One of the most common questions we hear from clients is, how can I create leaders who have strategic capabilities? Organizations need leaders who can develop and implement strategies, so it’s understandable why this is a top concern.
But when we unpack the phrase “strategic capabilities,” we find it means different things to different clients. Over the past few years, we’ve cataloged the four different meanings clients articulate most often. These four distinctions have become a short-hand way to assess how we might help different clients build the desired and appropriate strategic capabilities, or competencies they want in their leaders and managers.
1. The ability to design a go-to-market strategy.
Here, we are talking about selecting the best strategic positioning in a market after some serious analysis of several different business aspects needed for a product or service launch. Some of these aspects include economic trends, the competitive landscape, and competitor’s product or service portfolios. Typically, we find this version of strategic capability needed at the most senior levels of an organization.
2. The ability to execute a strategic plan.
Also called “strategy execution.” This involves developing an operations plan, as well as implementing a go-to-market strategy. The selection and implementation of a new technology or a revamping of key policies may be part of this type of plan. Resource allocation strategies fit here as well. Typically, we find this strategic capability needed in the middle of an organization where strategy execution typically occurs.
3. The ability to design the organization to optimize the strategic plan.
Also called “strategic alignment.” Now we’re talking about a leader’s ability to ensure such things as key processes, core talent, structure, culture, and key metrics are all aligned with the stated go-to-market strategy and consistent with the operations plan. For example, if the go-to-market strategy focuses heavily on product innovation, are the organization’s R&D processes and R&D talent properly allocated? This organizational design skill is a strategic capability needed by all business leaders.
4. The ability to think how business challenges and decisions in one area may impact others.
Strategic thinking is a critical business skill needed to anticipate and plan for contextual changes inside or outside an organization. For example, when product pricing changes, what impact will it have on inventory needs? Some leaders naturally think this way and some don’t. Again, this orientation to think systemically is a strategic capability needed throughout the leadership ranks.
At the Center for Professional and Executive Development, we have built learning experiences aimed at all four of these distinctions in strategic capability. For example, our program Leadership: Aligning Your Organization for Performance is directed at the third distinction focused on alignment and organizational design. With different clients, we often mix, match, and reconfigure based on their unique needs and circumstances. But we seem to find time and again that those needs stem from one or more of these strategic distinctions.
Steve King teaches Leadership: Aligning Your Organization for Performance and designs learning programs to meet an organization’s immediate business needs.