Strategic thinking: get on board

Julius Caesar was good at it. Gerald Ratner wasn’t. Richard Branson is pretty good at it, Robert Maxwell wasn’t.

We’re talking strategic leadership. In a nutshell this is about setting strategy and – crucially – believing in and demonstrating that strategy through your own behaviour. The second part is the hard bit.

‘Most strategies fail because the people who devise them don’t factor in that they will have to change personally,’ says Murray Steele a lecturer at Cranfield School of Management. ‘I ask people: “Are you comfortable with changing your behaviour in line with the new strategy?” and they invariably reply: “What do you mean?”.’

Construction company bosses are generally not good at strategic leadership. Witness the number of established, reputable firms with happy clients and skilled employees which go out of business every year.

In 1998 John Egan’s Rethinking Construction report said that the industry was lacking leadership: an enthusiasm and drive among senior managers to make changes. Nearly ten years on, that is still the case.

‘One of the things we have learnt is that the reason why the industry isn’t taking on board suggestions made by [Constructing the Team author] Sir Michael Latham and Egan is that not enough companies have a strategic context,’ says Shepherd CEO Vaughan Burnand, who heads up the built environment group within reform body Constructing Excellence. He believes that many chiefs are just going through the motions of strategy setting, mission statements and tactics without having any personal commitment to them. ‘I think we are at a low ebb for sparkling leaders in construction,’ says Burnand.

Walking the walk is vital for a strategic leader, says Steele. ‘People in organisations don’t follow what people say, they follow what people do,’ he says. ‘If the leaders in an organisation don’t personify their own strategies, people get totally confused, don’t know what the message is and fall back to doing what they have always done before.’

Steele offers an example from housebuilding, a sector with which he is working at the moment. The chief executive may say the company’s new strategy is to focus on the customer. But if he’s still referring to them as ‘idiots who would buy anything’, the strategy will fail, argues Steele.

One of the problems for construction, adds Steele, is that most senior managers have only ever worked in construction, and many in only one firm. If you have grown up with a certain way of working, you won’t feel the need to analyse and challenge it. Also, people may have been promoted through the ranks due to their operational success, without ever having received strategic training.

In construction, there is a great emphasis on ‘getting things done’. This is important when you are trying to construct a building. However, to be a good strategic leader, you need to do a lot of thinking, and encourage other people to do a lot of thinking too.

The granddaddy of thinking on leadership, John Adair, says in his latest book How

to Grow Leaders that there are seven things which a strategic leader must do: provide direction; get strategy and policy right; make it happen; organise and reorganise; release the corporate spirit; relate the company to other companies and society; choose today’s leaders and develop tomorrow’s leaders.

Burnand says: ‘The leader of the company has to understand what the issues are, to put the present state of the company in touch with the future state of the company, to render it sustainable. The leadership role is about connectivity between what you are trying to do and the people you are trying to do it with.’

Steele recommends a seven-step plan (see box below) to aid strategic thinking.

It starts with considering the bigger picture – the economy, political trends or changes – and moves on through your industry, customers and competitors.

There are a whole host of things for firms in the construction sector to consider. Burnand reels off a long list which includes health and safety, the environment, ethics, lean, diversity and supply chain.

Once you have a picture of how life might change within the next few years, you are in a position to work out what your strategy is. Steele recommends keeping it focused.

Shepherd’s strategy revolves around its values and vision. Its values are commitment, honesty and integrity, innovation, customer focus, openness, safety, teamwork and leadership. The ‘vision’ is an A4 document which sets out where the company is going over three years. The strategy is translated to a ‘Hoshin plan’, a Japanese strategic planning tool to transfer strategic goals to an operational level.

What is a leader like? There are many lists, but these are the qualities Adair thinks a leader needs: enthusiasm, integrity, toughness coupled with fairness, humanity, confidence, humility and courage. If you’re a leader, people have to want to follow you.

The latest thinking on leadership is that it doesn’t just come from the top. There must be leaders at team, operational and strategic levels. We should qualify that by saying this is the latest Western thinking, since Japanese firms have been managing this way since the 1960s. Indeed, so convinced of the Japanese model is Burnand that he is calling his drive to spread the company’s culture to project level The Shepherd Way (one assumes in homage to The Toyota Way). So now Shepherd’s directly employed bricklayers come along to workshops about the company’s values and vision. And the contractor is applying lean principles, where workers are involved in planning the way work is done.

Things are starting to make sense, says Burnand. People at project level now understand how supply chain management fits into the process because there is a strategic context for lean practices.

Don’t expect to become a good strategic leader overnight though... these things take time. Burnand is already into year six.