Business leaders often find themselves focused on short-term goals that distract them from creating a longer-term strategy. According to Paul Schoemaker, research director for Wharton’s Mack Institute for Innovation Management, that is only one of the barriers to being more strategic. Knowledge at Wharton recently discussed strategy with Schoemaker, whose new book with Steven Krupp, Winning the Long Game: How Strategic Leaders Shape the Future, addresses this challenge.
An edited transcript of the conversation follows.
Knowledge at Wharton: What challenge did you see for leaders that led you to write Winning the Long Game?
Schoemaker: We deal with a lot of leaders. They tell us, especially managers who want to be leaders, that they are often given feedback during the performance review that they are doing very well operationally and their execution skills are great. Then at the end, they are told they should be a bit more strategic because they might have missed a new market development or competitive entree. They then wonder, “How do I do this?”
When they ask their bosses, “What do you mean? Can you be more specific?” — their bosses don’t say much more than, “Do like Wayne Gretsky: Skate to where the puck will be.” But that’s often not enough.
Knowledge at Wharton: In the book, you provide a questionnaire for the readers to assess their own strategic leadership. Can you tell us about those questions and what you are helping the reader to assess?
Schoemaker: We feel that it has to be more concrete than giving very general propositions such as having a vision or having commitment. We, in a sense, deconstructed strategic leadership into six elements. These would be things like how to anticipate changes in the external environment or internally in the organization battle. It could be the ability to challenge yourself and other people’s views, especially in a changing world. Our focus is a bit on how to be strategic when things are changing in the external environment. These elements that I mentioned are especially important for that.
“You need to integrate strategy and leadership in a world of uncertainty.”
For example, the ability to interpret things that are happening, not through old lenses but new lenses. Then in a world of uncertainty, the ability to make tough decisions. That takes courage. You can’t wait for all the information. That’s a definite leadership skill: the ability to align people around a vision. But how do you do alignment? How do you bridge differences? How do you deal with conflict? Learning is the last.
Each of these elements in this particular survey … ask how often do you engage in the following kinds of behaviors. At the end, the participant has a profile. They can draw a little hexagon as to how well they score on these various dimensions and then focus more on the gaps. We offer specific advice on how to bridge the biggest gaps.
Knowledge at Wharton: In each of these chapters, you are looking through the lens of discipline. Can you tell us more about that?
Schoemaker: We have thought about what these skills are. Are these abilities? Are these competencies? Are these orientations? Are they skills? It’s a bit of all of that. [The] term “discipline” … captures three key elements. Namely, that it is based on knowledge…. [People] associate the discipline of playing bridge or doing sports or playing the piano with a knowledge base. That is one.
The other is literally the discipline of being disciplined…. Stick with a program; don’t be so easily distracted…. A third element is that, like any discipline, you don’t master it by reading a book. You master it by having a framework and then practicing, practicing, practicing — just like a musical instrument.
We felt that discipline has all of those connotations. But it also left room for the notion that there was an artistic element to it — the art of a discipline, [such as] in the martial arts or something like that. It’s not a scientific model necessarily. It allows for customization, and it is contingent on culture and situations. So, that’s all wrapped into the idea of a discipline — that you know how to deal with this enormous variety of situations that leave us in control.
Knowledge at Wharton: Can you give us a couple examples of leaders who have been very successful as strategic leaders?
Schoemaker: We start each chapter with a leader who everybody recognizes. In the first chapter on anticipation, we profile Elon Musk, who most people know as [CEO of] Space X. He is a remarkable inventor, and on paper, he became very rich. Now, he’s pioneering the electric car with a Tesla. He does approach it as a discipline. When he was asked once on a television program, “How can you be so creative?” He said, “Well, most people who want to be creative don’t even try…. I want my engineers to be very creative. We don’t want people who have average ideas.” And he said, “I work on this very hard, till my brain hurts.” So, it has an element of recognizing it as something you had to work on, just like an author would or an athlete would.
We profile Pope Francis, who took over a somewhat dysfunctional organization, some would say, with a lot of tough issues. It’s a tight rope…. He’s very conservative in some ways. He’s very liberal and very remarkable in other ways.
“In a world of uncertainty, no business plan survives contact with reality, so you need people who are very good at picking that up quickly and being able to make adjustments on the fly….”
For each of these topics, we profile leaders who we think were very impressive. In business, we describe [Charles O.] Holliday, who was the CEO of DuPont. In 2007, he picked up weak signals that we were going to hit a wall with the economy. But they were truly weak signals, like the reservations at Hotel DuPont were down. He picked that up at a reception. When he was in Japan, a Japanese customer was short of cash so he wanted to get postponements of payments. Then the auto companies, which are big for DuPont, wouldn’t share their production plans. He got this information disjointedly. Like Sherlock Holmes, he put together the picture and saw what was happening before others did — and as a consequence, survived the recession better than others.
Knowledge at Wharton: Can you give us some examples of those who were not able to implement the discipline of strategic leadership?
Schoemaker: That’s a long list. You can look at any of the failed companies, whether it is Kodak [or] Nokia.
The ones we profile are companies like Lego, the Danish company that has all the lovely plastic bricks. They were almost bankrupt after 30 or 40 years of great success. It was their inability to anticipate changes in their market … the IT revolution that games were becoming electronic. They were in Billund, Denmark, where they employed almost two-thirds of the town. You can imagine how devastating this was because the company almost went under. Then they had the opportunity to cut a deal with Lucasfilm for a really very successful [licensing opportunity]: “The Force.” They embraced “The Force,” and that saved them….
Knowledge at Wharton: As a final question, can you tell us what you hope readers will take away from the book?
Schoemaker: For one, we hope that readers who aspire toward strategic leadership start to realize that you need to integrate strategy and leadership in a world of uncertainty — much more than is typical. The typical model is that a strategy gets formulated, and leaders are involved in that process. But then others often execute. In a world of uncertainty, no business plan survives contact with reality, so you need people who are very good at picking that up quickly and being able to make adjustments on the fly….
I hope that they will also learn by example by reading the stories of leaders who are really quite remarkable. And it’s very international, so it’s not just American leaders. We profile them across the world. And then also they may want to mentor other people.
So, leaders who are very strategic can use the book as a guide to tell people who they feel should become more strategic how to do that.