While there are many skills that an effective creative leader must have, one of the most important skills is strategic thinking. Creative leadership is the ability to generate and implement both an effective strategy (culminating the first three creativity steps) and effective solution (culminating in the last four creativity steps). Creative leadership involves effective skills with visionary thinking, strategic thinking, and ideational thinking (creative leaders are good at generating many ideas). This essay is explores what constitutes an effective strategy, namely the value of a particular strategy.
Strategies can be grouped into four categories based on the potential value of a strategy (“Strategic Value”) and its respective difficulty of implementation (“Implementation Difficulty”). To start this discussion on strategies, we will start by comparing and contrasting the four categories.
While both Critical and Cumulative strategies have high-strategic value, Critical strategies usually have the highest payoff of all strategies, but are more difficult to implement and, as a result, typically foreclose one or more alternative strategies. In contrast, Cumulative strategies have good payoffs, but are easier to implement, and generally speaking, do not foreclose other opportunities. Cumulative strategies often work in combination with other strategies, and thus, have an additive impact when aggregated. Cumulative strategies have less risk and can pursue so long as they make sense on a cost-benefit basis and profitable Critical strategies have been exhausted.
However, the matrix above isn’t really drawn to scale as Critical strategies can sometimes have many times (if not 1000X) the potential impact (and risk) as Cumulative strategies. Even within each quadrant, there can be great variations in terms of difficulty of implementation and strategic value so nuanced analysis and rank-ordering is usually a good idea, both across and within quadrants.
Critical, Quagmire, and Disaster strategies are all marked by high Implementation Difficulty. However, a Critical strategy, if implemented effectively, has high Strategic Value. What makes a Quagmire so bad is that it has high Implementation Difficulty but low strategic value, even if implemented successfully. The third alternative – Disaster – is not an initial strategy, but rather the actual result when a Critical strategy fails or is implemented poorly.
Both Cumulative and Distraction strategies are easy to implement and tend to be “additive” in nature with each successfully executed strategy bringing the organizational closer to desired results. This is because easy-to-implement solutions typically do not foreclose the pursuit of other strategies (pursued sequentially or simultaneously). Though Distraction strategies may have some value, they are labeled Distractions as they divert attention from Cumulative and Critical strategies (if a Distraction strategy had significant strategic value if would be Cumulative).
Having discussed the four quadrants of strategy, this posting will now explore some particular strategies associated with high-strategic value.
High-Strategic Value Strategies
Recruiting and hiring the best people is usually a Critical strategy (because it forecloses the opportunity to hire someone else), though some hires have greater potential to impact an organization than others. For instance, hiring a new CEO will likely be a Board of Directors most Critical strategy of the year; hiring additional members of the leadership team might still be a Critical strategy. Hiring a new payroll manager, however, at best is more of a Cumulative strategy as the potential payoff of such strategy is not nearly as high.
One common mistake of organizations is that often over-emphasis resume or technical skills over interpersonal skills, character, and general likeability. An organization will never be great if employees don’t like the other employees that work there.
In addition to hiring the best people, organizations should be committed to developing their people (through mentoring, training, education, delegation of good assignment, development plans, etc.), doubly so in respect to their current and future leaders and triply so in regards to a few hand-selected Critical leaders.
Sometimes overlooked, though equally important to hiring the best, is actually firing the worst performers in an organization. Too often leaders put off having honest and frank conversations with a few “bad egg” individuals. While people should be given some chance to correct behavior, they need not be given many chances. You cannot overestimate the damage one individual can do to an organization. Even if they aren’t causing major problems, they are taking a space that could be filled by a problem-free contributor or even a star performer.
By identifying and progressively moving the weakest performers out the organization, the organization strengthens its key assets – its people. Incidentally, this is why governments are totally inefficient, instead of firing people that should be fired, they give them jobs and pensions.
While the following statements border on flippancy, Mitt Romney’s quote is actually part of the reason he is an effective executive leader: “I like being able to fire people who provide services to me … You know, if someone doesn’t give me a good service that I need, I want to say, I’m going to go get someone else to provide that service to me.”
Similarly, successful leader Donald Trump’s key catch phrase is appropriately, “you’re fired!” While good leaders wield their power to fire with tact, judgment, patience, and mercy, they still must do it – that is why they are the leader. However, the best course is to hire very carefully (as a Critical strategy) and slowly so as to prevent the need for firing.
Critical or Cumulative strategies usually involve obtaining, preserving, and deploying resources effectively. Obtaining additional resources is usually an important strategy, which is why college president and politicians must be excellent fund-raisers. In addition, resources must be obtained regardless of whether they come from within (budget and head count allocations) or without (grants, revenue, contributions) the organization. The failure to obtain resources can lead to disaster or stagnation within an organization or department.
Likewise, obtaining extra resources, if deployed effectively, can generate “momentum” as discussed below. In addition, there are situations where acquiring a specific resource at a specific time is of the utmost strategic importance to execution of particular strategy. For instance, the selection of Vice-President Candidate (a resource) is often the single most important strategy decision in a presidential election because of their ability to sway (for or against) certain voting blocs and thereby win (or lose) certain states.
As Benjamin Franklin would say, “a penny saved is a penny earned.” Thus, conserving resources is a high pay-off strategy. One way to conserve resources is by carefully cutting any unnecessary or unhelpful costs. Another way to indirectly cut costs is by a constant commitment to process improvement. Process improvement allows organizations to increase their output while decreasing their inputs, thus conserving resources. As a caveat, in some organizations, being too efficient with your budget actually leads to departmental budget cuts, so you have to be careful if you are department head.
Besides physical resources (people, buildings, computers), there are also intangible resources – time, energy, commitments, morale, etc. An effective strategy seeks to increase and conserve these types of intangible resources just the same as tangible resources.
Likewise, sometimes the worst “leaks” in an organization is psychic drain due to certain aggravating factors (annoying policies, employees, or the pursuit of Quagmire or Distraction strategies) that need to be alleviated.
Similarly, an effective strategy is always to deploy resources more effectively. Similar to process improvement, by deploying resources well you can increase output while decreasing inputs. Take a look at my strategic delegation posting for advice on how to do this more effectively.
If you employ all these strategies regarding obtaining, conserving, and deploying resources effectively, you will (hopefully) find that your organization sudden has a surplus of resources. What then? Use them on Critical and Cumulative strategies of course!
In fact, it is by careful use of your resources you can pursue multiple strategies simultaneously (not all of them can be Critical however). In particular, you should deploy them on strategies that will generate momentum throughout the organization, including securing key wins, boosting morale, eliminating bottlenecks or drains, improve relationships with key stakeholders, developing leaders and staff, or generating competitive advantage, etc.
Critical or Cumulative strategies often involve improving relationships with key stakeholders, both internal and external. In addition, even strategies that involve ideas, technology, or other things have important people considerations. Thus, a key strategy is to identify and to improve relationships with key stakeholders. These could include key internal leaders, employees, as well as external customers, supporters, and even detractors. While sometimes you have a specific position that you are advocating, developing relationships ahead-of-time is important practice that will help ensure that you have “the votes”, exactly when you need them.
To accomplish this, an effective strategy is to take the time to meet with and communicate with key stakeholders. In particular, is wise to spend a lot of time listening (rather than talking) in order to learn about the preferences and interests of the stakeholders. The more you know about the key stakeholders, the better you can adapt your potential strategy – whatever it be – to the context. In addition, supporting the (non-controversial) projects and interests of key stakeholders helps build the “goodwill” bank account and often ensures that they will support your (non-controversial) measures in the future as well.
Events & Incidents & Opportunities
Critical or Cumulative strategies often involve handling events, incidents, and opportunities – planned and unplanned – is an important strategy and leadership task. To draw an unfortunate analogy, the most effective leaders act *somewhat* like politicians during a campaign season – they monitor current events, respond to incidents, seize opportunities, and use social events to move their organizations and their campaigns forward with ruthless efficiency.
For instance, think about Joe Paterno’s failure to manage incidents (allegations of abuse on his staff) decimated much that he accomplished. In contrast, the textbook example of crisis management is Johnson and Johnson’s management of the cyanide Tylenol incident in the 1980s. This is where J&J was willing to pull the contaminated Tylenol from the shelf costing some short-term financial pain, though the long-term benefit to its brand were enormous.
Equally important to crisis management, however, is a leader’s ability to spot and capitalize (and create) opportunities. If executed well, a leader can turn an opportunity in a small or large victory, which generates a leader’s most important (and fickle) resource – organizational momentum. Anyone who has played on a team that was “on fire” knows the power of momentum. Likewise, anyone who has spent time on a losing team or organization knows that negative momentum can be a black hole whose gravity is difficult to escape.
In the past, organizations could have strategies that did not depend on technology. Now days, it is hard to imagine any strategy that did not depend on technology in at least in some fashion. In some cases like tech companies or web companies, the technology is the strategy. For most industries, technology merely supports or enables the strategy. In any case, effective strategies will always involve some use of technology.
Choosing the Right Strategy
Of all the Critical strategies, the one with the highest payoff is choosing the right strategy. While organizational devote some time to strategic planning, they may not necessarily devote the right time, people, and resources needed to determine a break-through strategy.
Very often, choosing traditional strategies (increasing product quality, reducing costs, driving revenue) are either Quagmire or Distraction strategies. In contrast, the strategies chosen by creative leaders like Steve Jobs (integrate music hardware, software, and music distribution), have enormous payoff if they succeed.
Whatever strategy you choose, it should be one that seeks to develop sustainable competitive advantages throughout your organization and industry. While it depends on your exact organization and industry, competitive advantage can include key technological advances or initiatives, world-class customer service, or expertise. In addition, developing core competencies such as marketing and product management, process improvement, innovation, or sales can be distinct competitive advantages that propel your organization ahead of the competition.