There comes a time in the life cycle of a business when strategic acumen (sometimes called strategic capability or strategic proficiency) needs to proliferate. Beyond the start-up stage, at a point where the founding/visionary CEO can no longer be the sole provider of executive perspective, a larger group of people – starting with an emerging executive team – needs to be able to develop, communicate, and activate strategic perspective. Failure to develop this capability will constrain a company’s growth and exhaust its CEO.
On one level, many businesses seem to understand the importance of building strategic acumen. That is, senior leaders often direct ambitious employees and teams to become “more strategic,” bemoaning their being “stuck in the weeds.” For their part, rising managers often express frustration at their inability to be more strategic, and vow to make the time to do so (as if time were the only deterrent).
And yet, this dynamic and the attending frustration persist – from both the professional satisfaction and the business advancement perspectives. Why is such an important aspect of leadership left in such an under-developed and almost mysterious state? After all, The Economist declared back in the 90’s that “No one really knows what strategy is.” Really?
I absolutely believe that businesses can intentionally cultivate strategic acumen in their individuals and teams – and then harvest it to advance the business. Note that both are necessary to realize value, and it’s as much of an organizational effort as an individual effort to develop this capability.
Cultivating Strategic Acumen
Step 1 – Define it specifically for your business
Strategy means different things to different people. What specifically do you mean by strategy and “being strategic”? You can borrow someone else’s definition or create your own, but it needs to be defined. Here’s how I define Strategy in the business and non-profit worlds: the intentional deployment of particular assets and capabilities to achieve desired results. Here’s a post that goes into the details of this definition.) It can be applied at the individual role, team, or enterprise level. Strategic acumen is the ability to apply this definition (or another one you choose) to the particular circumstances that the employee/team/organization is facing.
For example, what is the intentionality(implicit or explicit) behind our allocation of resources? Where is funding increasing and decreasing, and why? What are the most crucial line items in your expense budget, not necessarily in terms of absolute dollars, but in terms of organizational impact? Geoffrey Moore, in his book Escape Velocity, talks about making “starkly asymmetrical bets” in order to establish and maintain leadership positions – this is exactly the kind of intentionality at the heart of strategic acumen.
Another example: which assets and capabilities are critical to our success – usually with respect to competitive differentiation? What is being done to protect, enhance, scale, and evolve these? What are we doing to minimize those assets and capabilities that are necessary but not differentiating?
Defining what you mean by Strategy creates the “space” where individuals and teams can productively demonstrate strategic acumen. Otherwise they are guessing, and that is both unproductive and unfair.
Step 2 – Require It and Reward It
Demonstrating this capability should be included in relevant job descriptions, performance objectives and reviews, career paths, team charters, desired results, outcomes, OKRs, talent development plans – anywhere that it can be made explicit.
It should be discussed openly in the organization and celebrated when individuals and teams meet the criteria. Decisions and behaviors (or the absence thereof) that are considered to lack strategic perspective should be discussed in the appropriate settings. In short, “being strategic” should be like any other capability in the workplace – not treated as something nebulous or unapproachable.
Step 3 – Practice It Intentionally
Developing strategic acumen requires ongoing effort. It involves regular, repeatable practices and intentional collaborative opportunities like quarterly business reviews, horizon scanning, and scenario planning. It requires monitoring of business conditions and agility to make conscious adjustments as conditions warrant.
Depending on specific roles, individuals and teams can build certain strategic practices into their annual goals, operating plans, meeting agendas, and performance reviews. They can create strategic value chains with suppliers, customers, inputs, and outputs. Part of not “getting stuck in the weeds” or “not having time to think strategically” is simply building these practices into a schedule and sticking to it – including communicating with stakeholders regarding decisions, modifications, etc.
Harvesting Strategic Acumen for the Organization
The business that follows these steps to cultivate strategic acumen will then be in a position to harvest it in service to its mission. But it won’t happen automatically. Here are three crucial aspects to leveraging this critical emerging capability.
- Cascade from the top down
The executive team should lead the way in formulating and communicating strategy through a singular corporate narrative. This provides the context and direction that the functioning organization can respond to, as well as setting expectations with its Board, investors, and external stakeholders.
Developing and advancing this narrative in a singular way has the additional benefit of galvanizing the executive team, which is often in its own state of development and flux.
This enterprise level narrative then becomes the input for functional groups, lines of business, and other sub-entities to develop their own strategic “responses” that will connect the dots between corporate objectives and tactical operating plans for line-level employees.
- Drive transformational change
Strategic perspective is rooted in the understanding that the organization must change significantly in order to realize its mission and vision. But these concepts are often cast in language that lacks urgency and specificity. An effective corporate narrative establishes a three- or four-year window for achieving a fundamentally higher level of performance, and specifies the critical change initiatives that will ensure the success of this “era” for the business.
A single year’s perspective is not sufficient to see the longer arc of organizational change, although each year will bring progress toward that change. Establishing a compelling narrative and setting goals that are aligned with transformational change is important for both leadership and the organization as a whole.
- Integrate with Core Business Processes
The strategic perspective that will accumulate in the organization needs to be tightly integrated with core business processes like annual planning and budgeting and performance management. This integration represents the interface between strategy and execution. Annual operating plans and performance objectives should clearly reflect the strategic input that drives their development.
Many companies rely on their Finance team to drive these annual planning processes, since the outputs are almost always expressed in financial terms. However, a finance-driven process is fundamentally different than a strategy-driven process in terms of enterprise-level purpose and leadership alignment. Leadership needs to ensure the strategy-driven perspective.
How and Where To Begin
Developing both the cultivating and the harvesting capabilities to leverage strategic acumen takes time and intention, and often involves abandoning some bad organizational habits along the way. Taking stock of current practices and capabilities will often suggest a starting point, especially if there are upcoming events creating a sense of urgency, such as an acquisition or the arrival of one or more new executives. Annual planning cycles and board/investor engagements may also drive the sequence of cultivating and harvesting strategic acumen.
Which step you choose to take first is less important than starting with shared intention among the organizational leaders who will move the effort forward. That collaboration is truly the first step in the process.
Where is your company in its cultivation and harvesting of strategic acumen in existing and emerging leaders?
Strategy, Creativity, and Leadership 