Variations of this question appeared time and again in the many years we’ve studied organizations going through transformations as they expanded internationally. We began to look closely at the differences between under-performing and superior-performing organizations as they attempted to turn strategic intent into desired business results.

We found a fundamental characteristic of executives in superior-performing organizations — they recognized that the ability to successfully formulate and execute a coherent business strategy is intrinsically linked to formulating and executing a robust leadership strategy. This recognition raised decisions about leadership development to the strategic level.

Like interwoven strands of DNA, business strategy and leadership strategy are intimately linked. The business strategy sets the direction of the organizational journey and the leadership strategy acts as the human enabler to reach the organization’s full performance potential.

The leadership strategy process is what makes the business strategy come alive in the organization. A leadership strategy bridges the gap between strategy and performance. It clarifies how many leaders an organization needs, the type of leaders needed, and where they are needed, as well as the type of skills and behaviors required if the organization is to succeed in its performance goals.
 

Leading Strategically for High Performance

Why do leaders of some organizations successfully execute strategies that lead to excellent business results while others fail to translate strategic intent into desired outcomes? The difference is in their collective ability to lead strategically.
 
Executives in high-performing organizations:
 
  • Invest significant time on questions of strategy coupled with powerful questions of leadership.
  • Distinguish the periodic strategic planning process from leading strategically for ongoing organizational impact.
  • Know that good strategic leadership at the organizational level is somewhat different from effective leadership by individuals scattered about the organization.
  • Realize that when strategy lacks meaning for people, it is unlikely that they’ll adopt the essence of strategic directives and perform to their highest potential.
  • Pay attention to leadership strategy along with the business strategy in order to reach their performance potential.
Individuals and teams enact strategic leadership when they address the challenges most relevant to their business and create the direction, alignment, and commitment needed to achieve the enduring performance potential of the organization.
 
But having a strategy is not enough.
 
Strategic leadership is needed to achieve goals, drive performance, and align short-term action with long-term direction. Leaders face the challenge of getting everyone from the executive team to the front lines moving in the right direction together. A leader’s effectiveness is helped – or hindered – by the ability to:
 
  • Lead change. Leaders foresee changes to the business environment that will bring increased complexity and new tensions to the organization as it engages in transformative business-model change.
  • Shape culture. Leaders develop organizational cultures that elicit strong identification and a sense of belonging on the part of individuals.
  • Leverage polarities. Leaders understand and leverage organizational priorities that may appear to be diametrically opposed, avoiding an “either/or” approach, they find “both/and” solutions.
  • Span organizational boundaries. Leaders implement tactics to span organizational boundaries in order to facilitate interdependent decision-making and collaboration.

 

Bridging the Strategy – Performance Gap

Successful leaders think strategically about these types of challenges, take action to address them within the organizational context, and influence other stakeholders to drive the institution toward the desired performance outcomes.
 
Our 5-day Leading Strategically program gives senior leaders new skills to effectively align the organization and execute strategy. The program helps participants understand their strategic leadership strengths and weaknesses, learn skills and tools to improve strategic leadership, and plan to leverage new skills to address specific work challenges.
 
Strategic thinkers ask questions — not only of their teams, but of themselves. With the business landscape growing increasingly complex and ever-changing, the ability of leaders to think and act strategically is what gives organizations the competitive advantage and improves performance. It helps them bring people together so they can execute strategy successfully.
 
Business strategy is the foundation of a leadership strategy. It provides the direction and the motivation for talent development. In turn, it is talent that will allow the business strategy to be realized, refined, and reinvented over the lifetime of the organization.
 
By making explicit the leadership drivers, the culture, talent systems, and organizational design, the organization begins to unlock the inherent performance potential of the organization.
 
Read our white paper, Bridging the Strategy/Performance Gap, for more to help your organization connect strategy and results.

2 thoughts on “Why Does Your Performance Lag When Your Business Strategy Is Excellent?

  1. Gregory Johnson says:

    The logic is sound. Business Strategy should be the foundation to any business but the Leadership Strategy is often ill defined and misdirected. Great article of enlightenment for any professional that ascribes to serve as a Leader.

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