An Overall Model of Strategic Leadership

Abstract

As the internal complexity of an organization increases and the competitive environment becomes more turbulent, the amount, complexity, and level of uncertainty of information needed for effective decision-making quickly surpass the cognitive capacity of any single individual leader, however talented or competent. Whether clans, teams, or strategic leadership networks would be a superior alternative depends on the combination of internal and external conditions. In particular, clans are better suited to deal with higher internal complexity because the narrower business area expertise, commonality of backgrounds and strong within-clan culture allow for specialized information gathering, decision-making, and efficient implementation. That said, between-clan competition and within-firm politics makes clans increasingly ineffective when shifting competitive conditions require collaboration across organizational units. In such circumstances calling for exploration of opportunities and the generation of multiple scenarios, teams with less rigid formal structures and dynamically shifting leader–follower roles have an advantage. This advantage comes, however, at a cost of poorer execution capabilities due to less clear accountabilities and the often conflicting priorities of cross-functional team members. When high internal complexity and environmental turbulence require organizational ambidexterity—ability to both exploit and explore, envision and analyze, formulate and implement—strategic leadership networks which mobilize human and social capital across levels of hierarchy and business units become the appropriate solution.