Developing Strategic Thinking Skills: The Pathway to the Top

Developing Your Strategic Thinking Skills

It is a tale as old as time: a qualified candidate is ready to be promoted, but it never seems to happen. What if this common problem that leaders experience could be solved with one overlooked leadership quality?

If you want to ensure that you will be considered for higher-level positions, I suggest you focus on developing strategic thinking skills. In addition, you ought to consider how well you transmit your interest in your organization’s strategy to those around you.

Zenger Folkman’s research confirms that others’ perceptions of poor or absent skills in thinking strategically could be a significant anchor holding you back.

The majority of leaders have a sharp focus on operational, tactical, and interpersonal issues. They get projects done on time, solve difficult problems, delve into new technology, and resolve spats between subordinates and other groups. They assume that the successful execution of these activities puts them in contention for a higher-level position. Unfortunately, they are wrong.

Three Studies on Developing Strategic Thinking

1. Several years ago, a highly respected client organization executed a significant downsizing. They let go over 100 executives whose average tenure was 17 years. They asked us to analyze the data we had gathered before the layoffs to understand what caused these executives to get derailed.

We discovered that one of the most significant issues for the terminated group was the difference in their ratings of effectiveness on the leadership quality, “Strategic Vision.” Each of the executives had participated in a 360 feedback assessment where their manager, peers, direct reports, and others rated their effectiveness on a series of leadership competencies. The total population of leaders we assessed had an average score on Strategic Vision at the 54^thpercentile. The group who was terminated scored at the 32^nd percentile. Written comments about these leaders included comments such as, “Operations-oriented, not strategic” or “Handled narrow roles well, but floundered in organizational navigation and setting strategic direction.”

2. A second study we conducted was in a different firm. It involved 379 managers, of whom 116 were designated as having the highest potential. The graph below shows the difference in the effectiveness ratings from the 360 on the leadership quality “Strategic Perspective.” A group of senior executives had classified all the leaders as to whether they were in the category of “High Potential,” “Promotable,” or “Develop in Place.”

Note that the High Potential group was rated significantly higher on their effectiveness at Strategic Perspective than the Promotable group (T-Value = 5.607, sig. 0.000). To further verify our conclusions, we analyzed the data employing an experimental design where only 50% of the leaders were randomly selected for the analysis. The difference remained statistically significant (T-Value = 3.882, sig. 0.000).

3. In a third, much larger study, we again analyzed 360-degree feedback results from 100,856 leaders, comparing them based on their organizational hierarchy level. It is clear from the graph below that Top Managers were rated substantially higher on Strategic Perspective than Senior Managers (T-Value = 22.90, sig. 0.000). Once again, an experimental design randomly selecting 50% of the sample indicated that the results remained statistically significant (T-Value = 16.722, sig. 0.000). Upon analyzing all of the 19 leadership qualities evaluated, we discovered that Strategic Perspective was the leadership quality that most powerfully separated Top Managers from Senior Management. It showed the largest and most statistically significant difference between the two groups.

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These three studies show that a key characteristic that is highly correlated with promotion is the ability to think strategically. It does not differentiate leaders at other levels in the organization. For example, the number one leadership quality differentiating individual contributors from supervisors is Taking Initiative. But for senior leaders, the one competency that helped them stand out was Strategic Perspective.

Developing Strategic Thinking

Developing strategic thinking involves thinking about larger, macro issues, in contrast to the microfocus that many tend to take. Strategic thinking means seeing how the industry and the broader economy function. It also includes thinking long-term in contrast to near-term.

Being more strategic begins with a change in thinking. Instead of only focusing on operational, tactical, and interpersonal issues, begin to ask yourself tough questions such as, “Why do we operate in this particular way?”, “Why are our competitors doing so well?”, “Is there some organization out there that could disrupt our business?”, and “What changes in the future will have a significant impact on our business?”

To help us understand what leaders with high strategic thinking skills were doing differently, my colleague Jack Zenger and I looked at data from over 100,000 leaders. We sought to understand what else those who were most strategic were doing that helped them build that skill. We discovered five skills we call companion behaviors to Strategic Perspective. Leaders who were the most competent at Strategic Perspective were also very competent at these skills. We infer that improving these skills will help every leader become more strategic.

1. Communicate Powerfully. This includes listening, gathering, and, most notably, sharing information. The leaders rated the highest on strategic perspective brought strategy into almost every conversation to connect what they are doing to what the organization needs to do to succeed.
2. Foster Innovation. The world is changing. Disruption is everywhere. Ideally, leaders will disrupt their own business before a competitor disrupts it for them.
3. Focus on the Customers. Customers know things you do not know and see things you do not see. This is probably the least intuitive of these correlated behaviors. Getting out of the office and visiting customers has profound outcomes. Customers help you be a great success if you listen to them, understand their current needs, and anticipate needs in the future.
4. Inspire and Motivate. If a strategy is to be more than words and assumptions, others need to believe in it and implement it. The ability to inspire and motivate others is a vital part of making any strategy successful.
5. Establish Stretch Goals. Stretch goals help make strategies concrete. When employees accomplish stretch goals, their engagement increases and their self-confidence goes up. The organization moves one step further toward success.

Changing’s Others Perceptions of Your Strategic Thinking Skills

The late Peter Drucker observed that career success does not merely depend on someone doing a good job. Bosses and colleagues need to know that the person is doing a good job. In the case of strategic thinking, it is equally as crucial for others to perceive that the executive possesses that quality as it is actually to possess that quality.

I heard of a case recently in which a coach advised a woman executive, who had received lower ratings on her strategic thinking skills, to consciously make some changes in the language she used in management meetings. It was suggested by the coach that the executive introduce her comments in management meetings with phrases such as: “I think this would better support our strategy if we…” Or, “How does what’s being suggested align with our strategy for this department?” This rather simple change in language had a positive outcome. A year later, a repeat 360-degree feedback showed a dramatic improvement in her colleagues’ assessments of her strategic perspective.

If a lower-level employee were to become so focused on the company strategy that they failed to accomplish their operational goals, this could negatively impact their career. But when a higher-level executive is only focused on operational execution rather than strategy, not only will that negatively impact their career, but it will also impact the organization’s success.

If you want a different ending to the story of your career, start thinking more about developing strategic thinking skills. Ask yourself, do others perceive me as a strategic leader? Take a look at these companion behaviors, incorporate them into your routines, and resolve to be the leader who can see and communicate the whole picture

-Joe Folkman
(This article first appeared on Forbes.)

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