The Rise of Strategic Leadership

Abstract

This chapter is focused on the meaning, importance, and architecture of the strategic leadership phenomenon. The chapter positions strategic leadership as s distinct area of theory and research that connects the disciplines of strategic management and leadership and argues that strategic leadership shares the plurality of meanings of both underlying concepts. Strategic leadership is understood as a crucial instrument in an organization’s interaction with its surroundings; it integrates coordination efforts in an organization and sets the framework for the fulfillment of the mission and for outlining of a desirable future. The author argues that strategic leadership is enacted, or in other words, socially constructed (it emerges from organisational reality) as a response to the need for congruence between chosen guidelines for action and actual organisational action.

Strategy and Leadership

In the last few decades, the construct of “strategic leadership” has originated and developed as a distinct area of theory and research that connects the disciplines of strategic management and leadership within social sciences.

Strategic management is much more focused on strategic choices and strategic decisions than on the processes by means of which such decisions are made or implemented, whereas leadership theory based on classic ontology mostly deals with matters of the “leader–follower” relationship in teams or at lower organisational levels, with little emphasis on actions of organisational leaders (Yammarino & Dubinsky, 1992; Wang et al., 2012).

There are difficulties with the circular definition of strategic leadership. Strategic leadership is a general linguistic construct, a neologism that connects two categories the meanings of which are elusive and variable depending on the context in which they are used.

Strategy was created in order to explain the behaviour of people, organisations and other social entities when interacting with the environment, and the intent behind such behaviour. As pointed out by Henry Mintzberg (1994, p. 75), strategies are unique concepts that exist only in people’s minds and are not sharply-defined entities to be stacked up like crates in a warehouse. People use them to try to explain the world around them, to give it meaning, to recognise and determine its purpose, to create a framework within which actions taken in this world that surrounds them can be influenced.

Strategy is not a coherent thought construct with unambiguous meaning to which we can attribute an indisputable interpretation. It is a multi-signifier with a plethora of signifieds that change and expand; we know that there is no possibility of finding its “final meanings.” Strategy may be observed from a perspective provided by Derrida’s concept of différance, a word that cannot be easily translated but that can be understood as the special mechanism used to produce meaning.¹

It is a transnarrative and brings a multitude of various and variable meanings, tones and definitions. As a concept, it is mainly related to the most important aspects of being, a holistic view of and a relationship with the future, as well as a selection and radical separation of what is important from what is not important. In addition, strategy is an idiosyncratic idea and a mystical aporia, a collection of mystifying insignias that attribute importance to a particular social constructed entity; it is in contrast to less important, minor manifestations. Strategy is difficult to define, and it is accompanied by many different conceptions, metaphors, images and stories that come with it.²

Meaning is given to strategy depending on the discourse, as well as the historical and cultural context.

Strategy emerges in the interaction of important actors involved in creating meaning through their interpretations. Instead of focusing on decision-making, strategic leaders would concentrate on the values, symbols, language, and dramas that form the backdrop for decision making structures (Smircich & Stubbart, 1985, p. 731). Strategy exists and lasts as an idea and/or as an action, woven into the world and language of leaders, managers and organisations.

Strategy provides the fundamental justification to an organisation for its existence: ex ante or ex post interpretation of strategy is the most important part of the managerial elite’s task in seeking and creating organisational purpose (Tipurić, 2014, pp. 27–29). It is interpreted as imaginary, visualised, mind-made and recognised; however, it is also noticeable in designed or observed behaviour patterns. At the same time, it is a focus on what is important and it creates a structure that establish order in networks of meaning.

It may be a reflection, mental representation, cognitive labelling and sensemaking, as well as an action, a type of activity or an execution. It is observed in the consistent and integrated behaviour of social entities, via purposefully combined and interconnected activities, rules and routines, through which one may identify the reasonableness of action and its rootedness in the social environment in which it is manifested.

Leadership bears several meanings, as we have already highlighted. Leadership is a concept that denotes an individual or a group of individuals whose authority has been accepted by others. Secondly, leadership is a process in which the set goals, plans and tasks are realised through exerting influence on one’s followers and their behaviour. Thirdly, leadership may be viewed as a relation between two persons or as a multilateral relation in hierarchies and networks that connect people. Finally, leadership is the connection between collective intentionality, collective action and the desired outcomes: it exists as a guiding, integrative and coordinating mechanism of common action in the collective.

Strategic leadership shares the plurality of meanings of both underlying concepts, producing different meanings which are not mutually exclusive and which adequately point to real and perceived dimensions of the phenomenon.

It is a social construct sui generis: researchers and practicians use their knowledge to form social facts that influence the world of the phenomenon; in fact, they constitute strategic leadership, impose properties on it and create it.³

Construction of Strategic Leadership

There are multiple ways in which we can approach the understanding of strategic leadership. Different perspectives make it difficult to establish a stable symbolic canopy, although nowadays no one can dispute the creation of an “autonomous sub-universe of meaning”⁴ of strategic leadership, which has the capacity of a feedback effect upon the persons who have produced such a meaning.

Firstly, when we add the attribute “strategic” to a phenomenon, we emphasise its significance and isolate its relevance in regard to the underlying phenomenon. Concepts such as strategic plan, strategic thinking, strategic behaviour, strategic move, etc. are subgroups within the basic category, with connotations of the essential and the critical as a common feature.

What do the “strategic” attributes of an action or thought have in common? It is undisputed that “strategic” means importance in and of itself, but also in regard to what is less important; “strategic” things are significant and often have an existential underlining; “strategic” connotes fated predetermination and alchemical magic of action or thought about essential matters that concern the social entity. In other words, the attribute “strategic” is linked to separating the class of main and particularly important components in a class of manifestations or constructions. For instance, in that regard, the most important decisions that define the being and the future of an organisation are referred to as “strategic decisions.”

Franklin (1998, p. 320) points out: The word ‘strategy’ is brought out... when writers and speakers, theorists and managers are looking for a more impressive word than ‘important’. The construct of leadership suffers from the same ailment, as emphasised by Learmonth and Morrell (2020, p. 20) in a witty parable: Leadership is simply being used almost like an aerosol sprayed over every activity to make it somehow ‘special’.

A similar logic may be applied to strategic leadership, which we can identify as a special type of leadership in important and crucial situations with significant consequences for the collective or the organisation. Strategic leadership can thus be understood as the ability to handle complex problems for which there is no obvious short-term solution, in which the stakes are high, and in which influencing others is essential (Kleiner et al., 2019).

“If strategy is so important”, Knights and Morgan (1991, p. 255) questioned, “how did business manage to survive so long without ’consciously’ having a concept of strategy?” In fact, it would seem that we actively affect the constitution and redefinition of problems and then offer a strategy as their solution.

Secondly, strategic leadership can be understood as a kind of meta-leadership or in other words, a leadership setting that gives meaning and a framework for all leadership activities and processes in a collective or organization.

Strategic leadership integrates coordination efforts in an organization and sets the framework for fulfilment of the mission and for outlining of a desirable future. It is a crucial instrument in an organisation’s interaction with its surroundings.

In other words, it is an integrative activity connected with the ability to create, improve and maintain the capacity for learning, changing and managing strategic thinking in an organization. It helps to face uncertainty, complexity and overflow of information, by requiring timely action and adaptability to changes in the environment (Boal & Hooijberg, 2000). Another function of strategic leadership is efficient mobilisation of available human and social capital of an organization (Kriger & Zhovtobryukh, 2016).

Its purpose is to engage members so that they may play an active role in organisational transformation (Nutt & Backoff, 1993, p. 324), to develop abilities and instil core values (Boal & Hooijberg, 2000) and to strengthen their commitment (Collins, 2001).

This goes to show that strategic leadership implies a need to control the organisation’s destiny. The central issue is the quest for sense and purpose, development and selection of guidelines and developmental trajectories, imprinting of symbols and plausible explanations that can mutually connect and motivate the members of the organisation in common action. It can also be seen as an art of setting boundaries where strategy emerges, a making and giving of sense and purpose of organisational actions (Crossan et al., 2008, pp. 573–574) and as a link between key organisational dimensions: ideology, identity, mission, context and core competencies of an organisation (Worden 2003, p. 32).⁵

This definition outlines strategic leadership as an organisational feature or an integrated process that does not have to depend on individuals or groups that assume the position of formal authority. It can be personalised or depersonalised, concentrated or dispersed, pertinent to only one collective or pertinent to an alliance or network of individuals, groups or organisations.

Thirdly, one can separate strategic leadership from “ordinary” leadership, depending on its position in the organisation. According to this idea, “ordinary” leadership deals with relations within an organisation (“leadership in organisations”) whereas strategic leadership, on the other hand, focuses on leading entire organisations (“leadership of organisations”) (Boal & Hooijberg, 2000).

Leadership of whole organisations is usually entrusted to an individual or a coalition of people with the highest authority and influence in an organisation (“upper echelons”) who are at the top of the hierarchical ladder (Hambrick, 2007). Position, role and activities of upper echelons greatly differs from positions and activities of all other individuals who have different managerial responsibilities and authority in an organisation.

This prompted some scholars to attempt to distinguish between theoretical approaches: according to them, leadership theory focuses on leaders at any level of an organisation, from heads of smaller or larger teams or groups, to foremen or managers on all levels, whereas strategic leadership theory focuses only on individuals at the top level of the organisation (Hambrick & Pettigrew, 2001).

It is common for strategic leaders to be entrusted with tasks such as: (1) formulating organisational goals and strategy, (2) developing structures, processes, controls and core competencies for the organisation, (3) managing multiple constituencies, (4) selecting key executives, (5) creating the context for grooming the next generation of executives in the organisation, (6) providing direction with respect to organizational strategies, (7) maintaining an effective organisational culture, (8) sustaining a system of ethical values, and (9) serving and acting as the representative and negotiator on behalf of the organisation vis-à-vis external entities such as government and other organizations and constituencies (Bass, 2007, p. 36).

Successful strategic leaders need to be good at coping with paradoxes (Peters, 1991; Wang et al., 2012), possess mental elasticity and the quality of grasping time, from the past to the future (Goldman, 2012, p. 27; Liedtka, 1998), develop a capacity for dialectical thinking (Lloyd, 1990; Zhang and Chen 1991, according to Wang et al., 2012), know how to deal with contradictions, and move away from one-dimensional and naive interpretation of reality.

Apart from the relational “leader–followers” activities characteristic of “ordinary,” analysis of strategic leadership cannot be complete without including strategic and symbolic activities (Cannella, 2001), or in other words, without an insight into the characteristics, cognition, behaviour, actions and strategic choices of persons on top positions in the organisation, including the connection between those attributes and organisational performance in the broadest sense (Hambrick, 2007; Finkelstein et al., 2009, p. 4).

In this context, strategy becomes the punctum saliens of strategic leaders’ work. As emphasized by Porter (2001), the role of strategic leaders is to teach others about strategy, to act as a barrier preventing any straying from it, and to define limits for organisational action. They make and communicate decisions that affect the future of the organisation (Zaccaro, 1996).

From a pragmatic viewpoint, strategic leadership is the ability to influence others to voluntarily make day-to-day decision required to improve long-term survival of the organisation, while at the same time ensuring its financial stability in the short term. Rowe (2001, p. 83) explains that such definition implies an ability to influence subordinates, peers, and superiors and that the leader understands the emergent strategy process that some authors consider more important than the intended strategic planning process for organizational performance.

Former British Petroleum CEO John Browne emphasised that the important constitutive elements of leadership at the highest level are the following: (1) identifying possibilities that other may not have identified, (2) use those possibilities quickly and completely, (3) inspire people to achieve more than they think they can achieve, and (4) convince them that they should never be satisfied with their present position (Prokesch, 1997).

Fourthly, strategic leadership can be explained as a reflection of ruling ideologies and power structures in the society and in the organisation.

This approach interprets strategic leadership as a phenomenon used to obscure and cover up the obvious legitimacy of existing social relations, specifically in terms of maintaining and strengthening the position of some interest group in order to retain power and the constellation of influences in the organisation and around it. It additionally helps to justify and reproduce existing power relations, resource inequality and injustice in organisations and in the society.

A number of scholars have attempted to observe strategic management, and consequently strategic leadership as well, from a viewpoint inspired by the Critical Theory of the Frankfurt School. The idea is to emphasize the discursive and ideological dimension of strategy, which is close to post-modernist criticism, but with a higher degree of optimism, believing that change for the better can happen. As the advocates of the Critical Theory believe, strategic management is a privileged area of management theory and practice one that is very much involved in maintaining existing unfair social relations and, as such, it cannot be politically neutral.

Consequently, one may postulate that the construct of strategy was introduced and envisaged to legitimize the actions of managerial leaders and to justify the importance of their position in inter-organizational structure and processes and in corporate governance relations. In this vein strategy can be understood as part of a discourse of power which reproduces certain sets of hierarchical social relationships through legitimating them with reference to positivistic and scientific norms of rationality (Knights & Morgan, 1990, p. 477).

Strategic leaders are first and foremost advocates and interpreters of desirable social values and promoters of mutually agreed interests of key interest and influence groups; they could be referred to as beacons of predominant ideologies.

They are ideologically dependent and tangled in webs of discourse, in which context strategy constructs a myth of commonality of organizational purpose by positing lofty and unattainable aspirations (Harfield 1998, according to: Levy et al., 2003, p. 97).

Their duty is to preserve the existing power and ideology in the organisation and in the society: they use strategy as a cohesive instrument of conservation of a certain state of affairs, obscure exploitation and produce narratives and other symbols that create an illusion of purposefulness of their action.

Finally, we can view successful strategic leadership as a phenomenon that changes organisations and the overall society for the better.

Each organisation is a part of the society: its activities affect, to a greater or lesser extent, our common present and future. Selfishness and lack of understanding of social reality, social insensitivity and environmentally harmful behaviour create massive damage, destroy modern-day institutions and undermine trust that has already been created.

Strategic leadership entails civilizational responsibility. The world needs to be changed and the planet has to be protected in the process: in this type of work, leaders need to play a vital role, focusing on the interests of future generations and on social benefits. The creation of new value and its allocation has to be contextualised, including by distancing it from short-sighted interests based on greed and avarice. The recent pandemic crisis has shown just how important social responsibility, acting in common interest and departure from myopic view of reality actually are.

Hence, strategic leaders must not stay isolated behind closed doors of their offices where they discuss only the survival and prosperity of an organisation. They have to be capable of seeing beyond the horizon and the boundaries of the organisation, and take into account the long-term needs of the entire civilisation. Their leadership has to embody “doing what is right,” irrespective of the palliative and partial benefits endowed in the holders of positions of power.

This again raises the eternal question of how to solve the paradox which, to paraphrase Aristotle, can be outlined as follows: in order to be capable of doing what is right and good, we have to know what is right and good; and to know what is right and good, we first have to do it. The future of our civilisation and preservation of the planet for future generations is the only meta-criterion that is appropriate, in our view.

Collective intentionality and collective action need to be ennobled by the highest human values. Balancing between economic, social and environmental objectives has to be the cornerstone of strategic leadership in collectives on all social levels: from small groups to the largest global organisations. Responsibility to the society, the environment and to those that will come after us becomes the quintessence of strategic leadership.

Realm of Strategic Leadership

Any organisation needs strategy in order to create new economic and/or social value.

Strategy may seem as an organisational supra-function: an integrating arrangement that is to optimize and coordinate organisational action. It acts as a support for the collective in internal and external interactions and transactions; it helps the organisation and its members to act in unison as a coherent group. As Rumelt (2011, p. 2) noted: The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors.

It is identifiable in key images, narratives, plans, decisions and activities, in the selected model of interaction with the surroundings, in resource combinations and dynamic capabilities, in the leaders’ ideas about definition and future of the organisation, in the degree of innovativeness and entrepreneurial orientation, in the speed of adaptation to change in the environment and in a whole series of other characteristics, attributes and organisational features.

On the other hand, organisational action is an impression onto reality: a transposition of collective intentionality and strategy into organisational decisions and procedures.⁶ Organisational action is characterised by permanent, almost change-resistant behavioural patterns. Routines, processes and standardisations help to connect and integrate, whereas clear and indisputable objectives facilitate work focus and implementation of what has been planned.

Traces and symbols of strategy can be seen in implemented organisational action. Moreover, Mintzberg (1987) paraphrases the philosopher David Hume, emphasizing that strategies result from human actions, not from human design. According to Weick (1987, p. 231), strategy is a form of discovery of meaning that arises from actions that have been taken. Just like in other situations, its content and meaning depend on the degree to which they are arranged into sensible, coherent configurations.

Clear and unambiguous strategy should ensure consistent and non-redundant behaviour of an organisation. Uniformity in action is the premise of coordinated activity, loss prevention and better monitoring of resource usage. This requires discipline and commitment, and also stability in organisational action.

The need for strategic leadership arises due to a gap between strategy and organisational action.

Strategy defines the relationship of the organisation and its environment; interaction with the world beyond its boundaries needs to be non-conflicting, non-redundant and manageable. Existence of coordination mechanisms in the implementation of organisational action is a prerequisite without which this cannot be achieved.

Strategic leadership bridges this gap. It is intended to direct various organisational activities, resolve the major issues and disagreements concerning key issues, encourage members to achieve the best possible results, and give sense to current measures and performances in the light of an imaginary future or a set of principles that justify joint organisational efforts.

Enactment of strategic leadership creates the prerequisites for congruence between key organisational components (Fig. 3.1).

Fig. 3.1

Enactment of strategic leadership

Strategic leadership is inseparable from social expectations and organisational aspirations in which ambience is constructed, meanings are created and instilled, and purpose for the entire organisation is provided. It purposefully connects the organisation with its surroundings, while simultaneously taking into consideration the constellations and needs of internal and external stakeholders.

To be more precise, an organisation is not a carved-out, self-sufficient fragment, but rather an indivisible part of the overall social fabric from which our present and future are sewn. It is a socially-constructed reality (Berger & Luckmann, 1991; Morgan, 1986), an ideological stage and a power playground, an entity comprised of intertwined interests that has sociopolitical and economic relations with actors from its environment, a collective in which mutually dependent actors take on roles and assignments.

Different environment settings can significantly affect strategic leadership and the ways of establishing direction and achieving consistent action in an organisation and its permeation into its surroundings. Diversity of ambience affects the differences that are manifested in events, processes and elements of strategic leadership, much like the organisation and its strategy are decisive to the form of strategic leadership.

The degree of uncertainty also affects strategic leadership. The nature of leadership is not the same in a simple and in a complex environment: demands of an organisational environment that is uniform and monolithic are different from those found in one that is turbulent and heterogeneous. In some situational configurations leaders have more managerial discretion, whereas in others their decision-making margin is narrowed and restricted by the characteristics of the organisation and environment. The more complex and larger the managed organisation and the more versatile and unpredictable the environment, the more complex the demands of strategic leadership.

Configurational characteristics of the organisation directly influence the form of strategic leadership, just as strategic leadership defines the organisation. Strategic leadership shapes and connects strategy and organisational action, but they in turn define strategic leadership itself. Sometimes strategy encourages the creation of an adequate form of leadership, and sometimes it can be identified and distilled from organisational actions the consequences of which might stimulate the emergence of identifiable behavioural patterns.

Therefore, strategic leadership appears as a necessity in order for the organisation to adequately adjust to its environment. Without strategic leadership it is hard to expect the encouragement of strategic thinking when it comes to purpose or direction of action, or the connecting with collective action. It emerges as a distinctive organisational response with the aim of integrating the organisation, inspiring its members and strengthening collective identity. The classic ontology of leadership is not sufficient for explaining the emergence, logic and role of strategic leadership in organisations.

Indeed, connecting strategic leadership with high-profile individuals on top of the organisational hierarchy seems logical. However, is it always so and does this apply to every situation? Is it possible to interpret the agere sequitur esse (“action follows being”) logic differently in case of strategic leadership? In other words, can it exist without clearly identifiable persons as leaders and how can it manifest itself in such case?

If we were to answer the last question with “yes”, then it would mean that we accept the assumption that strategic leadership can outgrow the construction based on the “leader-followers” relation, i.e., the one that is based on classic ontology.

We recognise strategic leadership as a characteristic of an organisation that does not have to be dependent on formal authority. This means that roles and functions of strategic leadership can be divided and dispersed between multiple actors in the organisation, but also formalised in routines, procedures and activities embedded in the organisational system.

There are cases when leadership of this type is structurally predetermined by existing administrative mechanisms, formally established rules of conduct, sometimes even by culture and ideological beliefs predominant in the organisation; at times it is greatly dispersed and depersonalised, whereas sometimes it is changeable depending on the types of tasks and challenges and, as such, not reliant on hierarchical relations.

In large and complex organisations that include different types of business activities and that are functioning at numerous locations, it is possible to vertically distribute strategic leadership to follow the hierarchy, in order to ensure an adequate response to demanding challenges of leadership and management. The formal authority chain in such situations serves as a transmitter for distributing strategic leadership within the organisation.

Apart from that, strategic leadership may also emerge in social networks of leaders inside the organisation and around it. It can vary depending on the type of tasks and problems that need to be dealt with, and distanced from “heroic” personalities usually associated with leaders or strong interest coalitions of a handful of leaders who are dominant in the organisation.

Even complete depersonalisation of strategic leadership is possible: in situations where it is completely separated from the actors and when it can persist even in the absence of any individual.

Depersonalised strategic leadership can appear in the form of putting the collective in charge, especially if there is a symmetrical power structure, a strong commitment to the mission and ideology as a result of existing beliefs and values or as a result of successful indoctrination of members. Presence of a strong strategic leader is not necessary in order to fulfil a common mission. There are examples of collective leadership of various citizens’ initiatives, social and political movement, business associations and cooperatives, which indicates that there is a need to further study the phenomenon of this type of strategic leadership.

It may be possible to transpose the idea of coexistence of two leadership structures (developed in the complexity leadership theory) into the realm of strategic leadership. According to this theory, organisations simultaneously have (1) leadership based on administrative structures and formal positions, and (2) adaptive leadership based on a dynamic of relationships and complex interactions in social networks, which is of particular importance in organisations in which the creation and dissemination of knowledge and information is a crucial determinant of their activity (Kriger & Zhovtobryukh, 2013; Uhl-Bien & Marion, 2009). We can add to this a third structure: strategic leadership that supports value-based, institutional and social arrangements that reflect the existing ideology and serve to ensure its survival.

Hence, strategic leadership is a complicated phenomenon that cannot be singularly associated with an individual or with the leadership elite, nor is the answer about the identity of strategic leaders always connected with the characteristics or traits which differentiate them from other actors on the organisational stage. It is enacted, or in other words socially constructed (it emerges from organisational reality) as a response to the need for congruence between chosen guidelines for action and actual organisational action.

Enactment of strategic leadership is the process of cognitive and social construction of internal and external environment, creation of meaning, and acceptance of important narratives and symbols, allocation and acceptance of roles, and interaction within the collective, resulting in strategic architecture—a predominant way of the organisation’s permeation into its surroundings, one that we may see as a process of change management designed to fulfil the purpose and achieve strategic objectives.

Social Construction of Environment

There is no objective reality: organisational actors function in a socially constructed world; their mental models are developed in social interaction and they are inseparable from the context in which they operate. They “construct” their environment by bringing their versions of “order” and categorisation into the environment, failing to take notice of certain objective dimensions and at the same time assigning subjective meanings to their observations.

Their reality is a socially constructed world with clearly perceived roles, in which a plethora of information is processed simultaneously and widespread “recipes” for effective behaviour are accepted unreservedly.

Organisations are embodied through different and diverse roles that are assumed, including those that pertain to position, influence, power and conduct. Construction of role typologies, as pointed out by Berger and Luckmann, is a necessary correlate of the institutionalisation of conduct.” An individual’s participation in a social world thus comes down to playing roles, and “by internalizing these roles, the same world becomes subjectively real to him (1991, p. 91).

To cite the authors, by assuming the role of the leader, an individual has to be initiated into the various cognitive and even affective layers of the body of knowledge that is directly and indirectly appropriate to this role (1991, p. 94).

Strategic leadership is also “a stage” that requires definition of roles to be played. Some members of an organisation assume the roles of strategic leaders and develop socially adapted mental models that delimit the space for creation of strategic versions and development of strategic actions (Sparrow, 2000, p. 19). Together with other actors, they participate in the construction of an ambience in which strategy will emerge, and assume a key role in connecting it with organisational action.

The realm of a strategic leader’s thinking and acting is a world of enactment, where the boundaries in the two-way relation between environment as the object and leader as the subject are very vague (Weick, 1979, pp. 164–166).

Sensemaking and Orchestrating Meanings

Strategic leadership needs to make and give sense, construct meanings and imprint symbols on the organisational stage. This can be explained metaphorically as the creation of a screenplay and assignment of roles of director and actors in an imaginary play.

The symbolic function is exceptionally important in understanding the way strategic leaders operate. We accept the idea that the key factor of strategic leadership is the capacity to influence and organise meaning, especially meaning that purposefully connects bundles of individual and group interests and influences goals, decision-making and patterns of organisational behaviour.

The task of strategic leaders is to give meanings to relationships, symbols and other artefacts that constitute reality, and to use existing or construct new ideologies in searching for and giving sense to organisational action.

Strategic leaders interpret the organisation and the world around them based on their own cognitive structures that indicate how they internalise their knowledge and understanding of organisational life in the form of a simplified representation of reality (Hodgkinson & Clarke, 2007; Hodgkinson & Healey, 2008).

Using their own cognitive structures (mental models), they simplify the complexity associated with the surroundings and, during that process, determine which stimuli from the environment will be noted and which will be ignored (Starbuck and Milliken 1998, according to: Hruška, 2011, p. 47). These are different structures of knowledge in the form of representations and pictures that leaders have about how the world around them functions (De Wit & Meyer, 2010, p. 77).

Two cognitive processes are key: sensemaking and sensegiving; they both lead to collective interpretation of decisions and to taking of organisational action.

Firstly, sensemaking is a departure from commonality that helps to constitute an ambience of strategic leadership and interpretation during the formulation and implementation of strategy. It is a social activity motivated by something unusual, unexpected or very important—this involves any circumstance that departs from routine (Weick, 1995; Thomas & Porac, 2002; Narayanan et al., 2011).⁷

Secondly, sensegiving is an act of articulation by strategic leaders and their giving sense to change in the organisation as well as formulation of organisational interpretations (Gioia et al., 1994). This represents the leaders’ steering of the process of sensemaking and construction of meaning in other members of the collective towards the preferred definition of organisational reality (Gioia & Chittipeddi, 1991). Use of signs and symbols is crucial in sensegiving (Narayanan et al., 2011).

Language and Culture

Similar view of reality and common mental models are the result of successful construction and they are suitable for understanding the position of all important organisational actors. Members interact with one another, exchange information and combine their existing knowledge structures. The same applies to other actors in the surroundings who have a cooperative or competitive contact with organisational interactions and transactions and who encounter similar problems and reach similar ideas about how to solve them. In time, their views of the world become more and more alike, and similar beliefs and ideas about things that define the organisation and its environment emerge.

The way of understanding things eventually becomes similar among members of the organisation; similar perceptions about the settings and milieu are developed; a common language is made; the way the situation and the surroundings are viewed is shared, and common “systems of meaning”⁸ are created, thus resulting in an “enacted environment” being constructed. Story-telling, rhetoric, myths and signs play a major role in this process.

If key actors on the stage of the organisational game do not share the same fundamental beliefs and values, understand messages and symbols in the same way, if they do not have similar cognitive filters that simplify the reality for them in a way that is acceptable, and if they fail to even seemingly understand the allocation of roles in the process of division of power—they will have a hard time agreeing about the character of reality.

What is obligatory in all this is the role of existing organisational culture through which history, tradition and ideological assumptions are integrated, and collective beliefs and views within the organisation mirrored. It can be said that culture directly affects sensemaking and sensegiving, just like sensemaking and sensegiving can affect the potential (usually slowly occurring) change of organisational culture.

Strategic leadership plays an important role in the creation and change of language and organisational culture. Its enactment is intended to simplify the multiple and complex organisational relationships and assign clear roles; convergence and coordination need to be tightly interwoven with strong and inspiring messages and symbols. Rhetoric and hermeneutics are irreplaceable elements of leadership: they serve as a mantle without which the core, the content, becomes pointless.

On top of that, success of leadership is to a greater or lesser extent connected with deep immersion of members of the collective in a formed atmosphere in which they accept existing constellations and recognise self-fulfilment in the development of mutual relationships. The members’ commitment is a consequence of the capabilities of strategic leadership in the context of creating a climate of togetherness and a strong identification with the organisation, recognition and sharing of collective achievements, and freeing up of individual and group potentials.

Ideology and Power

Ideology defines the space for strategic leadership, it is the connective tissue of the collective and it provides justification for organisational existence. Strategic leaders rely on ideology because it underlines all the basic organisational values, gives intrinsic purposefulness to action and connects followers, making them more or less committed and loyal members of the collective.

It is impossible to understand the stage where strategic leadership is played out without social and organisational ideology and existing structure and dynamics of power. Ideology encourages the development of acceptable discourses, it binds together beliefs and values of members of the collective, establishes relationships and gives meaning to the strivings and intentions of strategic leadership.

Ideology always exists, but it can be weak, inconsistent and confusing to members of the organisation. Existence of heterogeneity in organisational values, unclear ideological assumptions, incoherent and sometimes opposing views of the world among individual members of the collective, insufficient level of identification with the organisation and the leader, additionally hinder the activities of organisational leaders.

Strategic leaders use power to facilitate the reaching of objectives that arise from strategic intent. They choose strategies of influencing the relationships inside the collective in order to achieve cohesion and organisational harmoniousness, to additionally motivate and inspire others in order to fulfil the tasks that are relevant for reaching the defined objectives.

Power does not only have to be an instrument of strategic leadership; sometimes it is its primary meaning and content. The goal in such cases is a self-centred: to additionally strengthen one’s position in the society and to use the organisation as means of self-actualisation and one’s own promotion.

The stage of strategic leadership can also, over time, become an arena where one fights to achieve maximum influence in constellations of key organisational constituents. Competing for the position of the dominant entity in the organisation can blur the actual essence of strategic leadership, and so can the “stretching” or “narrowing” of the space for managerial discretion in the decision-making process (Tipurić, 2011).

Correctness

In modern-day world, we must not observe strategic leadership merely as a performative construct, not taking into consideration the long-term interests of the society; short-sightedness, alienation and inhumaneness must not be its support pillars. Humaneness and moral correctness of organisational action are no longer just pretty accessories which differentiate those who are better from others who are worse, but rather they are imperative substantial elements that any leadership must take into consideration.

One should also refrain from what we might call, similarly to Weberian determination, a “technical rationality,” a rationality without morals that encourages the creation of dehumanised, highly bureaucratised relationships that destroy the humane mission of new age strategic leadership.⁹

Sometimes organisational actions can have consequences that may jeopardise the community, disrupt social relations and ethics, pollute or even devastate the environment, deplete resources and be in collision with the planet’s sustainability and prosperity of future generations. Such actions may, from an opportunistic point of view, be successful in the short term and bring revenue for the organisation and/or owners of key organisational resources, but at the same time they are often socially unprofitable and destructive to social values.

A century ago, strategic leaders faced completely different, significantly smaller social expectations and demands. However, the world has changed almost beyond recognition since then. Over time, awareness of social responsibility and environmental protection, or in other words, awareness of inseparability of an organisation from its environment, has become much greater.

Gender, racial and all other types of equality, economic democracy and fairness, acceptance of diversity and overall humanisation have emerged as solid constituents of modern-day society. The ambience in which contemporary leaders think and act cannot even be imagined without considering the civilisational advancements that have done away with self-interest as the sole motive for action.

Construction and interpretation of reality is interwoven with the thread of ethics, with emphasis on special values and beliefs that strategic leaders bring into the ambience (Rowsell & Berry, 1993). The ethical dimension of their view of the world defines the boundaries of ideological space: it determines the ways actors on the stage think and act, the ways facts are fit into a mould and interpreted, and the consequences that can be expected from dissemination of power and dominance in an organisation and its environment.

Architecture of Strategic Leadership

Strategic leadership is a key configurational characteristic of an organisation: a bond between strategy and organisational action that need not always be observed as a set of tasks to be performed by top leaders. Therefore, it is an organisational phenomenon and not a designation automatically associated with persons on top positions in an organisation.

There are two opposing views in this context. According to the first one, organisational leaders have the crucial role in defining strategic intent; they define modes and dynamics of the organisation’s adaptation to its surroundings; they use their skills and knowledge to connect, motivate and integrate members of the organisation; they directly and indirectly influence the outcomes of leadership and organisational performance.

According to the other view, the environment and the collective play a more important role than the formally positioned leaders. Structure, rules, routines and processes in an organisation dominantly affect strategic leadership and leaders do not have too much managerial discretion: their space for independent making of strategic decisions is narrowed and limited.

In order to understand strategic leadership, one has to recognise key meta-activities and meta-processes that can be assigned to different actors in the organisation. Primarily, one has to identify the architecture of strategic leadership and only then look for attributes, characteristics and performances of persons involved in important decisions, processes and activities.

Architecture of strategic leadership is the result of orchestrating meaning and important interpretations that emerge in the interaction of organisational actors and build the main platform for organisational action. It is also defined by other elements of enactment: social construction of ambience and role assignment, language and culture, social expectations, ideology and power structures, and ultimately the issue of moral appropriateness in organisational behaviour.

It is the result of thoughts and actions of the leader or a coalition or network of leaders; and/or social, institutional and organisational properties; and/or collective intentions and agreements.

It refers to the role and place of creative, managerial and administrative mechanisms and clearly positions strategy in the centre of organisational goings-on. It provides a framework for defining main priorities, endeavours and guidelines, and for aligning the organisation with the determinants of the present and future environment.

Regardless of those extremes, we believe that it is possible to identify four components of strategic leadership architecture in any situation. These are: (1) strategic direction, (2) external adaptation, (3) integration of collective, and (4) strategic leadership outcomes (Fig. 3.2).

Fig. 3.2

Architecture of strategic leadership

Strategic Direction

The journey from the present towards an imagined future relies on intentions and abilities of key organisational actors in developing the imaginarium of the new reality.

Strategic direction answers the question how organisations deal with the challenges of present and future surroundings. This is a grateful task, because, as Victor Hugo wrote: There is nothing like a dream to create the future.

It creates traces of sense and produces clusters of important meanings for members of the organisation. It comprises the challenges that need to push the boundaries of the action horizon, by bonding people into a collective and encouraging their commitment and identification with the organisation.

Additionally, it integrates the vision and the mission: it shows what the organisation strives to, what the aspirations are, and gives a glimpse of the desired future. Mission interprets the principles of behaviour, recognises the purpose or reason for the organisation’s existence, identifies the basic values, outlines the scope of operation and method of management, and delimits the directions of action. Vision is an individual or group mental image of the future of an organisation and It lies at the heart of organisational strivings (Stacey, 1997).

Strategic direction might involve a different term to express the same meaning, for example the concept of strategic intent.

The domain of strategic intent is broader than the main priorities and strategic objectives and involves distinctive principles and guidelines of organisational action. Hamel and Prahalad (1994) define strategic intent as an ambitious and compelling … dream that energizes … that provides the emotional and intellectual energy for the journey … to the future.

Strategic direction can be the conception of the individual or group holding the top managerial position, or it may emerge as the result of intra-organisational agreements and actions. It can be the consequence of set plans or a lucky outcome after much trial and error in strategic experimentation that has become a behavioural pattern.

In any case, it is a more or less inevitable journey into the unknown; a departure from familiar shores towards clouded and unpredictable horizons of tomorrow.

The role of organisation’s leaders in the forming of strategic direction is often emphasised. However, caution is needed in this context. Some leaders are known as visionaries, while others hardly possess the stuff that key elements of vision are made of. Some of them are unable to participate because they do not have sufficient room available to make decisions, but they are capable of transforming existing ideas into successful organisational actions.

External Adaptation

Interaction between the organisation and its present and future environment is an important element of strategic leadership architecture. Surroundings are inseparable from the organisation; the boundaries between them are often movable, fluid and permeable. Strategic leadership should help to find reactive and proactive ways of facing a dynamic, quick-changing and uncertain environment.

The way the ambiance in which the organisation finds itself is contextualised affects the way the two interact. It could be said that organisations and its surroundings are constructed together in the process of social interaction of key organisational participants, as Smircich and Stubbart (1985, p. 726) noted and added: organizations and environments are convenient labels for patterns of activity.

The same applies when we observe organisations that compete in the market. Indeed, it is hard to challenge the idea that organisations and markets are sticky, messy phenomena, from which strategies emerge with much confusion and in small steps (Whittington, 2001, p. 21).

External adaptation is at the same time a process of cognitive constitution and action adjustment. Subjective interpretations of external information are objectivised through the actions of leaders, organisations and other participants in the environment (Porac & Thomas, 1990; Thomas & Porac, 2002).

It is necessary to develop and support the process aimed at proactive maintenance of the organisation in continuous balance with its surroundings.

There are two perspectives, the managerial and the evolutionary one, and they view the strategic leaders’ potential of affecting the organisation’s adaptation to its surroundings differently.

Managerial perspective is based on strong trust in the leader, in the leader’s willingness and capability of long-term planning, strategy formulation and decision-making, through which the leader can influence the positioning of the organisation in its environment. Obviously, one should not strive to an unreachable ideal of rational action, but rather one should accept the world as it is and act in accordance with it.

To develop a successful strategy means to align the organisation’s potentials with the characteristics of the environment; adapt oneself to the surroundings and its demands, and, to the extent possible, shape the surroundings according to one’s own needs and abilities. Cognitive, informational, cost-based and other limitations, just like the extent of decision-making discretion, define the perimeters of strategic action. This kind of approach is comparable to Whittington’s systemic perspective of strategy, which assumes that organisations are capable of planning ahead and that they can be efficient in interacting with their environment. Leaders are not simply detached, calculating individuals interacting in purely economic transactions, but people rooted deeply in densely interwoven social systems (Whittington, 2001).

On the other hand, the evolutionary perspective does not ascribe much importance to choices and deliberate action of the managerial big shots. Environment exposes organisations to contradicting selectional pressures so that in most cases it is completely uncertain whose and which strategies will “survive.”

Selection in a social context involves, on the one hand, the processes of learning and discovering, and on the other hand, a selection mechanism of some kind for making choices (Dosi & Nelson, 1994, pp. 154–155). Selection processes often generate unexpected consequences and there are no guarantees that selection will result in survival of the most efficient. According to the evolutionists, surroundings will provide a meta-criterion for the selection of the best ways and strategy versions; the role of leaders of organisations is only a minor one.

Evolutionists emphasize that organisations are not too successful in anticipating and adapting to change of environment. They point out that the importance of deliberate strategic creation is overestimated by strategic leaders and other top managers, and that construction of “long-term strategies” distracts their attention from operational effectiveness and the aspiration towards achieving the highest possible efficacy. This is a view based on which strategic leadership is removed from inventive construction of future environment. Selection on markets will separate those that are fittest in evolutionary terms, those that have opted for strategies best suited to answer the demands of the environment and that consequently have the best performance and chances for survival.

Managerial and evolutionary perspective are extremes between which we need to look for the position of strategic leadership. In our opinion, within the permissible space, strategic leaders need to find adaptive responses to massive and critical changes happening in the environment. This is the key substance of their work.

Integration of Collective

The decisive activity of strategic leadership is integration of the collective. It requires a clear idea of the purpose of common action and the desirable future that is to be realised. Members of the organisation need to be inspired and encouraged, motivated and emboldened in togetherness; they need to be helped to better understand the vision, to accept it as their own, and to invest effort in making it a reality.

Integration of the collective depends on size, complexity and locational distribution of the organisation, or in other words, on the amount of information and scope of tasks that need to be covered in order for strategic leadership to be effective. The more actions performed by the organisation and the greater need for knowledge and special skills of members, the greater the challenges of integration of the collective.

Homogeneity of the collective and organisational cohesion are strengthened by socialisation and indoctrination of members.

Coordination of activities is also important to avoid redundancy, distraction and contradicting organisational action. Coordination-related activities falling within the scope of competence of managers need to be differentiated from those that fall into the category of strategic leadership. Lack of systematic approach and contradiction in the main objectives, policies, activities and programmes is an indication of strategic problems and overcoming those problems is the duty of the leaders of the organisation.

In other words, directing and connecting people in common action is an essential “ingredient” of strategic guidance. Integration of the collective is a prerequisite for efficient implementation of organisational action. Not only members, but also all other factors that are relevant in strategy implementation and that have an interest in and impact on the organisation have to be involved.

In addition to that, strategic leaders need to sensibly and plausibly communicate in order to create commitment and strengthen coherence of action within the organisation. Communication of important narratives, mission and strategic vision, signs and symbols, plays a part in integration. Symbols and rhetoric help with organisational bonding and encourage members to coordinated common action. Telling memorable stories and putting emphasis on select examples can help to strengthen the feeling of connectedness and dedication among followers.

Integration of the collective depends on the traits that strategic leaders possess. Integrity is always central, and it has to be accompanied by imaginativeness and a high level of social awareness, self-confidence and determination. Leadership capacity, credibility, reputation, reliability and consistency between what is said and what is done encourage the creation of an atmosphere of confidence and belonging, with people trusting the leadership and the organisation, and inspiredly performing their assignments.

The relationship between the collective and the persons who take on the role of strategic leadership is not a simple one. Formal authority is not a guarantee that someone will become a leader. The collective has to accept a person’s leadership and adhere to this person’s ideas, intentions and conduct.

Imposed and unaccepted managers can rarely achieve anything more than what is guaranteed by the power of their position. They are unable to create a proper connection and motivate people in the performance of their assignments. Leader identity cannot be created without the collective endorsement of the actors the leader is supposed to lead (DeRue & Ashford, 2010).

Strategic Leadership Outcomes

The key result of successful leadership is an incremental or radical change in the organisation that can be recognised as progress in comparison to the present situation.

Taylor-Bianco and Schermerhorn (2006, p. 458) posit that organisations expect “commitment to continuous change” and that it is “ever-present as a goal.” They further note: people in organizations are expected to both change and perform well at the same time.

Success of an organisation can be decomposed to two elements: (1) efficacy of strategic leadership, and (2) efficacy of all other actors in the organisation and in its surroundings. The greater the share of the first component in overall success, the greater the sensitivity of the organisation to the quality of strategic leadership.

If strategic leadership is seen as personalised, then efficacy is directly associated with the skills, knowledge, human and social capital and managerial capabilities of organisational heads. Key capabilities are connected with formulation and implementation of strategy, articulation of a superior vision, potential for strategic thinking and excellent management of human potentials. If, on the other hand, it is understood as a characteristic of the collective, efficacy is related to the quality of key managerial processes (integration, alignment and commitment) in situational challenges an organisation might be faced with.

Besides that, strategic leadership outcomes are also represented in the selection of objectives that are set and that serve as a measure of success when organisational performance is observed a posteriori.

The setting of objectives is the process of determining the main areas of performance that can be controlled and delimited in time. It was Marcus Aurelius who wrote: People who labour all their lives but have no purpose to direct every thought and impulse toward are wasting their time—even when hard at work (2001, p. 23).

Strategic leadership needs to encourage the collective in the discovery of objectives that can be identified as possible outcomes and that can be the bonding and integrating force of the organisation.

Specifically, a lack of systematic approach and contradiction in the main objectives, policies, activities and programmes is an indication of problems in strategic leadership.

Strategic objectives need to be demanding, challenging and ambitious, they need to really stretch toward the limits of what is achievable so that the organisation may reach its full potential. Still, the objectives must not be unrealistic and unachievable, extending beyond what is possible in view of the available resources and capacities.

This approach was well portrayed by Porras and Collins (2002), who introduced the concept known as BHAG, the acronym of Big, Hairy, Audacious Goals. The underlying idea is the assumption that ambitious and almost unachievable goals can motivate people inside an organisation to achieve much greater things than what is normally expected from them. According to the authors’ opinion, striving to exceptionally challenging goals gives greater chances for success of organisational action.

Stretched objectives are based on the assumption that it is necessary to motivate people and focus their creative energy by setting high levels of organisational aspirations.¹⁰ We can paraphrase the words of the famous, early twentieth century car designer and manufacturer Henry Royce: Take the best that exists and make it better. When it does not exist, design it.

Strategic leaders might experience problems in applying the BHAG concept if organisational potentials and culture do not sufficiently accommodate large and radical steps, and when there are objective obstacles and limitations in the surroundings that might hinder such significant achievements.

Finally, it should be pointed out that defined objectives need to reflect multiple harmonized interests that emerge within the collective and around it and that are in furtherance of general welfare and well-being, and ultimately survival of the collective and its environment.

The issue of creating new value in organisations can, therefore, not be analysed without taking into consideration the society and the environment, specifically social profitability and protection of natural resources.

Responsible leadership has been developed as a distinct construct that observes leadership through the leader’s interaction with other interest groups (with the aim of balancing out many different needs), where the leader’s success is measured based on their providing of legitimate solutions for everyone involved, by including the economic, social and environmental dimension in the targeted domain of organisational action (Waldman & Galvin, 2008; Voegtlin et al., 2012; Carter & Greer, 2013).

Recently, the need for a triple bottom line has been underlined. This concept includes economic, environmental and social lines as the prerequisites for achieving outcomes of profit and non-profit organisations in the twenty-first century.

Important objectives can be categorised in three groups (the triple bottom line concept), which reflect the domain of organisational action: the economic, the environmental, and the social domain (Elkington, 1997). In other words, organisations and their leaders need to simultaneously focus on economising, sustainability of life on the planet, and on people and the society as a whole (Fry & Slocum Jr., 2008). This leads to additional tensions being put before strategic leadership, considering the fact that those objectives exist in a natural conflict, which is then reflected in the expected results and achievements of organisational action (Fig. 3.3).

Fig. 3.3

Triple bottom line in contemporary organisations

Firstly, the economic dimension of objectives is associated with economic prosperity, business success, and growth. It underlines the need for rational use of organisational resources, with indicators such as return on investment, revenue, profits, and other. Information about industrial profitability and other comparable indicators for comparison with the competition (such as sales growth rate, market shares, innovation success and the number of new products, numeric distribution, and other) influence the defining of economic objectives and measures of performance of a company.

Secondly, the social dimension of objectives presupposes a responsibility to the community and to people. Social measures reflect organisational commitment, welfare and vitality of the members of the organisation and the community, charitable contributions and quality of organisational connectedness in the society. Strategic leaders need to impose socially responsible business as an imperative for their organisations. The objectives and measures have to incorporate good-quality inclusion in the community, health and welfare of employees, commitment to society, contribution to community vitality, but also contributions toward humanitarian and other social agendas (Fry & Slocum Jr., 2008; Carter & Greer, 2013).

Thirdly, the environmental dimension of objectives reflects the importance of minimising the harmful effects of human action and the overall collective presence in the environment. Environmental indicators are based on sustainability of organisational and civilizational existence (e.g., protection of natural resources, balanced consumption of energy, reduced waste and harmful emissions, etc.), or in other words, on helping to preserve the living conditions on the planet (Slaper & Hall, 2011). Successful leadership cannot be separated from the great responsibility we each bear for the future of our planet. Development and expansion of circular economy, lower energy wasting, reduced pollution and harmful emissions, responsible waste management and proper valuable inventory management—all this should be integrated in the target area of modern-day leadership.

Strategic leaders have to overcome the contradictions and try to strike the right balance between the three dimensions. It is not easy to establish and maintain balance between the triad of the target areas and at the same time avoid redundancy, distraction or contradictory organisational action. This is a paradox, but at the same time it is also a challenge when it comes to creating value for the organisation and the society.

Being blinded by (purely) organisational achievements cannot be sustainable: without a holistic approach incorporating social balance, fairness, human rights, ecological challenges and circular economy, as well as the interests of future generations and sustainability of life on the planet as objectives defined and realised by leaders, there can be no prosperity.