01_968676_ffirs.qxd 1/4/05 4:19 PM Page v Becoming a Strategic Leader Your Role in Your Organization’s Enduring Success Richard L. Hughes Katherine Colarelli Beatty 01_968676_ffirs.qxd 1/4/05 4:19 PM Page vi Copyright © 2005 by John Wiley & Sons, Inc. All rights reserved. Published by Jossey-Bass A Wiley Imprint 989 Market Street, San Francisco, CA 94103-1741 www.josseybass.com No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-750-4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, e-mail: [email protected]. Jossey-Bass books and products are available through most bookstores. To contact Jossey-Bass directly call our Customer Care Department within the U.S. at 800-956-7739, outside the U.S. at 317-572-3986, or fax 317-572-4002. Jossey-Bass also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Library of Congress Cataloging-in-Publication Data Hughes, Richard L. Becoming a strategic leader : your role in your organization’s enduring success / by Richard L. Hughes, Katherine Colarelli Beatty. p. cm.—(Jossey-Bass business & management series) Includes bibliographical references and index. ISBN 0-7879-6867-6 (alk. paper) 1. Leadership. 2. Strategic planning. 3. Organizational effectiveness. 4. Success in business. I. Beatty, Katherine Colarelli, 1965- II. Title. III. Series. HD57.7.H84 2005 658.4’092—dc22 2004025830 Printed in the United States of America FIRST EDITION HB Printing 10 9 8 7 6 5 4 3 2 1 01_968676_ffirs.qxd 1/4/05 4:19 PM Page vii A Joint Publication of The Jossey-Bass Business & Management Series and The Center for Creative Leadership 02_968676_ftoc.qxd 1/4/05 2:07 PM Page ix Contents Preface xi Acknowledgments xv The Authors xvii Introduction 1 1. What Is Strategic Leadership? 7 2. Strategic Thinking 43 3. Strategic Acting 83 4. Strategic Influence 123 5. Strategic Leadership Teams 167 6. Making Strategy a Learning Process in Your Organization 193 7. Becoming a Strategic Leader 215 Appendix A: Strategic Driver Paired-Voting Form 229 Appendix B: STRAT: Strategic Team Review and Action Tool 231 Appendix C: STRAT Items and the Learning Process 235 02_968676_ftoc.qxd 1/4/05 2:07 PM Page x x CONTENTS Appendix D: Using STRAT to Develop Your SLT 237 Appendix E: STRAT Norm Data 245 References 249 Index 253 About the Center for Creative Leadership 265 03_968676_flast.qxd 1/4/05 2:13 PM Page xi Preface We’ve worked together for eight years at the Center for Creative Leadership, and the focus of our work has been developing the strategic leadership of individual executives and their teams. Dur- ing that time we have worked personally with nearly a thousand different managers and executives—sometimes with heterogeneous groups from different companies, and sometimes with groups from the same company. Most often, that work has been in the context of a program called Developing the Strategic Leader (DSL). We’ve had the op- portunity to work with the DSL executives as they’ve struggled to become better strategic leaders. Weathering this challenge alongside them has deepened our own understanding about how to become more strategic. In a general sense, this book reflects our attempt to put some of the lessons of that program and what we have learned through our work in it into a more explicit and accessible format. One thing we have gained from this work is greater clarity about the challenges managers and executives face in becoming more effective strategic leaders. Our understanding has come in part from what executives themselves tell us about their challenges, which typically fall into the following broad categories: influencing others more effectively, particularly upwardly and outwardly; think- ing strategically; achieving a better balance in handling short-term and long-term pressures; moving from a functional or departmen- tal perspective to a broader organizational perspective; and actually creating or influencing organizational strategy. xi 03_968676_flast.qxd 1/4/05 2:13 PM Page xii xii PREFACE Another thing we’ve gained from this work is an appreciation of how the nature of strategic leadership in organizations is chang- ing, which is reflected in the people who describe these challenges to us. Specifically, we are finding that managers and executives at many levels and across many functions are signing up to improve their effectiveness as strategic leaders. For example, only about 8 percent of DSL participants represent the top leadership of their organizations; 48 percent are executives, 39 percent are from upper- middle management, and 5 percent are from middle management. What does it mean to find such a broad spectrum of managers and executives intent on developing their effectiveness as strategic leaders? We believe it’s more than just proactive preparation for future responsibilities. We believe it reflects something fundamen- tal about how strategic leadership itself is changing—that strategic leadership is now the responsibility of many people, not just those at the top. The challenges we discuss represent what managers and execu- tives are struggling with now, not theoretical challenges they might confront in the future. In that regard, the list presents to us a fairly reasonable outline of what it means to be strategic. True, it is only a rather sparse outline. An important part of what we have learned over the years is how to help managers and executives add depth as well as breadth to this outline, in ways tailored to their unique de- velopment needs and circumstances. We’ve also learned a lot about what facilitates the development of strategic leadership, especially how the understanding and practice of strategic leadership evolves in an environment that plays host to an ongoing interplay of ac- tion, observation, and reflection. Over time, we have also come to appreciate a certain connected- ness between the kinds of experiences that facilitate the development of strategic leadership and those that facilitate the ongoing develop- ment, implementation, and refinement of organizational strategy itself. Both have everything to do with viewing strategy as a learning process, an idea that is central to this book. Part of becoming an effec- 03_968676_flast.qxd 1/4/05 2:13 PM Page xiii PREFACE xiii tive strategic leader involves facilitating that process throughout the organization (or one’s part of it). Our title, Becoming a Strategic Leader, underscores a central les- son we’ve learned in this work: that strategic leadership is about becoming. It’s about a process of never-ending individual, team, and organizational learning. Working at CCL and with the DSL pro- gram has been a privilege, in particular because of the opportunity we have had to help so many individuals play a more effective role in the strategic leadership of their organizations. We hope our in- sights from that work, captured here as best we can, will help them continue that process—and will reach new audiences as well. Colorado Springs, Colorado Richard L. Hughes December 2004 Katherine Colarelli Beatty 03_968676_flast.qxd 1/4/05 2:13 PM Page xv Acknowledgments This book represents the contributions of many people over many years, and we’d like to acknowledge our debt to them here. Our ideas about strategic leadership have been largely formu- lated in the context of our work in CCL’s Developing the Strategic Leader (DSL) program. We’ve learned much from executives par- ticipating in the program, and we’ve learned equally from our col- leagues on the DSL faculty, who have enriched our understanding of the nature of strategic leadership. We are particularly indebted to fellow faculty members Kevin Asbjörnson, Stephanie Trovas, Laura Quinn, Pam Shipp, Ted Grubb, Dennis Lindoerfer, Gary Rhodes, Bruce Byington, Jessica Baltes, and Chuck Hinkle for their insight, savvy, generosity, and comradeship. Some of our colleagues contributed in unique ways. Bruce Bying- ton was an indispensable collaborator in helping us formulate and refine our understanding of strategy as a learning process, the frame- work on which this book is based. Jessica Baltes had many responsi- bilities in the DSL program, including an invaluable role in guiding the DSL research effort cited throughout the book. Judith Steed, Dennis Lindoerfer, Laura Quinn, and Cory Stern also helped signifi- cantly in the DSL research effort. We are indebted to John McGuire for his contributions to our appreciating the role of culture in leadership strategy. We are indebted to Patricia O’Connor, Jennifer Martineau, and Davida Sharpe, whose impressive work with Catholic Healthcare Partners is highlighted in several chapters. Chuck Palus and David Horth’s work on creative com- petencies had a significant impact on our own approach to strategic xv