Successful Leaders Employ Strategic Intelligence

By Michael Maccoby

Research Technology Management; Volume 44. No. 3. May-June, 2001. pp . 58-60.

The more the success of organizations depends on people working together and sharing a common purpose, the more would-be leaders have focussed on the human side. One result has been a confusing flood of books and articles offering formulas for effective leadership.

Among the most popular is the idea that effective leaders have something called emotional intelligence. This includes qualities or competencies such as empathy and sensitivity to people’s feelings. If they want to criticize someone, managers with emotional intelligence do it privately. They are self-aware and able to control their impatience or anger so they don’t short circuit conversation. While it is obvious that managers with these qualities can improve teamwork, some of the most successful technology leaders score very low on emotional intelligence.

Steve Jobs publicly dresses down subordinates. Bill Gates often puts an end to conversations saying “That’s the stupidest thing I’ve ever heard.” A number of the successful leaders I’ve worked with have been insensitive to and unaware of the feelings they provoke with their outbursts. Undoubtedly the people they work with would be happier if these leaders developed their emotional intelligence. But the reason they’ve done so well without it is that what they do have in abundance is a different kind of intelligence which has not been described by psychologists. I call it strategic intelligence.

Based on my experience with successful leaders, I’ve observed five interrelated elements or competencies that make up strategic intelligence. These are foresight, systems thinking, visioning, motivating and partnering. Some leaders score well on different elements; a few notable leaders like Gates, Andy Grove and Jack Welch seem to score highly on all of them.

Foresight

The first competency is foresight, the ability to think in terms of forces that are not obvious and can’t be measured but are shaping the future. In business, it means sensing a coming wave so you can ride it. While a bunch of Bell Labs managers decided thirty years ago that telecom customers were perfectly happy with analog, a few entrepreneurs had the foresight that digital would be the dominating technology. Lucent got into trouble not for lack of emotional intelligence, but because the people at the top didn’t foresee the demand for optical - networking gear for superfast OC-192 systems to carry long-distance voice and data traffic.

Many managers use scenarios as a process that substitutes for strategic intelligence. But scenarios can only describe alternative future events. They are only as useful as the foresight of those who use them.

Systems Thinking

The second competency, systems thinking, requires the ability to synthesize or integrate elements rather than breaking them into parts for the purpose of analysis. Synthesizers are able to understand how elements interact, how they fit together to make a whole or system. Larry Ellison, CEO of Oracle, comments that there are huge costs for companies that buy different softwar components for their various functions (e.g. sales, marketing, accounting) and then need consulting companies to glue them all together. His highly successful strategy has been to develop software systems. Each part may not be the best in the world, but they fit together. This is what I’m trying to do in describing strategic intelligence. Rather than making a list of traits with no apparent relation to each other, my goal is to show how these competencies fit together and equip an individual to lead people in new directions.

Russell Ackoff tells us that a system is a whole that is defined by its function(s) in one or more larger systems, and which contains two or more essential parts with different functions, and which satisfy three conditions:

  • Each essential part can effect the behavior or properties of the whole.

  • The way each essential part effects the whole depends on the behavior or properties of at least one other part.

  • All possible subgroups of the essential parts have the same properties as the parts that compose the subgroups.

Thus, a system is a whole whose properties and behavior derive from the way the parts interact, not how they act when taken separately. So when a system is taken apart in the process of analysis, it and its parts lose their essential properties. When analyzers try to solve problems in one part of a system they miss the strategic understanding of the whole system.

Ackoff differentiates three types of systems: mechanical, organic and social. A mechanical system like a car can be designed so that the parts and their interactions serve the system’s purpose: transportation. In an organic system like the human body, the parts are genetically designed to interact and serve the purposes of the system. However, the human parts of a social system have purposes of their own. Therefore, leadership must be able to motivate them to serve the purpose of the system. We return to this competency below.

Visioning

Visioning means using foresight and systems thinking to design an ideal. Visioning is not only a matter of riding a wave to the future, but also directing its course. Some technical people are good at envisioning mechanical systems but not social systems. The latter are more complex. They are much harder to control, because you can’t design-in the behavior of individuals. Some visionary CEOs have foundered because they failed to understand how people would behave within the system they have created. This seems to be the case of Jürgen Schrempp, the embattled CEO of DaimlerChrysler. Despite disappointing financial results, he maintains that his vision is fine; he blames his subordinates for not implementing it.

In contrast, a CEO with developed visioning ability, like Jack Welch of GE, focuses not only on the business vision but also how a complex social system can be directed to a common purpose, such as being number one or two within a market. System thinkers simplify, clarify and communicate well, because they focus on the essentials.

Complexity theory suggests that complex self-organizing systems functioning at the edge of chaos are adaptive and successful only when all members internalize the same operating principles. When a decision is demanded, people don’t need to be told what to do— they act according to the principles. These might call for bringing people together from all relevant disciplines to solve a product problem, or, as is the case with GE, making sure that every process produces Six Sigma quality products.

Motivating

Motivating is the ability to get people to embrace common purpose, to implement a vision. This involves a kind of listening, to learn what moves people. But this listening is not necessarily done with empathy. In fact, empathy can conflict with making tough decisions that hurt individuals but benefit the organization.

Leaders who motivate are able to communicate in a way that inspires people. There is often an aesthetic element to their visions. They not only communicate information, but also a sense of meaning that inspires people to follow, even to sacrifice in terms of hard work, long hours and deferred rewards.

Think of Steve Jobs offering young programmers the chance to be part of a team creating something that is “insanely great.” Or Bill Gates leading a mission to change the world and build a business engine while holding out stock options which promise financial independence. These leaders have the same kind of strategic intelligence as the Cathedral builders of the middle ages or military conquerors like Alexander the Great.

Partnering

The fifth competency, partnering, is the ability to make strategic alliances. While someone with emotional intelligence tends to be competent in developing friendships, one with strategic intelligence develops allies. Richard Hatch, the eventual winner of Survivor, the TV show, scored poorly on knowledge about the other participants, but he succeeded in creating alliances by observing what the other contestants wanted and offering incentives to fit their interests.

Leaders with high levels of strategic intelligence may also recognize that they need to partner with managers who have the emotional intelligence they lack. Partnering with other companies can also strengthen strategy. Andy Grove of Intel, a leader with a superabundance of strategic intelligence, was able to dominate the microprocessor market by partnering with Microsoft and PC producers like Compaq and Dell. Inside Intel, he has partnered with Craig Barrett who is now CEO.

What You Can Do

Can strategic intelligence by learned or developed? To a certain degree, qualities of foresight, systems thinking, visioning, motivating and partnering seem inborn just like musical ability and spatial relations. However, with all these kinds of intelligence, if you are born with the potential, you can develop it further. A great architect is likely gifted with spatial relations and visioning capabilities, but these qualities must be developed by using them and giving them a context, for example learning about materials and structural engineering. So must a would-be strategic leader of technology learn about products, processes, business models and social systems.

It is much harder for people who are analyzers not synthesizers, who focus on the present rather than the future to develop strategic intelligence. The first step is for them to become aware that strategic intelligence exists and why it is important for leadership.

There are books that show strategic intelligence in action, like Andy Grove’s Only the Paranoid Survive and Clay Christensen’s The Innovator’s Dilemma. There are exercises to develop systems thinking, as in Peter Senge’s The Fifth Discipline. And there are workshops in systems thinking and visioning such as those I have helped Russell Ackoff lead for the senior management of Canadian Pacific.

Strategic intelligence is, of course, part of the personality system and is affected by other aspects of intelligence and personality. For example, a person with foresight but without emotional intelligence is vulnerable to paranoia because he lacks a sense of other people’s intentions and may imagine the worst.

Narcissistic leaders with strategic intelligence have large visions, but success tends to feed their grandiosity and like Napoleon invading Russia, they are likely to go too far. In contrast the obsessive’s conservatism and strong conscience may limit the expression of strategic intelligence. Obsessives are more comfortable as analyzers and list makers than as visionaries.

Some emotional intelligence, particularly self knowledge and self-control makes any leader stronger, but the most developed emotional intelligence serves physicians, psychologists, social workers and facilitators more than it does leaders in technology companies. Of course, even the best strategic thinkers can fail. Unforseen forces can negate foresight. Competitors can wipe out advantage. Although the ideal leader to follow might be a strategist with a heart that listens, I prefer a leader who scores high on all five elements of strategic intelligence to one who is guided mainly by empathy. However, I’d want to be sure that such a leader is setting goals that I believe in and that I can fit my purposes to those of the leader.



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