the short term.

The Cost of Short-Term Thinking

According to an article on short-term thinking by Edward Gracia, senior manager with Deloitte MCS, Strategy & Operations in London, "A competitive market tends to create a wide difference between the payoffs for 'winners' and 'losers': what we call a 'winner-take-all' system. Thus, with such high stakes depending on every next move, there is a strong incentive for companies and individuals to focus on just winning the next round, i.e., to think short-term regardless of the impact on the business' long-term viability." This approach to decision making might increase the need for strategic leaders in business.

Bringing People Together

Leadership brings employees together to achieve certain objectives, such as meeting sales and revenue goals, retaining good employees, providing excellent customer service or making profits for investors. In order to perform well, an organization must have a vision and the energy to propel performance. Leaders need to develop a compelling business purpose that makes sense and brings people together.

Gaining the Commitment for Growth

Businesses rely on the leader's skills, knowledge, education, ability to persuade and sense of purpose to direct the company into the future. Leaders must not only get people (senior managers, supervisors, managers, stockholders) together, but must convince them of the compelling sense of purpose. Strategic leadership requires the ability to achieve levels of commitment and common goals for the future growth of the company.

Building the Culture

Shifting from short-term thinking to creating a vision for the future requires good people skills in order to change the mind set of those who are accustomed to thinking too much about a to-do list, or scheduling everything on an hour-by-hour basis. Getting employees together, brainstorming, inviting suggestions and determining a common path to a better future business are priorities for a strategic leader. A leader challenges old ways of thinking and doing things, and elicits fresh ideas.

Building Trust

A strategic leader might need a few wins to establish trust and credibility, especially if the previous culture included violations of trust. Talking the talk and modeling the behaviors are two different things. Strategic leaders recognize the need to find a common ground with open door policies, respect for the ideas of others, follow-through with commitments, and working side by side with employees.

References

• Center for Management and Organizaiton Effectiveness: Strategic Leadership in Business
• Westga: Corporate Short-Term Thinking and the Winner Take All Market