Consultant Michael Watkins noticed in his work that many of his clients are going through major professional tribulations amidst the geopolitical and technological upheavals of recent years.
From this experience, the author of the bestseller Os primeiros 90 dias (The First 90 Days) developed what he calls a guide for future leadership, the ideas of which are gathered in The Six Disciplines of Strategic Thinking (Objetiva; 168 pages), now launched in Brazil.
Professor at IMD, where he teaches leadership and organizational transformation, Watkins told Brazil Journal that the main factor keeping executives awake at night today is the speed of technological transformation – particularly the impact of artificial intelligence.
“Strategic thinking is recognizing emerging challenges and opportunities, defining the right priorities, and mobilizing your organization to take action,” said the consultant.
He believes the six essential skills of strategic thinking are:
– pattern recognition;;
– system analysis;;
– mental agility;;
– structure and problem solving;;
– vision;;
– political savvy.
In this interview, Watkins discusses the impact that AI is already having on business management and comments on challenges for leadership – such as the friction caused by the return to in-person work.
What are the main causes of anxiety among business leaders today? Why are they having restless nights?
The impacts of climate change are one reason, as well as disruptions in production and supply chains caused by tensions with China and other conflicts, such as the wars in Ukraine and the Middle East.
However, I think what worries people the most is technology – especially artificial intelligence.
AI is advancing at such an extraordinary speed that it’s hard to anticipate how far it will go.
How do you, as a business leader, deal with the reality that many of the capabilities anchoring your company will be largely impacted by AI?
We haven’t reached the point of true general artificial intelligence, but we’re seeing the emergence of specialized superintelligence systems.
Andy Jassy, the CEO of Amazon, wrote a letter to employees criticizing the bureaucracy in internal processes. Middle management is a category particularly threatened by AI?
We’re already seeing the replacement of tasks once done by people. AI can generate digital marketing content, help create a strategic plan.
We may see AI systems taking over functions of some people, which obviously could have huge implications for middle management. We won’t need people to lead the people doing these things.
I see a gradual process, perhaps starting more with the replacement of tasks and then at the lower-level jobs, but then that will automatically be felt at the next level.
Executive level will be protected to a certain extent.
I’m impressed with what you can do with these systems in terms of setting a strategy for your organization, creating a plan.
Will there be anything left for people to do? Will we need organizations? How will the economy work?
Just a few months ago, people were saying, ‘Oh, generative AI is just hype, blah, blah, blah.’
Now we see other people saying, ‘Well, then you’ll make all this investment in AI and it will never pay off.’
That’s true, to a certain extent. There was a gold rush, with $1 trillion invested in AI. Of course, it won’t be worth it for everyone. It’s a gold rush.
Some people will get very rich, and many people will lose money. That doesn’t mean anything.
The speed at which technology is advancing is what matters – and the progressive replacement of human capability.
You say that anyone can develop strategic thinking capabilities, but many leaders are natural talents. Is it possible to train these skills?
When people ask me if great strategic thinkers are born ready or made, I always say that they actually possess a combination of many human capacities, and they need to be trained.
If you want to be a great marathon runner, you’d better have the right lungs, the right structure, and the right muscle tissues, but you also need to train hard to get there.
Many leaders hear from superiors at some point in their careers that they need to become strategic thinkers.
This kind of comment is sometimes well-intentioned, but sometimes it’s code for indicating that you won’t be promoted. It depends.
Strategic thinking, for me, is recognizing emerging challenges and opportunities, defining the right priorities, and mobilizing your organization to take action.
Some people are more flexible than others. Some people have a higher IQ – intelligence quotient – than others. Some people have a higher EQ – emotional quotient – than others.
The point is that there are exercises that can be done to develop strategic thinking. So, I tried to disaggregate the main subcomponents and came up with the six disciplines that I analyzed in the book.
Could you give examples?
A first example is pattern recognition – the ability to see what is important in a very complex and noisy environment. Great strategic thinkers observe the world around them and identify the most relevant things.
Another example is the ability to analyze systems. They are mental models of how the world works.
The best strategic thinkers I know are really good at moving between high-level and detail, from cloud to ground – and they’re also good at thinking about the past, present, and future.
Some people are surprised that I included political savvy as a discipline of strategic thinking. It’s the ability to navigate these complex political environments.
What is political savvy about?
I originally have a degree in engineering. Then I was trained as a decision theorist focusing on negotiation. When I did my PhD at Harvard, and then my first faculty appointment, I taught negotiation and diplomacy at the Kennedy School of Government.
So, thinking in political terms, thinking in diplomatic terms was part of what I did.
The leaders I work with, who are great strategic thinkers, the best of them, are masters at navigating the political environments they operate in.
I cite the example of Eugene Woods, CEO of Atrium Health. He closed five or six deals in the last four years that no one thought could be done due to all the regulatory challenges and the many board members involved.
The return to in-person work has been a point of friction between managers and their teams. This seems like a considerable challenge for leadership. What is your assessment of remote work?
It’s a big challenge at the moment, no doubt.
You mentioned Amazon, which basically said that everyone will work in the office every day. I think that’s crazy. They’ll lose a lot of good people doing that. Many good people.
We can be as productive in hybrid work as in the office all the time, maybe even more so. And certainly people’s level of engagement, satisfaction with their work increases significantly if they have more flexibility.
I don’t understand Amazon’s logic in doing that.
That said, working purely virtually is very difficult.
My consultancy is 100% virtual, except we meet once or twice a year. But if we were a creative company, I don’t think it would work.
The way to approach the issue is to know what we can actually only do well when we’re together, in a team.
What’s the right balance? Is it two days a week? Is it three days a week?
Just setting days of the week to be together doesn’t translate into good results. It’s what you do when you’re together that matters.
If you’re committed to bringing these people together, you should think about the kind of work that will make them do when they’re together.
If you’re in a highly creative sector, you’ll need more time together as a team. I think if you’re in a highly operational organization, you probably need less time in-person work.
What do you do when you’re together to maximize the value of actually being together? The answer isn’t sitting in your offices or cubicles taking calls by Zoom. That’s a nightmare.
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Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
