10 Principles For Developing Strategic Leaders

The following is a guest piece by Jessica Leitch, David Lancefield, and Mark Dawson.

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.

5. Provide access to other strategists
Give potential strategic leaders the opportunity to meet and work with their peers across the organization, or risk them feeling isolated and alone. The first step is to find them. These may be people who aren’t traditionally popular; their predisposition to question, challenge, and disrupt the status quo can unsettle people.

Cultivate the idea that many managers, perhaps even most, have the potential to become strategic leaders. Then bring the first group together. Invite them to learn from one another, and to explore ways of fostering a more strategic environment in the rest of the enterprise.

6. Develop opportunities for experience-based learning
The vast majority of professional leadership development is informative as opposed to experiential. Classroom-based training is, after all, typically easier and less expensive to implement; it’s evidence of short-term thinking, rather than long-term investment in the leadership pipeline.

Although traditional leadership training can develop good managerial skills, strategists need experience to live up to their potential.

7. Hire for transformation
Hiring decisions should be based on careful considerations of capabilities and experiences, and should aim for diversity to overcome the natural tendency of managers to select people much like themselves.

Test how applicants react to specific, real-life situations; do substantive research into how they performed in previous organizations; and conduct interviews that delve deeper than usual into their psyche and abilities, to test their empathy, their ability to reframe problems, and their agility in considering big-picture questions as well as analytical data. The better they are at keeping near and far points of view simultaneously available, the better their potential to be strategic leaders.

Focus on the Self
The final three principles are aimed at the potential strategic leaders themselves — these tactics can help them prepare for their personal evolution.

8. Bring your whole self to work
Strategic leaders understand that to tackle the most demanding situations and problems, they need to draw on everything they have learned in their lives. They want to tap into their full set of capabilities, interests, experiences, and passions to come up with innovative solutions.

And they don’t want to waste their time in situations that don’t align with their values. Significantly, they encourage the people who report to them to do the same. In so doing, strategic leaders create a lower-stress environment, because no one is pretending to be someone else; people take responsibility for who they truly are.

9. Find time to reflect
Strategic leaders are skilled in what organizational theorists Chris Argyris and Donald Schön called “double-loop learning.” Your goal in reflection is to raise your game in double-loop learning. This involves studying your own thinking about the situation — the biases and assumptions you have, and the “undiscussables” that are too difficult to raise.

Question the ways in which you question things. Solve the problems inherent in the way you problem-solve. Take the time to think: Why did I make that decision? What are the implications? What would I do differently next time? How am I going to apply this learning going forward?

10. Recognize leadership development as an ongoing practice
Strategists have the humility and intelligence to realize that their learning and development is never done. They admit that they are vulnerable and don’t have all the answers. This allows other people to be the expert in some circumstances. In that way, strategic leaders make it easy for others to share ideas by encouraging new ways of thinking and explicitly asking for advice.

Their thirst for learning also gives potential strategists the space to be open to less obvious career opportunities — new industries, different types of roles, lateral moves, stretch assignments, secondments, or project roles — that may help them fulfill their potential.

By following the 10 principles we’ve outlined here, you will give yourself the skill and influence to pave the way for others who follow.

Adapted and reprinted with permission from “10 Principles of Strategic Leadership” from strategy+business. ©2016 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. www.strategy-business.com