The three essential executive competencies are strategy, planning and organization building. Weakness in any of these can cause organizations to fail for avoidable reasons.
Figure 1 illustrates the three executive competencies and their intersections. Since executives are usually measured by the output of their organization, executive competencies and organizational competencies are used interchangeably.
I will first describe the three essential competencies, how to develop them and common hazards associated with the sole competency. Next, I will describe two-competency executives: architect, operator and force of will, as well as their common hazards. Finally, I will recommend the most effective way to assess an executive with the goal of improving their effectiveness.
Strategy is the synthesis of internal and external information to create a vision for the business. Good strategy generates a viable product or service that is preferred by customers over alternatives.
- Envision a superior product or service
- Improve or expands customer offerings
- Lower the cost to deliver the products or services over time
- Integrate current information about the company capabilities and differentiation
- Integrate information about the environment and trends
- Distinguish between the perception and reality of incoming information
- Change deliberately and only with new insight coming into the organization
- Align with, or are adjacent to, the existing strengths of the organization
Developing Strategy Competency
Developing strategy competency is the most difficult because it requires deep customer understanding and deep working knowledge of the business. The best approach is to start with a foundation of operations, study the material in depth and apply the principles to several successful and unsuccessful examples. A mentor, a peer group or both are also helpful.
Recommended strategy refrences:
- “7 Powers,” 2016, Hamilton Helmer
- “Better, Simpler Strategy,” 2021, Felix Oberholzer-Gee
- “Good Strategy/Bad Strategy,” 2017, Richard Rumelt
- “Crossing the Chasm,” 2006, by Geoffrey A. Moore
- “The Innovator's Dilemma,” 2011, Clayton M. Christensen
- “Only the Paranoid Survive,” 1999, Andrew S. Grove
- “The Acquired Podcast,” Ben Gilbert and David Rosenthal
The risk of having strategy without planning is overlooking real-world limits, leading to strategies that can't be achieved with available resources. The risk of having strategy without organization is creating a feasible strategy but struggling to carry it out.
Hazards of an organization with good strategy but poor planning and organization capability may be:
- Goals set for the organization are primarily tops down and not seen as achievable by the responsible team
- Resources necessary to execute to the strategy, such as budget, facilities, or intellectual property, are not recognized or available
- The strategy changes more often than the organization can adapt; and change management therefore consumes a majority of the resources, resulting in less than expected value
- Hiring practices, talent development or succession planning are poor
To mitigate these hazards, a strategist should develop planning and organization building skills, or at a minimum develop delegation level competency and recruit team members with the needed abilities.
Planning is the translation of a desired outcome into a series of tasks for a set of resources. Good planning integrates as much context as necessary to deliver the desired outcome without unnecessary cost, time or complexity.
Good plans include:
- Stakeholder management
- Goals and objectives
- Risks and mitigations
- Prioritization against competing objectives
- Task dependencies, both internal and external
- Work breakdown structures
- Critical path analysis
- Timeline forecasts
- Budget forecasts, including people, expenses and equipment
- Process for monitoring, managing and directing the plan
- Process for continuously improving the planning competency
Developing Planning Competency
To develop planning competency, it is best to take on a planning role with a coach or mentor. Planning requires about two years of managing projects well and another two years of coaching others to fully develop.
Recommended planning references:
- “A Guide to the Project Management Body of Knowledge, 7th Ed,” Project Management Institute
- “Project Planning, Scheduling, and Control, 5th Ed,” James Lewis
- “Harvard Business Review Project Management Handbook,” 2021, Antonio Nieto-Rodriguez
- “HBR Guide to Managing Strategic Initiatives,” 2020, Harvard Business Review
- “The Art of Action: 10th Anniversary Edition,” 2022 Stephen Bungay
Planning without strategy risks executing a clear plan that consumes resources but does not accomplish meaningful results for the business. Planning without organization building risks ad-hoc organization design which leads to poor scaling, high overhead, or both.
Hazards of an organization with strong planning competency but week strategy and organization competency present as the confusing combination of successfully achieving goals while:
- Products or services are not well received by the customer
- Products or services are not keeping pace with industry advancement
- The cost of achieving goals is higher than historical or higher than industry norms
- Organizational focus is on short term financial results that sacrifice long term competitiveness
- Hiring practices, talent development or succession planning are poor
To mitigate these hazards, a planner should develop strategy and organization building skills, or at a minimum develop delegation level competency and recruit team members with the needed abilities.
Organization Building is creating groups of people working together while maximizing productivity and minimizing overhead. This competency is less important for small organizations when the cost of being unstructured is low. However, as organizations grow and the leadership team begins to scale it becomes more important. Good organizations maximize productivity, minimize overhead and sustain themselves over time.
- Achieve goals with the right amount of oversight for the level of the organization
- Create a lasting culture focused on both the outcomes and the methods of work and interaction
- Deliberately align individual and organizational incentives to the company goals
- Clearly identify organizational interfaces: inputs, work processes and deliverables
- Develop or source necessary talent in sync with organizational need
- Stay up to date with best practice or advance the best practice frontier
- Enable necessary specialization aligned to the company goals while avoiding siloing
Developing Organization Building Competency
Most executives have some exposure to building and sustaining an organization by the time they get to the executive level, though in some cases they may not.. First time leaders or founders of small organizations often discover organization building after their organization begins to scale.
The best way to develop this competency is through practicing with a mentor or coach, learning from a peer group and studying best practice. Rapidly growing environments like startups or new divisions offer more opportunities to practice than slower growing ones.
Recommended organization building references:
- “High Output Management,” 1995, Andrew S. Grove
- “Scaling People,” 2023, Claire Hughes Johnson
- “The Manager's Path,1st Ed,” Camille Fournier
- “The Leadership Pipeline,” 2011, R. Charan, S. Drotter, J.L. Noel
Organization Builder Hazards
The risk of having an organization builder competency without strategy and planning competencies is building organizations that do not support the company’s vision, execution of its plans or both.
Hazards of an organization with a strong organization but poor strategy and planning capability are:
- The organization mission is separate from the company mission
- Bottoms up goals are independent of company strategy or plans
- Absence of customer or product focus
- Inability to achieve assigned goals
To mitigate these hazards, an organization builder should develop strategy and planning skills, or at a minimum develop delegation level competency and recruit team members with the needed abilities.
Architects excel at envisioning an exciting future and aligning organizations with this vision. Their weakness is depth in creating and executing plans.
Architect hazards stem from a lack of planning competency:
- Middle management disillusioned by top-down goals that are hard to translate into reality
- Overlooked requirements emerge at the end of projects when they are costly or impossible to fix
- Goals reach beyond the organization's capacity, resulting in incomplete work that fails to serve the customer or business
- Strategies change more quickly than the organization can adapt resulting in excessive change management costs
To mitigate these hazards, an architect should develop planning skills, or at a minimum develop delegation level competency and recruit team members with the needed abilities.
Force of Will
The force of will excels at imagining a compelling product or service and marshaling resources to create it. Their weakness is depth in creating organizations.
Force of Will Hazards
Many small companies or small teams inside of larger companies can be successfully led by a force of will. The lack of organization building tends to present when scaling up the organization or when the leader moves out of the organization.
Force of will hazards:
- Prioritizing results over team cohesion, leading to excessive turnover
- Centralized decision making for minor decisions in a large organization, slowing progress
- Neglecting internal executive talent development, leading to no clear successor
- Excessive hiring of external candidates for senior roles, resulting in silos, steep learning curves and high washout
- Difficulty framing and achieving goals after the leader leaves the organization
To mitigate these hazards, a force of will should develop organization building skills, or at a minimum develop delegation level competency and recruit team members with the needed abilities.
The strength of the operator is curating and marshaling resources at scale to get things done. Their weakness is the lack of strategy.
The primary operator weakness risk, due to the lack of strategy, leads to deploying resources in ways that don't align with the company's long-term interests. This misalignment is deceptive because goals, performance, and organizational health appear healthy, yet lead to long term decline in company competitiveness.
- Over emphasis on short-term operating metrics at the expense of long-term viability
- Disruption or commoditization due to lack of productive innovation
- Poor return on research and development
To mitigate these hazards, an operator should develop planning skills, or at a minimum develop delegation level competency and recruit team members with the needed abilities.
The recommended development process for all competences is to assess the executive and either develop the missing skills, or develop at least delegation level competency for all weaknesses. Delegation here means assigning tasks to others while still overseeing, influencing, and being accountable for the outcomes.
Delegation level competency is the ability to:
- Deeply appreciate and advocate for the value of the skills
- Recognize weaknesses
- Make specific recommendations to address weakness
- Define, monitor, and measure meaningful goals for the competency
- Judge the competency in others and their suitability for delegation
Delegation is not to be confused with abdication, the act of assigning responsibilities to others without maintaining accountability for the outcome. Abdication is dangerous for executives as it leads to a loss of control over outcomes, the measure of their performance
Weaknesses are often blind spots that require a change in perspective to be seen clearly. The most effective way to gain this new viewpoint is through a 360 assessment conducted by a trusted external party that holds discovered weaknesses confidential. I stress 'assessment' because the goal is to enhance performance, unlike a review or evaluation, which aims to judge.
Appreciating the difference is important because employees often avoid what they see as optional judgment that carries risks and thereby miss out on opportunities for personal growth. For this reason I also recommend against internal 360 assessments because the perceived risk of judgment reduces the value of the process.
In addition to 360 feedback, working with a mentor and studying the strengths and weaknesses of other executives and organizations are also helpful ways to gain new perspectives.
Special thanks to Johanna Kleingeld, Judy Heyboer and James Gross for reading and commenting on drafts of this essay.