According to Wilson (1996), strategic leadership incorporates the fundamentals of strategic planning with the tactics used in strategic management. The purpose of strategic leadership is to align business practices—including human resources management—with company goals, values, mission, and ethics. Leadership sets the tone for the entire organization. The strategic leader makes sure that all departments and their managers are on the same page, so that even when they perform totally different operations and their services are not fully integrated, that all are working in alignment with primary objectives. Those objectives can be related to capital budgeting and financial constraints, but they may also be linked to other elements of strategy including marketing, branding, or corporate social responsibility. The “five compass model” proposed by Wilson (1996) is based on the motif of the gyrocompass, which remains stable and oriented in the same strategic directions at all times (p. 27). According to Wilson (1996), strategic leadership is complex and warrants not just one but five different compasses.

Wilson’s (1996) five compasses include a strategic compass, an action compass, a culture compass, a socio-political compass, and a moral compass. The model can inform best practices in strategic leadership in each of the core domains. For example, strategic leaders can reflect on performance in light of the moral compass to make necessary changes to employee training programs or creating an anonymous reporting system to reduce the fear of retaliation for reporting ethical infractions. Likewise, the strategic leader can use the culture compass to guide managers towards the creation of a culture that is supportive and which also drives innovation and engagement. All actions taken by the strategic leader can be evaluated and assessed according to their respective compasses. Segregating the roles of the strategic leader in this way shows how the role encompasses many different but interrelated domains of guiding the company forward to meet its goals.

References

Wilson, I.H. (1996). The 5 compasses of strategic leadership. Strategy & Leadership 24(4): 26-31.