Top-Notch Executives Are Made With Strategic Thinking

This month, Ted Garrison discusses the importance of encouraging all employees to think strategically to provide both short- and long-term company benefits.

By Ted Garrison

Do you have nightmares about where your future top executives will come from? Despite the construction industry’s shortage of qualified managers and the subsequently even more critical shortage of high-performing senior executives, there is a solution. However, unless your company takes immediate action, that nightmare may become a reality.

Has your company ever promoted a high-performing project manager to a senior executive position, only to see that individual fail to live up to expectations? From my conversations with industry executives, this appears to be a bigger problem than one would think. A primary reason for this result is the requirements and skills necessary to be a good project manager are different than those of an effective senior executive.

This causes two problems. First, project managers don’t develop the necessary executive skills. Secondly, performing their normal work doesn’t offer senior executives the ability to evaluate their strategic thinking capabilities.

Consider this sports analogy. Would you select a great shortstop to be your new catcher? After all, shortstops are typically great athletes and therefore should be able to perform the necessary athletic requirements. The problem is the catcher’s job goes beyond pure athletic ability, because he needs to be able to handle pitchers and to set up batters. These are skills that most shortstops don’t have to develop, so no matter how good their athletic skills they may not do a great job as a catcher. Trying to move a project manager into an executive position can be a similar problem.

Numerous CEOs report their ability to manage a company significantly improved when they mastered strategic planning or more accurately, strategic thinking. That’s because strategic thinking provides the ability to think long-term while still maximizing short-term performance. This presents a unique challenge for the construction industry, because of the industry’s short-term project focus. This emphasis tends to train project managers to think short-term.

The solution is to create a process that develops these strategic thinking skills for all of a company’s employees. A short-term benefit will be improved project performance, because when project managers learn to look ahead, they become more effective at minimizing risk and increasing performance.

A long-term benefit is the opportunity to develop the strategic thinking skills of the company’s future senior executives – before they are thrown into a critical position. In addition, current senior executives will have an opportunity to evaluate their subordinates’ strategic thinking ability.

This shift in mentality is critical because strategic thinking skills can be learned like any other skill. While not everyone can master the skills to a level necessary to be a CEO, any improvement in strategic thinking will improve the company’s performance.

Also important to remember is the fact that with the critical shortage of qualified senior executives, there will be a battle for those individuals. Therefore, it’s essential that companies identify their future leaders and build a wall around them to protect them from corporate raiders.

The U.S. Department of Labor estimates that the loss of a manager can cost a company anywhere from 1.5 to 3 times that individual’s annual salary. However, if you lose your potential chief of operations or future CEO, the impact could be devastating – especially if a qualified individual ultimately can’t be found.

Also, if the industry wants to attract high-performing young people, then it must address their values. The Y generation wants to be involved in developing the company’s direction and to make sure their efforts deliver value. Therefore, it makes sense to involve them in the strategic planning process.

Today’s young workers are inclined to move from company to company unless they develop a special loyalty with a company. In short, unless your company involves these young workers, you will lose them. However, the good news is the short-term benefit of merely slowing down the employee churn will pay significant benefits.

Potentially, the easiest way to develop your company’s strategic thinking capabilities is to involve everyone in the strategic planning process. In addition to developing these capabilities, the diversity of the opinions and advice will be a valuable tool in improving the company on two critical fronts: dealing with clients and employees.

In my next article on this topic, I’ll address the process of engaging everyone in the strategic planning process.

Ted Garrison is the author of Strategic Planning for Contractors and host of Internet radio program, New Construction Strategies.com. He can be reached at Ted@TedGarrison.com