Building a culture that encourages strategic thinking.

Author:Goldman, Ellen F.
 
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Abstract

The ability to think strategically is critical for leaders and managers at multiple organizational levels. Specific work experiences can contribute to the development of an individual's strategic thinking ability. Culture, among other organizational factors, can either encourage or limit those contributions. Leaders, as culture constructors and transformers, can act to maximize the relationship between organizational culture and the process of learning to think strategically. A cadre of formal training, developmental activities, and self-directed learning initiatives can provide leaders with the skills to enhance the strategic thinking of those they lead.

Keywords

strategic thinking, management learning, leadership development, organizational culture

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"Culture eats strategy for lunch." This management truism is linked to examples of how strategy failed, acknowledging that actions attempted were inconsistent with the organization's values, beliefs, and assumptions (Weeks, 2006). The strategy-eating potential of culture has been used as the basis for recommending that leaders initiate large-scale change efforts to align culture with strategy. However, it has long been recognized that culture can also severely restrict the strategy selected to begin with, because of the myopia of shared beliefs among decision makers regarding the organization's goals, competencies, and environment (Lorsch, 1985). Moreover, shared assumptions about the organization's core mission can limit not only the strategy but also the vision (Schein, 2004). Thus, one of the most basic elements in any theory of leadership roles--establishing vision (Sashkin & Sashkin, 2003)--is inhibited unless the thinking used to develop it, strategic thinking (Heracleous, 1998), is encouraged by the organization's culture.

Strategic thinking is recognized as an individual ability (Hanford, 1995; Liedtka, 1998; Mintzberg, 1978), yet we know relatively little about its development. Limited work has been done addressing individual, group, and contextual factors contributing to strategic thinking, although a few frameworks and developmental models have been proposed (Bonn, 2005; Casey & Goldman, 2010). Not considered in depth are the importance of organizational factors and how leaders might influence these factors to cultivate strategic thinking across the organization. This article builds on a dynamic model of how strategic thinking develops. We explore culture and other related organizational factors that influence the process of learning to think strategically. Strategies that leaders can employ to influence these factors are proposed. Approaches for educating new leaders and managers in relation to the application of these approaches are discussed.

Strategic Aspects of Leadership

As an influencing process, leadership is described as being purpose driven and resulting in vision-inspired change (Antonakis, Cianciolo, & Sternberg, 2004). Across theories, vision stands as the most common important element of approaches to transformational leadership (Sashkin & Sashkin, 2003). The Sashkins (2003) noted that various theorists (e.g., Bass; Bennis and Nanus; Conger and Kanungo; House; Jaques; Kotter and Heskett; Kouzes and Posner) indicate that leaders are required to develop a vision, articulate and inspire communication of a vision, and manage followers' attention through vision.

The limitations of focusing on having and communicating a vision (alone) were discussed by strategy theorists Mintzberg, Ahlstrand, and Lampel (1998) in their identification of the "entrepreneurial school" as one of 10 ways of developing organizational strategy. They described the entrepreneurial school as being preoccupied with vision development and visionary leadership as an antidote to the failures of strategic planning: "Every self-respecting organization suddenly had to establish a vision" (p. 136). This focus disregards the depth and difficulty of strategic thinking, noted by Mintzberg (1994) as "an immensely complex process, which involves the most sophisticated, subtle, and at times, subconscious elements of human thinking" (p. 111). Research on managers who derail supports Mintzberg's view: Those who fail do so because of personal factors, including their inability to shift from a technical to a strategic focus (Yukl, 2006).

The recent attention to "strategic leadership" reflects the desire to better understand how executives shift not just their own focus but also that of the entire organization and, in so doing, transform the entity (Yukl, 2006). Strategic leadership is described as the thinking, acting, and influence of individuals and teams to advance the competitive advantage of the organization (Hughes & Beatty, 2005). This type of leadership is differentiated from "regular" leadership by being broader in scope--to include the organization and its external relationships--and more pervasive and longer lasting in its impact. Research on strategic leadership is described as limited and has been criticized for focusing on demographic variables over underlying causal ones (Antonakis et al., 2004).

Yukl (2006) suggested that the main behaviors of strategic leadership are monitoring the environment and formulating strategy; others have added communication, organizational alignment, and monitoring of outcomes to the requisite actions (Avolio, 2005; Hughes & Beatty, 2005; Pisapia, 2009). Numerous leadership assessment tools are promoted as measuring individual "strategic" leadership abilities; however, on inspection, they are focused only on communication to inspire a vision and/or having a plan to implement it (Goldman, 2005). Although communications skills will help leaders implement strategy, such skills alone without requisite cognitive abilities are insufficient for crafting the strategy to be implemented.

The behaviors that leadership theorists have identified as required for strategic leaders bear striking resemblance to activities involved in strategic planning and strategic management processes as described in the strategy literature (e.g., Andrews, 1971; Eden & Ackermann, 1998; Steiner, Miner, & Gray, 1982). The past 30+ years of strategy research has explored the nature and practices related to strategy development and the strategic decision-making process, including the influence of power and politics and the role of chance (Bonn, 2005). The strategy literature has focused on singular events versus longitudinal learning and largely concerns detractors from thorough decision making (e.g., perceptual filtering) rather than developers of strategic thinking (Porac & Thomas, 2002).

Thus, what we know about strategic leadership relates to two of its three dimensions--"acting and influence"--as defined by Hughes and Beatty (2005). There is a gap in what we know about "thinking."

Strategic Thinking in Organizations

In addition to the deficit in the literature regarding strategic thinking, there is a gap in practice. Top leaders' absence of strategic thinking has been identified as a major detractor of firm performance in studies across industries and countries (Bonn, 2001; Essery, 2002; Mason, 1986; Zabriskie & Huellmantel, 1991). There is concern that this gap will continue: Bonn (2005) noted that strategic thinking was identified by a panel of experts as one of the 10 most critical areas for future management research. In addition, both leadership and strategy theorists have indicated that strategic thinking is needed at multiple organizational levels. According to Wheatley (2006), the need for information and thinking skills that were once the purview of top leaders is moving deeper into organizations, as everyone needs to be able to interpret complex information and create their own realities. Newer theories of strategy making that focus on organizations' processes and routines also indicate that strategic thinking is useful to those working close to the customer (Floyd & Wooldridge, 2000; Johnson, Melin, & Whittington, 2003).

The strategic thinking gap is due to a lack of understanding of the concept overall (Bonn, 2001; Liedtka, 1998; Mintzberg, 1994) and limited development of it among organizational leaders (Bonn, 2005). Practitioners and theorists wrongly use the terms strategic thinking, strategic planning, and strategic management interchangeably. This has resulted in significant historical confusion in the literature, with the aforementioned terms being used not only as substitutes but also as both nouns and verbs (Steiner et al., 1982).

Strategic thinking has been recognized as an individual activity influenced by the context within which it takes place (Liedtka, 1998). The literature contains no singular definition; based on our review, we define it as conceptual, systems-oriented, directional, and opportunistic thinking (Hanford, 1995; Liedtka, 1998; Mintzberg, 1978) leading to the discovery of novel, imaginative organizational strategies (Heracleous, 1998). The development of an individual's ability to think strategically requires an understanding of what happens during the strategic thinking process as well as the contributing factors. We have suggested a developmental model based on research with practitioners and theories of strategy, expertise development, adult learning, and the "learning school" of strategy making (Mintzberg et al., 1998). The antecedents of our model as well as the model itself have been described in previous publications (Casey & Goldman, 2010; Goldman, 2007, 2008b). A brief overview is provided here; the parts of the model are shown in Figure 1.

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We suggest that the development of an individual's ability to think strategically is a dynamic, interactive, and iterative experiential learning process (Casey & Goldman, 2010). Consistent with Mintzberg et al.'s (1998) "learning school," strategy emerges as it is developed through a "messy process of informal learning" (Mintzberg, 1994...

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