Strategic Leadership for the 21st Century

Abstract

The twenty-first century was predicted to bring a highly challenging competitive landscape and it materialized in the first decade of the new century. Scholars and practitioners alike argued that managers would have to develop and use unique capabilities to be successful strategic leaders in this challenging competitive landscape. For example, it was predicted that they would need to develop and communicate an effective vision for the organization. They would need to build and continuously develop dynamic core capabilities and also to develop and effectively use highly capable human capital. They would need to emphasize innovation, build effective organizational cultures and engage in ethical practices. Analysis of the leadership exhibited by many managers in the first decade of the twenty-first century, suggests that there was a major failure of strategic leadership. Of course, that decade was one of significant turbulence and change, with the terrorist attacks that occurred in September 2001 and two major economic downturns. However, many argue that at least the second downturn was the result of poor strategic leadership in many sectors of the economy, especially in the financial services industry. There was a significant amount of hubris and greed exhibited by many strategic leaders. Undoubtedly, the global economy has changed in major and irrevocable ways with large emerging economy countries becoming major actors on the worldwide stage. Furthermore, new economic growth is largely spurred by innovation and especially entrepreneurial behavior in the creation of new businesses. Strategic leaders will have to manage their resources wisely and effectively, build human and social capital and clearly act in ethical ways. Effective strategic leaders have to operate under conditions of sometimes extreme uncertainty and view volatile environments as providing the potential to identify and exploit entrepreneurial opportunities in these contexts. Without highly effective strategic leaders, organizations of all types are likely doomed to failure. However, those with the most effective strategic leaders will be much more successful in the competitive landscape of the twenty-first century.