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Step three in the transition from functional to business leadership

By IMD Professor Michael D. Watkins - October 2014

Business leaders need to be strategists and not just tacticians. Good strategists see the big picture; they see important patterns in complex environments, and are able to crystallize and communicate the strategic implications to others. In short, business leaders need a strategic mindset.

Tacticians, on the other hand, must focus on the details of how best to implement an overall strategy. These implementation decisions are often the responsibility of functional leaders. 

Both strategy and tactics are important. As the Chinese general Sun Tzu said over 2,500 years ago, "Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." Former GE CEO Jack Welch echoed this, saying "You've got to eat while you dream. You've got to deliver on short-range commitments, while you develop a long-range strategy and vision and implement it."

In discussing the seven seismic shifts that executives experience in going from functional to business leadership roles, we have already looked at the transition from "analyst" to "integrator" and from "specialist" to "generalist." The move from "tactician" to "strategist" is the third step along this road. 

You must have some innate ability to become a great strategic thinker. One cannot, as the old saying goes, "make a silk purse out a sow's ear." At the same time it is clear that strategic thinking ability can be substantially developed and improved. With the right training, leaders can become much better strategists. So, as with many things, good strategic thinkers are a product of nature and nurture.  

Answering key questions 

There are four key questions that strategists need to answer and align their organization around. I call them the "What," "How," "Who" and "Why."  

Terms like mission, vision and strategy cause endless confusion. But we can boil them down to a simpler set of questions. WHAT are we trying to accomplish? This is the mission question. HOW are we going to accomplish it? This is the strategic question, and it includes the questions of WHO needs to be involved, what resources should be deployed and what alliances must be formed. What people often miss is the why. WHY should we get excited about doing this? The answer to that is the vision.  

Developing strategic thinking skills 

To be effective in answering these questions, leaders need three special strategic thinking traits. I call them "pattern recognition," "level shifting" and "mental simulation."  

Pattern recognition means that business leaders must be able to take a complex, noisy, jumbled environment and discern what is really crucial about it. They need to see what patterns are emerging and what the underlying cause and effect relationships are. Without this ability, it is virtually impossible to know what is important and what isn't. Strategists need to focus on what is crucial.  

Level shifting involves the ability to move easily and fluidly from the detail to the big picture, from the current to the future. Think of this as "helicopter leadership." Strategic thinkers have the ability to take an issue and dive down very deep into it to make sure people have grasped every aspect. But they also have to be able to soar back up to see the bigger picture.  

Mental simulation is the ability of a business leader to envisage the likely responses to his or her actions. If a new product is being launched, how are competitors going to respond? In the case of an acquisition bid, what are government regulators likely to do? Mental simulation means looking forward, but reasoning backwards to come up with the right action.  

The importance of communication 

Finally, good strategists need to be able to communicate effectively. The old adage has it that "a bland strategy executed brilliantly is better than a good strategy executed poorly." Execution is about communicating and aligning people. 

The function of strategy is to align; it tells people what direction to take. But this has to be communicated well. A business leader may devise a brilliant strategy, but he or she must be willing to do the hard work—and it is hard work—of explaining it again and again until people really understand not just the strategy, but what it means for them at the local level. Otherwise the strategy will not achieve its goals.  

A good communications team is important here. But if the business leader is not the driving force behind the communication effort, the latter is not going to work. Bruce Henderson, one of the founders of the Boston Consulting Group, used to talk about "powerful simplifications." Distil strategy down into something relatively simple but powerful and then communicate it.  

Concise. Crystalline. Powerful. Simple. That's what effective communication requires.  


Michael D. Watkins is Professor of Leadership and Organizational Change at IMD. He co-directs Transition to Business Leadership, a program designed for experienced functional managers who either have recently transitioned or will soon transition into a business leadership position. 

SEVEN SEISMIC SHIFTS is a trademark of IMD – International Institute for Management Development

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