Foresight competence and the strategic thinking of strategy-level leaders

Foresight competence and the strategic thinking of strategy-level leaders

Leadership of organisations are currently faced by what are termed 'post normal' times. This is marked by complexity, flux and contradictions in all aspects of the operating environments within which the organisations function. Prior research notes that the lack of strategic thinking capabilities is regarded as the greatest challenge facing organisational leaders in the manufacturing sector of Australia. Further research regards this challenge to extend beyond the manufacturing sector in Australia but is likely a global challenge. Building organisational leadership capacity, especially in terms of strategy, requires new ways of thinking that have been identified in the literature as consisting of five elements of strategic thinking. In addition, the concept of foresight is a desirable organisational core-competence yet remains largely misunderstood and empirically under-studied. The concepts of foresight competence, foresight styles, decision styles, orientation to time and strategic thinking are further closely associated to competitive advantage and sustainability. Understanding how these concepts are related to each other and to effective organisational strategy-making, and what demographic characteristics of strategy-level leaders are positively associated with them, is regarded as critically important. Given these gaps in the literature the research problem investigated in this study is: How and to what extent are foresight competence and the strategic thinking of strategy-level leaders associated within the context of organisational strategy-making?

This research problem has not been empirically investigated in any depth and there has been a dearth of prior research related to the concepts of foresight competence and strategic thinking. This study has integrated influential related studies in a transdisciplinary approach and the conceptual framework of the study aligns the constructs and measures in order to address the following research issues:

RI 1: Is foresight competence positively associated with the strategic thinking of strategy-level leaders?
RI2: How do the demographic characteristics of strategy-level leaders influence the relationship between their foresight competence and strategic thinking?
RI 3: Is the strategic thinking of a strategy-level leader positively associated with the organisation’s strategy-making mode?

In order to address the research issues a quantitative two-step methodology was adopted. First, the pilot study included input from a panel of experts which together with a pilot survey helped to build on and refine the conceptual framework and data collection instruments respectively. Second, a web-based survey methodology measuring foresight styles, orientation to time, decision styles and strategy making was used to collect primary data. The sample consisted of strategy level leaders from Australian and South African organisations. The data was analysed utilising multivariate data analysis techniques including exploratory factor analysis, confirmatory factor analysis, multiple regression analysis and structural equation modelling. Hypotheses at both the lower- and higher-order factorial level were tested including hypotheses related to the effect of interaction terms.

The results confirmed that foresight competence and strategic thinking in strategy-level leaders are distinctive constructs and these constructs are positively related. Foresight competence was found to precede strategic thinking in the strategy process. The
interaction terms of age, level of education, exposure to futures or foresight education and industry experience were found have an effect on the relationship between the constructs. The analytical aspects of the strategy-level leaders‟ strategic thinking in terms of strategy-making in the organisation were found to be positively related. However, it emerged from the results that the creative aspects of strategic thinking were negatively associated with the strategy-making processes of the organisations as represented by the sample.

The results confirmed that the classical, linear and deliberate approach to strategy is still predominant. It further confirmed that strategic thinking is still largely elusive in the practise of strategy and does represent a challenge to strategy-level leaders. Within the context of ambiguous and dynamic environmental change, and the imperative of sustainable organisational development, the study highlights the concern that strategy is generally practised at the expense of the generative and creative aspects of strategic thinking.

The main contribution of this research was to develop and refine a conceptual framework that illustrated and is the first rigorously tested model of the empirical relationships between the constructs of foresight competence and strategic thinking, and organisational strategy-making processes. The influence of leader demographic characteristics, in terms of the Strategic Leadership theory, contributed to the literature in this regard. It represents and important insight into the confluence between leaders‟ cognitions abilities and the rational strategy-making processes typically employed by organisations.