Winning the Long Game

In a world that is not just volatile and uncertain but ever more complex and ambiguous, true strategic leadership is what will ultimately distinguish the winners from the losers. In the new book, “Winning The Long Game: How Strategic Leaders Shape The Future,” The Mack Institute’s Research Director Paul J.H. Schoemaker and leadership development expert Steven Krupp bridge the gap between the separate domains of strategy and leadership to show how to develop the discipline of strategic leadership in a world of growing uncertainty.

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In a stable environment, the ability to execute consistently on a quarterly or annual basis can make a good leader great and widely admired. In times of volatility, however, the right strategy can quickly become the wrong strategy, and even flawless execution will not help. The game will have shifted from classical music to jazz, since improvisation around broadly agreed themes is now called for. Strategic improv is hard for just a single player, let alone a whole team. For example, Kodak was for many decades the leader in producing film for making photos. It fully mastered the process of chemical emulsion technology that went into making the photon-sensitive paper widely used in pre-digital cameras. Yet this operational excellence meant little as the world shifted toward digital imaging.

What Kodak lacked was sufficient strategic leadership to guide the organization’s ongoing exploration, discovery, investment, and implementation of a new strategy that embraced the digital revolution. Although Kodak had the digital technology and capacity to invest, it was not able to turn the organization around quickly enough to keep pace with the disruption of its industry. Strategic leaders constantly test and revise their strategy while managing and adjusting execution. They seek to deliver results in the short term while securing long-term viability. This balance is tough to get right.

Since the stakes and challenges are higher in uncertain times, companies must tilt more toward strategic leadership than toward operational excellence. Importantly, strategic leaders not only respond well to uncertainty when it hits; they can actually create it by pursuing strategies that disrupt or destroy well-established business models. In the last few decades, we have seen great business success emerge from such creative destruction by agile entrepreneurs and companies that exploit new technologies, emerging markets, and sociopolitical trends.

A strategic leader must look at strategic decisions from two perspectives: “outside in” and “future back.” By “outside in,” we mean that a strategic leader starts with the external marketplace when addressing problems, without getting wrapped up by internal organizational issues. For Kodak, this meant downplaying the chemical emulsion business model and asking what the future of digital imaging might be five to ten years hence. Deep down, Kodak needed to see and act sooner since digital cameras were displacing the company’s film. Ultimately, years later, smart phones would become smart cameras and kill Kodak’s traditional business.

By “future back,” we mean that strategic leaders play the long game. Their long-term vision guides short-term decision-making in a flexible way. Strategic leaders plan backward from their idealized future images to what they must do now to be ready in five years or more. Being more strategic means reimagining your future and adapting your strategy or business model appropriately to changing times, to give your business the best chance of staying vital and sustainable. Kodak took too long to mobilize its middle management layer, even though its leaders recognized the tsunami of digital imaging ahead.

In a rapidly changing world, strategic leaders engage not only with the competition but, more broadly, with an ecosystem of diverse and potentially disruptive forces such as customers, suppliers, partners, organizational cultures, capital markets, and technological innovations. The continual threat of disruption requires the capacity to envision the future and catalyze change.

Paul J. H. Schoemaker is an author, educator, researcher, and entrepreneur in strategic management, decision-making, and leadership. He is the founder and executive chairman of Decision Strategies International, Inc. (DSI), a consulting and training firm specializing in strategic management and leadership. The company’s clients include several of the largest corporations worldwide, as well as over a hundred of the Fortune 500. Paul also serves as research director of the Mack Institute for Innovation Management. Paul is internationally known for his many articles (he ranks in the top 1 percent of scholarly citations globally) and more than ten books on decision-making and strategy, including Decision Traps; Winning Decisions; Wharton on Managing Emerging Technologies; Profiting from Uncertainty; Peripheral Vision; Chips, Clones and Living Beyond 100; and, more recently, Brilliant Mistakes.