How Strategic Skill Is Important in Leadership
It’s no secret that businesses need good leaders if they hope to succeed. But many people don’t realize that strong leadership requires more than just a good head for business — it also takes strategic thinking skills. A leader without a clear vision and plan for the future will likely find themselves and their company heading in the wrong direction.
According to business leaders in Singapore, one of the world’s most prosperous and forward-thinking nations, strategic thinking is the number one skill that drives effective leadership. So what exactly is strategic thinking? And why is it so crucial for business leaders?
Understanding Corporate Strategy
At its most basic, corporate strategy is the process that leaders use to set priorities and decide how to allocate resources to achieve specific goals. In other words, it’s a road map for how the company should operate to achieve its desired outcomes.
There are three main types of corporate strategy, each with a different focus. Below are brief explanations of each:
Growth strategies
This area focuses on how a company can expand its business operations. It involves deciding which new markets to enter, what products or services to offer, and how best to take advantage of existing market opportunities.
Business leaders who want to pursue a growth strategy must have a clear vision for the future and be able to identify and seize new opportunities when they arise. This way, they can ensure that the company is always moving forward and growing.
Especially in today’s rapidly changing business landscape, leaders need to be able to adapt their growth plans as needed and stay ahead of the competition. In doing so, they can keep their company on the path to long-term success.
Stability strategies
Stability is about maintaining the status quo and protecting the company’s current position in the market. That means avoiding any significant changes or risks that could jeopardize the business.
Pursuing a stability strategy is often the best action for companies that are already doing well and don’t need to make any significant changes.
In some cases, a company may pursue a stability strategy out of necessity, such as when its management will go through a succession. Take it from SMRT, a world-class public transportation provider in Singapore. When its long-time CEO stepped down from the role, the company’s board decided to pursue a stability strategy to ensure a smooth transition.
Today, the company announced Ngien Hoon Ping as the new CEO, who would eventually lead SMRT through one of its most successful periods in recent years. According to SMRT Chairman Seah Moon Ming, this succession strategy allowed the company to stay focused on its goals and continue providing high-quality customer service.
A stability strategy can help ensure a company’s survival during tough times and set it up for future success.
Turnaround strategies
A turnaround strategy is about making changes to an underperforming company to improve its financial health. It may involve reducing costs, exiting unprofitable businesses, or divesting non-core assets.
It can be a complex and risky process, but it’s often necessary for companies struggling to stay afloat. A well-executed turnaround strategy can help a company get back on track and position it for long-term success.
How Leaders Can Be Effective Strategists
The most effective leaders are not only good at setting and executing corporate strategy, but they’re also excellent strategists. They can think abstractly, see the big picture, and make decisions to help their company achieve its desired outcomes. They can come up with creative solutions to problems and always think one step ahead.
Being a strategic thinker is not easy. It requires a certain level of intelligence and cognitive ability. But it’s a skill that can get developed with practice. Here are some tips for how leaders can become better strategists:
Be open to new ideas
Strategic thinkers are always looking for new ways to improve their company. They’re not afraid to try new things or think outside the box. They’re constantly looking for ways to push the company forward and stay ahead of the competition. By keeping up with the latest industry trends and developments, they can identify new opportunities for their business.
Be analytical
Data is vital for strategic thinkers. They use it to inform their decisions and always look for ways to improve their company’s performance. They know how to analyze their business to find new areas of opportunity. Many training programs can help leaders develop their analytical skills. These skills are essential for making sound strategic decisions.
Be creative
Leaders can develop their creativity by taking on new challenges, learning from failure, and thinking outside the box. Attending workshops and conferences can also help leaders gain new perspectives and find new ways to be creative. It’s a simple way to get out of a rut and come up with fresh ideas.
Business leaders must possess many skills to be successful. But one of the essential skills is strategic thinking. Leaders who are influential strategists can help their company achieve its desired outcomes. By being open to new ideas, analytical, and creative, leaders can develop their skill set and lead their company up to success.
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