ELEMENTS THAT SHAPE GOOD STRATEGIC LEADERSHIP JUDGEMENTS.
Strategic leadership judgements are complex flows of events that continue through to successful execution, not a single one-off event. This clearly implies that adjustments can be made throughout the process. Continuous improvements up to the point of execution enhance the quality and effectiveness of the judgement. Although she recognised the need to make a strategic leadership judgement for the acquisition of Compaq by HP (Hewlett-Packard), then CEO Carly Fiorina faltered in the execution stage of the acquisition and rendered her judgment call ineffective. Fiorina’s successor, Mark Hurd, successfully executed the acquisition and pinned the ribbon of effectiveness to his own strategic leadership judgement calls.
Sound strategic leadership judgements enable a company to react quickly or aggressively to changes in their competitive environment. Leaders at the old AT&T, Westinghouse and GM (General Motors) failed in this regard because they waited until their companies were almost comatose before they took action.
Leaders should get on to recognise the moments when fundamental changes are occurring and act swiftly and decisively. To gather information and to process it, to face reality as it is, to draw on experience and knowledge and to be proactive and constructive in their thinking processes are all elements that shape good strategic leadership judgements.
For people judgement calls, naming a new CEO or lower level leaders, companies should start early and identify the need to develop strong leaders. People who are misfits in the organisation should also be cut loose. Ken Lay made a very bad people judgement call when he failed to fire Jeff Skilling and Andy Fastow at Enron.
To scan the horizon and identify the need to make strategic leadership judgements is very crucial to a leader’s success. Discipline and constant searching are important to a leader who is interested in looking beyond the horizon at tomorrow’s market in order to make strategic leadership judgements that reinvent his or her organisation.
Dynamic leaders often frame the core issues or ideas that form the bedrock of their strategic leadership judgements into a phrase that helps them to rally their people and get them to think productively about a problem. Jack Welch framed the GE strategy as “We Are A Service Company With Competitive Products, Not A Product Company With Services On The Side;” for Best Buy Stores, “Becoming Customer-Centric;” and Hewlett-Packard, “How To Make the Current Portfolio Of Businesses Succeed.”
In a crises situation, short-term fixes use up a lot of resources without much to show for it. What is paramount in this scenario is being disciplined in executing the business strategy to completion. Getting the right people who would contribute to the successful execution of the strategic leadership judgements is the right way to go.
Sound execution completes good strategic leadership judgements. Resources, people, capital, information and technology must be mobilised in support of a clear judgement call. Decision-making is meaningless if the decisions are not implemented. Strategic leadership judgements are processes or flows that transcend the short-term and lend themselves to continuous adjustments or fine-tuning.