What is the role of strategic leadership?

Strategic leadership drives an organisation’s long-term success by shaping vision, decision-making and innovation. Effective leaders in this role focus on both immediate goals and future opportunities, ensuring sustainable growth. Key examples of strategic leadership include:

• Researching and implementing creative ways to streamline processes
• Creating a coherent vision for business projects and long-term goals
• Communicating their vision clearly to employees, especially during organisational change
• Fostering a culture of creativity and innovation
• Designing highly effective reward and motivation programmes for employees
• Maintaining a bigger-picture perspective and understanding its impact on the business
• Taking a proactive approach to workforce transformation

What is strategic thinking?

To lead strategically, executives must develop key traits rooted in strategic thinking. These include:

• Anticipating market changes by understanding competitor actions, products, consumer behaviours, and sentiment
• Challenging ideas and evaluating solutions from multiple perspectives
• Exploring a broad range of possible solutions with an open-minded approach
• Weighing short-term vs long-term investments with diplomacy, considering the impact on investors, customers and other stakeholders
• Learning from past failures and applying course-correcting strategies to drive better business outcomes

In the next section, we’ll explore how strategic leadership behaviours help businesses stay relevant and navigate internal and external challenges.

Why is strategic leadership relevant?

For businesses to remain competitive in changing industries, they need a strong long-term strategy. Strategic leadership helps them do so by creating unity, vision and direction around business goals.

For businesses focused on future proofing their business, strategic leadership plays a crucial role. A strategic leader has the ability to assess the long-term outcomes of using AI in the workplace, particularly in areas such as learning and development or diversity and inclusion. 

Understanding how AI can assist rather than replace human expertise is key to maintaining a fair and equitable workplace. Research shows a strong relationship between AI and diversity and inclusion, especially in processes like employee identity verification and candidate screening.

Since historical hiring data may reflect past discriminatory decisions, strategic leaders must carefully evaluate AI’s role in recruitment and workforce management. To uphold diversity and inclusion commitments, strategic leaders can gather perspectives from Employee Resource Groups, test AI implementation hypotheses and explore multiple solutions to mitigate bias and ensure fairness.

Strategic leaders might also aim to identify emerging skills gaps before they arise. By researching upcoming industry trends, strategic leaders can identify the skills their employees need to keep their business competitive in the future. 

Strategic leaders can navigate difficult long-term decisions

Strategic leaders take a measured-approach to decision making, carefully considering how different solutions may play out and whether investments are worth it. This can help them navigate highly volatile markets, industries facing digital skills gaps and other changing business landscapes.

For example, when considering the adoption of AI technology, a strategic leader might first analyse how competitors are using it and whether it has delivered tangible benefits.

If a competitor has incurred losses by adopting an AI tool without adequately training their staff, a strategic leader would take a more considered approach. They might invest in AI training before fully adopting the technology. When their staff understand how to use this technology efficiently, adopting AI in this case becomes a good investment. Strategic leadership can ultimately save a business time and money in the long-term. 

Creating a framework for strategic leadership

Coaching talented employees in strategic leadership can be a core component of a business’s succession plan. By developing these skills, employees may be better prepared to take on executive roles in the future. Successful leadership development can also help businesses grow and improve agility.

For businesses looking to foster strategic leadership in the workplace, having a structured training framework in place can be beneficial. Identifying the core components of strategic leadership allows business leaders to guide employees in adopting this approach.

One well-known framework is Bloomberg Harvard’s ‘Four Ps’ of strategic leadership:

• Projection: Creating a coherent narrative around a business’s vision, both for yourself and others. This also includes creating a story about how you see yourself as a leader.
• Perception: Working to understand multiple perspectives before proceeding with an idea and recognising that people might notice things you do not.
• People: Understanding the impacts your decisions could have on people’s emotions and how to regulate your own emotions.
• Process: Knowing that process choices can privilege some people over others, so negotiating the fairest choice outcomes is key.

Now, let us consider how to put these different elements into practice. For example, imagine a leader who wants to create a new product that is competitive on the market. They being by actively listening to the range of senior employees’ perspectives. For example, a Head of Marketing and Head of Creative’s views on how the product should be developed and marketed to customers. 

Using these perspectives, the leader assesses how different product features might impact customers and possible outcomes. This includes evaluating whether the product’s proposed features meet customer accessibility needs. Considering the impact design decisions would have on their customer base, they could conduct a sentiment analysis to gauge how customers would respond to these design choices.

Strategic leadership vs other forms of leadership

Strategic leadership is not always just a framework. It can be part of a hierarchical approach to business leadership. While smaller businesses may operate with a small team of leaders, medium-sized or larger businesses often have three distinct leadership classifications: strategic, organisational and production orientated leadership.

• Strategic leadership – The highest level of leadership, responsible for shaping the company’s long-term vision and overall business strategy.
• Organisational leadership – Mid-level leaders who translate the overarching business strategy into actionable short- and mid-term goals. They develop strategies and processes that align with the company’s objectives.
• Production-oriented leadership – The lowest leadership tier, focused on executing tasks and meeting goals. These leaders may adapt strategies to improve efficiency but are typically not responsible for defining business processes or creating new solutions.

By understanding these leadership distinctions, businesses can create a more structured approach to decision-making, ensuring that strategy is effectively implemented at all levels.