The Importance of Strategic Planning/thinking
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The Importance of Strategic Planning/Thinking
Leadership is a vital ingredient to any organizations effectiveness. Strategic planning/ thinking have long been assumed to be functions and responsibilities of leadership. Leadership at the strategic level is one of the most important issues facing organizations in the 21st century (Hitt, Keats, and DeMarie, 1998). Without effective strategic leadership, the capability of a company to achieve or sustain competitive advantage is greatly constrained (Rowe, 2001). According to (Yuki, 2001) strategic leadership abilities to identify emerging opportunities in todays increasingly competitive business environment and strategic skills follow with appropriate steps in order to achieve successful implementation of interdependent and geographically-spread activities are associated with earning a premium in the marketplace (Elenkov, 2008).
Strategic planning is a key leadership responsibility. Effective strategic planning must address both external and internal environmental factors and circumstances that affect (or likely to affect) the continued success of the organization. External environmental factors include the economy, politics, social issues, legal requirements, and technology. Internal environmental factors include organizational capacity, internal politics, employee skills, labor-management relations, and technology. Organizational leaders use strategic planning to establish the long-term direction of the organization, develop strategies to move the organization from where it is to where it wants to be, and execute action plans that guide operational priorities. Strategy is an important communication link between strategic priorities and the organizational structure. The leader uses strategic planning as a vehicle to get the organization focused on the strategic priorities. The various outputs from the plans analysis (environment, competition, product and gap) help the leader determine the appropriate organization structure (Miller, 2007).
Characteristics of an Effective Leader
According to (John Vardallas, 2006) some traits of a good organizational leader or CEO includes:
A powerful business and people acumen
An embracing of diversity
The ability to inspire people to achieve
A clear vision of seeing the possibilities and the preferred future for their organization
The ability to build partnerships and alliances
Being servant leaders to their customers/members/consumers
A curiosity of the world an a facilitator of change
Leading by actions more than words
The ability to convert the learning of ideas into practice
The ability to execute plans
Classifications/Perspectives of Leadership
According to Fairholm (2004a), there are five classifications of leadership. The first leadership perspective is Leadership as (Scientific) Management. The strategic assumption here is that organizations and their leaders need to control chaos so that predictable, verifiable, and routinizable processes and outputs are the norm. This perspective focuses on strategic planning for efficiency. The second leadership perspective is Leadership as Excellence Management, which assumes that leaders should control chaos. Its difference lies in the focus given to process improvement and employee participation to assist in developing strategic plans to control the organizational chaos and disorder. (The Innovative Journal, 2009)
The third perspective is Leadership as a Values Displacement Activity. This perspective assumes the strategic thinking involves prioritizing other peoples values so they support and implement organizational goals. In this way it assumes strategic thinking is about influencing chaos (thus shaping how organizational actors participate) rather than trying to control it. The fourth perspective is Leadership in a Trust Culture, where the leaders goal (and related activity) is to encourage and maintain mutual trust so people act wisely and independently to achieve mutual goals. This perspective assumes a systems approach and focuses on embracing chaos-using it to create the environment to achieve desired ends. The last perspective is Whole Soul (Spiritual) Leadership. This perspective emphasizes strategic thinking at the grandest levels to
develop the best in others so they lead themselves (and others) in appropriate directions to achieve appropriate ends (The Innovative Journal et al).
Goals of an Effective Leader
According to Armitage, Brooks, and Carlen (2006), an organization exists for one purpose: to accomplish what is required to help the company to achieve its mission and strategic vision. They further state that effective leaders will:
Envision a clear path from the organizations current position to its desired destination.
Determine and decide the steps to be taken to reach those incremental objectives that lead to the desired state.
Mobilize the entirety of the organizations resources (its people, processes, products, services, partnerships, customer relationships, etc.).
Continually navigate and maneuver these resources, redirecting as necessary until the objectives and the end goals have been realized.
The future of an organizations growth, stability, and market dominance is directly related to aligned leadership execution at all levels of the company. The odds are stacked against any organization whose leaders only possess ability but do not have the capability to execute. Without the capacity to identify who those leaders are, where they are needed, and in what ways the company either enables or suppress leadership capability, organizations may be able to develop skilled and knowledgeable workers, but they will not produce the leaders capable of moving the organization forward (Armitage et al.).
Most successful leaders are goal-oriented. They are skilled at setting team goals with their employees as well as, setting goals for themselves and following through. A goal is a predefined statement of results to be achieved and should describe:
The conditions that will