The following is a guest piece by Jessica Leitch, David Lancefield, and Mark Dawson; writing for TaveerNasseer.com.
Most companies have leaders with the strong operational skills needed to maintain the status quo. But they are facing a critical deficit: They lack people with the know-how, experience, and confidence required to tackle “wicked problems.” Such problems can’t be solved by a single command, they have causes that seem incomprehensible and solutions that seem uncertain, and they often require companies to transform the way they do business.
A 2015 PwC study of 6,000 senior executives, conducted using a research methodology developed by David Rooke of Harthill Consulting and William Torbert of Boston University, revealed just how pervasive this shortfall is: Only 8 percent of the respondents turned out to be strategic leaders, or those effective at leading transformations.
Fortunately, companies can build the capacity for strategic leadership. The following 10 principles can help unlock potential strategic leaders in your enterprise. These principles represent a combination of organizational systems and individual capabilities — the hardware and software of transformation.
You may have already adopted some of these tenets, and think that’s enough. But only when you implement all of them together, as a single system, will they enable you to attract, develop, and retain the strategic leaders who’ve eluded you thus far.
Systems and Structures The first three principles of strategic leadership involve nontraditional but highly effective approaches to decision making, transparency, and innovation.
1. Distribute responsibility Strategic leaders gain their skill through practice, and practice requires a fair amount of autonomy. Top leaders should push power downward, across the organization, empowering people at all levels to make decisions.
Distribution of responsibility gives potential strategic leaders the opportunity to see what happens when they take risks. It also increases the collective intelligence, adaptability, and resilience of the organization over time, by harnessing the wisdom of those outside the traditional decision-making hierarchy.
2. Be honest and open about information Transparency fosters conversation about the meaning of information and the improvement of everyday practices. Strategic leaders know that the real power in information comes not from hoarding it, but from using it to find and create new opportunities for growth.
When information is released to specific individuals only on a need-to-know basis, people have to guess what factors are significant to the strategy of the enterprise. Moreover, when people lack information, it undermines their confidence in challenging a leader or proposing an idea that differs from that of their leader. Some competitive secrets may need to remain hidden, but employees need a broad base of information if they are to become strategic leaders.
That is one of the principles behind “open-book management“, the systematic sharing of information about the nature of the enterprise. Among the companies that use this practice are Southwest Airlines, Harley-Davidson, and Whole Foods Market, which have all enjoyed sustained growth after adopting explicit practices of transparency.
3. Create multiple paths for raising and testing ideas Developing and presenting ideas is a key skill for strategic leaders. Even more important is the ability to connect their ideas to the way the enterprise creates value. By setting up ways for people to bring their innovative thinking to the surface, you can help them learn to make the most of their own creativity.
This approach clearly differs from that of traditional cultures, in which the common channel for new ideas is limited to an individual’s direct manager. The manager may not appreciate the value in the idea, blocking it from going forward and stifling the innovator’s enthusiasm. Instead, create a variety of channels for innovative thinking.
Some might be cross-functional forums, in which people can present ideas to a group of like-minded peers. Reverse mentoring — in which younger staff members share their knowledge of new technology with a more established staff member — can also be effective.
People, Policies, and Practices The next four principles involve unconventional ways of thinking about assessment, hiring, and training.
4. Make it safe to fail Big failures are simply unacceptable within most organizations. You must enshrine acceptance of failure — and willingness to admit failure early — in the practices and processes of the company, including the appraisal and promotion processes.
For example, return-on-investment calculations need to assess results in a way that reflects the agreed-upon objectives, which may have been deliberately designed to include risk. Strategic leaders cannot learn only from efforts that succeed; they need to recognize the types of failures that turn into successes. They also need to learn how to manage the tensions associated with uncertainty, and how to recover from failure to try new ventures again.
Some organizations have begun to embrace failure as an important part of their employees’ development. The Bill & Melinda Gates Foundation and the U.K.-based innovation charity Nesta have held “failure fests,” at which employees discuss decisions that went wrong and derive lessons from them.
In addition to establishing such forums, you can provide managers with opportunities to oversee smaller change initiatives, some of which may not work out, to develop the skills they’ll need to lead larger-scale transformations.