Strategic leadership is the work senior people do to set an organisation's long-term direction and align people, money and systems behind it. It covers big decisions, stakeholder engagement, culture and change. Research highlights six core skills: anticipate, challenge, interpret, decide, align and learn.
What is strategic leadership?
Strategic leadership is the work of deciding where an organisation should go over the long term and then getting people, money and systems pointed in that direction. It sits above day to day management. A manager asks "are we doing things right?" A strategic leader asks "are we doing the right things, and will they still be right in five years?"
Academics have argued about the definition for decades. The most useful recent synthesis is a 2020 review in The Leadership Quarterly by Samimi, Cortes, Anderson and Herrmann. They pulled together research on chief executives, top teams and boards and defined strategic leadership as the functions performed by people at the top of an organisation that are intended to have strategic consequences for the firm. In plain English: it is not a personality type, it is a set of jobs that senior people do, and those jobs shape the whole organisation.
That idea builds on upper echelons theory (Hambrick and Mason, 1984), which argued that an organisation becomes a reflection of its top managers. Their experience, values and blind spots show up in the strategy, the culture and ultimately the results. If you want the full plain-English definition with its components, see my separate page What is strategic leadership?
The eight functions strategic leaders perform
Samimi and colleagues grouped what strategic leaders actually do into eight functions. I find this list far more practical than the usual "be visionary" advice, because you can check each one against your own diary.
- Making strategic decisions, such as which markets to enter, what to buy or sell, and what to stop doing.
- Engaging with external stakeholders, including investors, regulators, customers and partners.
- Human resource management, especially choosing the senior team and succession.
- Motivating and influencing people to commit to the direction.
- Managing information, deciding what the organisation pays attention to.
- Overseeing operations and administration, making sure strategy actually gets executed.
- Managing social and ethical issues, from sustainability to conduct.
- Managing conflicting demands, such as short-term profit versus long-term investment.
Why does strategic leadership matter?
Every organisation eventually faces a moment when doing more of the same stops working. Customers change, technology shifts, a competitor arrives with a cheaper model. Strategy textbooks call the slow version of this strategic drift: the business keeps improving what it already does while the world moves away from it. Strategic leadership is the antidote.
It matters for three practical reasons:
- It decides where resources go. Budgets, people and management attention are limited. Someone has to choose, and choosing badly is expensive.
- It shapes culture. What leaders reward, tolerate and talk about becomes "how things are done here", which is why the cultural web is such a useful diagnostic.
- It creates resilience. Organisations led strategically tend to see shocks earlier and respond faster, because someone was already watching the horizon.
In my experience coaching SBL students, the ones who struggle most with strategy questions are not short of models. They are short of the habit of stepping back and asking what really matters for this organisation. That habit is the core of strategic leadership.
What are the six skills of strategic leadership?
The best-known practical framework comes from Paul Schoemaker, Steve Krupp and Samantha Howland, who published Strategic Leadership: The Essential Skills in Harvard Business Review in 2013. Their research, drawn from work at Wharton and their consultancy, covered more than 20,000 executives. They found that strong strategic leaders do six things well.
| Skill | What it means | What it looks like in practice |
|---|---|---|
| Anticipate | Spot threats and opportunities before they are obvious | Talking to customers, suppliers and people outside your industry; scanning with tools like PESTEL |
| Challenge | Question the status quo and your own assumptions | Asking "what would have to be true?"; inviting dissent; running pre-mortems |
| Interpret | Make sense of messy, conflicting information | Looking for patterns; testing several explanations before settling on one |
| Decide | Make tough calls with incomplete information | Setting decision criteria; weighing trade-offs; deciding on time rather than waiting for certainty |
| Align | Get stakeholders to support the direction | Mapping stakeholders (see Mendelow's matrix); explaining the why; addressing conflict early |
| Learn | Treat outcomes as feedback and adapt | After-action reviews; sharing failures as well as wins; changing course when evidence says so |
The point of the framework is that these skills work as a loop. Learning from the last decision improves how you anticipate the next change. I go into each skill in depth, with a self-test you can score yourself on, in strategic leadership skills.
What does a strategic leader actually do?
Strip away the jargon and a strategic leader spends their time on a small number of high-leverage activities:
- Setting direction. Agreeing a clear purpose, a small number of priorities and what the organisation will not do. The strategic planning process gives this a structure.
- Making portfolio choices. Deciding which products, markets and businesses to grow, fix or exit. Tools such as the Ansoff matrix and BCG matrix help structure the debate.
- Building the top team. Hiring, developing and sometimes removing the people who will deliver the strategy.
- Shaping culture and values. Role modelling the behaviour they expect, especially under pressure.
- Balancing stakeholders. Shareholders, staff, customers, regulators and communities rarely want the same thing.
- Leading change. Turning a decision into new structures, systems and habits, for example using Kotter's 8 steps.
For a detailed look at the person behind these activities, including ten characteristics and a self-check, read what makes a strategic leader.
What are the main strategic leadership styles?
There is no single "strategic leadership style". Strategic leaders draw on different styles depending on the situation. The most common ones are:
| Style | Core idea | Best used when |
|---|---|---|
| Visionary | Paints a compelling picture of the future | The organisation needs a new direction |
| Transformational | Inspires people to go beyond self-interest | Deep change in culture or business model |
| Transactional | Clear targets, rewards and controls | Execution and stability matter most |
| Participative | Involves people in decisions | Expert teams; buy-in is critical |
| Adaptive | Helps people tackle problems with no known answer | Uncertain, fast-changing environments |
| Directive | Takes control and decides quickly | Crisis or turnaround |
Daniel Goleman's research, published in HBR as Leadership That Gets Results, found that leaders who could switch between several styles got better results than those who relied on one. I compare eight styles, with a when-to-use table, in strategic leadership styles. For the broader picture of leadership styles beyond strategy, see types of leadership.
What are good examples of strategic leadership?
Real cases make the theory click. Three short examples:
- Satya Nadella, Microsoft. Appointed chief executive in February 2014, Nadella told staff the company had to thrive in a "mobile and cloud-first world" (Fortune) and made renewing the culture his top priority. Microsoft's market value went from roughly $300 billion when he took over to more than $1 trillion (Business Insider).
- Ørsted (formerly DONG Energy). Around 2008 to 2009 the Danish utility generated about 85% of its heat and power from coal. Leadership set a vision to flip that to 85% renewables. By 2019 the renewable share had reached 86%, and Ørsted had become the world's largest offshore wind producer (McKinsey).
- Alan Mulally, Ford. On arriving in 2006 he raised about $23.5 billion by mortgaging nearly all of Ford's assets, simplified the business under a "One Ford" plan, and Ford avoided the government bailouts that GM and Chrysler needed in 2008 to 2009 (NBC News).
Each shows the same pattern: reading the environment early, making a hard choice, and then aligning the organisation behind it. I break down twelve cases, including Indra Nooyi at PepsiCo, Lou Gerstner at IBM and Dave Lewis at Tesco, in strategic leadership examples.
How is strategic leadership different from operational leadership?
Both matter, and most leaders need both. The difference is the time horizon and the question being answered.
| Strategic leadership | Operational leadership | |
|---|---|---|
| Main question | Where should we go and why? | How do we deliver efficiently today? |
| Time horizon | 3 to 10 years | Days to 12 months |
| Focus | Direction, positioning, capabilities | Processes, targets, quality |
| Typical tools | PESTEL, scenarios, portfolio analysis | KPIs, budgets, project plans |
| Success measure | Long-term value and resilience | Efficiency and reliability |
A useful way to think about it comes from Ronald Heifetz and Donald Laurie's HBR article The Work of Leadership: operational work mostly solves technical problems with known answers, while strategic work deals with adaptive challenges where people have to change how they think. There is a fuller comparison with examples in strategic vs operational leadership, and the related difference between leaders and managers is covered in leadership vs management.
How can you develop strategic leadership?
Strategic leadership is learned, mostly on the job. A widely quoted rule of thumb from the Center for Creative Leadership's research is that leaders learn roughly 70% from challenging assignments, 20% from other people and 10% from courses. The evidence behind the exact split is thin, but the direction of travel is right: you develop by doing stretching work and reflecting on it.
Practical steps that work:
- Ask for cross-functional exposure. Join a strategy project, a business case, or a board paper outside your normal area.
- Build a scanning habit. Spend an hour a week reading outside your industry and noting implications.
- Practise decision writing. Before big decisions, write down options, criteria and what would change your mind. Review the note later.
- Learn the core models. PESTEL, Porter's five forces, value chain, suitability, acceptability, feasibility. They give structure to your thinking.
- Consider a formal route. In the UK, the CMI Level 7 Strategic Management and Leadership Practice qualifications are aimed at senior managers, and the ACCA Strategic Business Leader exam tests leadership, governance and strategy together.
A full 90-day plan with exercises and course comparisons is in strategic leadership development. If you learn best from books, I have curated a list of the best strategic leadership books.
What models do strategic leaders use?
Models are not the job, but they stop you missing things. These are the ones I see used most often in real boardrooms and strategy days:
| Stage | Model | What it helps with |
|---|---|---|
| Understand the environment | PESTEL, Porter's five forces | Spotting external trends and competitive pressure |
| Understand yourself | Value chain, VRIO | Finding real sources of advantage |
| Bring it together | SWOT, TOWS | Turning analysis into options |
| Choose | Ansoff, generic strategies, SAF | Comparing and selecting strategies |
| Align and execute | McKinsey 7S, balanced scorecard | Making sure structure, systems and measures support the plan |
| Lead change | Lewin, Kotter | Moving people from the old way to the new |
The full library is in my strategy models hub. If you want to see how these fit into the wider discipline, read strategic management and strategic thinking.
What does strategic leadership look like at different levels?
Most writing on this topic assumes you are a chief executive. Most readers are not. The good news is that strategic leadership scales: the questions stay the same, but the scope changes.
| Level | Strategic question | Example of strategic leadership |
|---|---|---|
| Board and CEO | What business are we in, and where will we win? | Exiting a declining market and reinvesting in a growth area |
| Divisional or functional head | How does my area create advantage for the whole organisation? | Redesigning finance from reporting the past to supporting decisions |
| Middle manager | What will my team need to be good at in two to three years? | Building data skills in the team before the new system arrives |
| Team leader | What should we stop, start and continue? | Dropping a low-value report to free time for customer work |
At every level, the test is the same. Are you making choices about the future, or only reacting to the present? Middle managers in particular play a strategic role that is easy to underrate: they translate the top team's intent into practical priorities and send early warning signals back up. Organisations where that two-way flow works tend to adapt faster.
How do governance and ethics fit into strategic leadership?
Strategic leaders do not operate alone. In most organisations they answer to a board, which sets the risk appetite, approves major decisions and holds executives to account. The tension between owners and managers is the subject of agency theory, and it is one of the five research streams that Samimi and colleagues identified in the strategic leadership literature.
Two practical implications follow. First, strategic leaders need to understand governance well enough to work with the board rather than around it: clear papers, honest risk reporting and no surprises. Second, ethics is not a separate topic. Decisions about where to cut costs, how to treat suppliers or what to tell investors are strategic decisions with ethical consequences. Tools such as enterprise risk management and a clear view of business ethics help leaders see those consequences before they become headlines.
What are the common mistakes in strategic leadership?
- Confusing a plan with a strategy. A list of projects is not a strategy. A strategy makes choices, including what not to do. My page on what strategy is explains the difference.
- Staying in the weeds. Leaders promoted for operational excellence often keep fixing operational problems. It feels productive, but nobody is watching the horizon.
- Deciding alone. Strategy that the top team does not own will not survive the first setback. Alignment is a skill, not an afterthought.
- Ignoring governance and ethics. Strategic leaders answer to boards, regulators and society. Skipping this is how good strategies become scandals.
- Never reviewing. Without deliberate learning, the same mistakes repeat. Build reviews into the calendar.
How does my book help with strategic leadership?
Becoming A Strategic Business Leader is a concise guide to the core strategy, governance and leadership models, originally written for the ACCA SBL exam and useful for any manager. Its 19 chapters follow the journey a strategic leader takes: strategic planning, strategic analysis, performance analysis, strategic choice and strategic development (chapters 1 to 5), then governance, stakeholders, leadership and the board (chapters 6 to 9), through to risk, ethics, organisational structure, technology, project management, financial decision making and managing change (chapters 10 to 19).
The leadership chapter (chapter 8) covers the leadership theories most often tested and used, and chapter 19 covers managing change. You can read the first three chapters free, which cover strategic planning, strategic analysis and performance analysis.
Bottom line
Strategic leadership is the set of jobs senior people do that shape an organisation's long-term direction: making big choices, engaging stakeholders, building the team, shaping culture and leading change. The six skills (anticipate, challenge, interpret, decide, align and learn) give you a practical way to assess and grow your own ability. Start by protecting time to think about the future, learn the core strategy models, and treat every major decision as a chance to learn. Use the guides linked above to go deeper on each part.
FAQs
What is strategic leadership in simple terms?
Strategic leadership means deciding where an organisation should be in the future and getting everyone moving in that direction. It is about long-term choices, such as which markets to compete in and what to stop doing, rather than running today's operations. Strategic leaders also shape culture, manage stakeholders and lead change so that the strategy actually happens rather than staying on paper.
What are the 6 skills of strategic leadership?
The six skills identified by Schoemaker, Krupp and Howland in Harvard Business Review (2013) are anticipate, challenge, interpret, decide, align and learn. Strategic leaders spot change early, question assumptions, make sense of mixed signals, make tough calls, bring stakeholders on board and learn from results. The skills work as a loop, so learning improves future anticipation.
Is strategic leadership only for CEOs?
No. Research focuses on chief executives, top teams and boards because their choices have the biggest effect, but the same skills apply at any level. A team leader who anticipates changes in customer demand, challenges old habits and aligns colleagues behind a new approach is showing strategic leadership within their own area of responsibility.
What is the difference between strategic leadership and strategic management?
Strategic management is the process of analysing, choosing and implementing strategy, using tools like PESTEL, SWOT and the balanced scorecard. Strategic leadership is the human side: the judgement, influence and courage needed to make those choices and get people to commit. In practice, good strategic leaders use strategic management tools, but the tools alone do not create direction.
Can strategic leadership be learned?
Yes. Most strategic leaders develop through stretching assignments, exposure to senior decisions and deliberate reflection, supported by reading and formal study. Practical habits such as scanning outside your industry, writing down decisions and reviewing them later, and learning the core strategy models build the skill steadily over time.
What is an example of strategic leadership?
Satya Nadella at Microsoft is a widely cited example. After becoming CEO in 2014 he refocused the company on cloud computing and made culture change his top priority. Microsoft's market value rose from about $300 billion to over $1 trillion. Ørsted's shift from mostly coal to mostly renewable energy is another strong example.
Sources
- Samimi, Cortes, Anderson and Herrmann (2020), What is strategic leadership? Developing a framework for future research, The Leadership Quarterly
- Schoemaker, Krupp and Howland (2013), Strategic Leadership: The Essential Skills, Harvard Business Review
- Hambrick and Mason (1984), Upper Echelons: The Organization as a Reflection of Its Top Managers, Academy of Management Review
- Goleman (2000), Leadership That Gets Results, Harvard Business Review
- Heifetz and Laurie (1997), The Work of Leadership, Harvard Business Review (HBR Classic reprint)
- Fortune (2014), Microsoft names Satya Nadella CEO
- Business Insider, How Satya Nadella used a growth mindset to overhaul Microsoft's culture
- McKinsey (2020), Ørsted's renewable-energy transformation
- NBC News, How Ford got back on the fast track to success
- ATD, 70-20-10: Where Is the Evidence?
- CMI, Level 7 Strategic Management and Leadership Practice qualifications
- ACCA, Strategic Business Leader (SBL) essentials on one page