Four Capabilities of Great Strategic Leaders - Ideas for Leaders
Idea #137

Four Capabilities of Great Strategic Leaders

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Intellectual honesty, accountability, and self-awareness are three of the four key capabilities of strategic leaders – leaders capable of inspiring change, innovation, teamwork and competitive performance in their companies and organizations. The final and fourth key capability of strategic leaders is the ability to attract and develop great people – to be a ‘talent magnet’. Boards searching for CEOs, and CEOs searching for a top executive team must interview candidates and select CEOs with these four capabilities in mind. And once successful CEOs and C-suite leaders who lose any of these capabilities should be removed.


Building on the latest research on leadership, as well as scores of interviews with CEOs and other leaders, Professor of Strategy and Leadership Sydney Finkelstein of Dartmouth’s Tuck School of Business has identified four key capabilities that he argues are essential to strategic leadership.

The first is intellectual honesty, that is, the capability of the leader to adapt to new realities. Strategic leaders are not welded to the strategies, products or processes of the past. They are not afraid to break free of their comfort zone and recognize that times have changed – and that the competitive advantage of “the way we have always done it” or “our best product” is now obsolete. Kodak’s inability to adapt to the digital age is one notorious example of lack of intellectual honesty.

The second characteristic of strategic leaders is accountability, which Finkelstein describes as “the capability of motivating teams to deliver world-class results.” Motivation requires more than accountability, but leaders who prove themselves accountable – who are willing to put on themselves the responsibility for achieving the best results – are those who will motivate others to do likewise. As a result, people in the organization are not working because that is what they are paid to do, but because they care deeply about their jobs and the results they can achieve.

Self-awareness – specifically the ability to understand why we make the decisions we make – is the third key capability of strategic leaders. Everyone is subject to biases that influence how they make decisions and respond to problems; those who are self-aware of who they are will be less likely to fall into the traps generated by these biases. Captain Chesley Sullenberger, who famously landed a passenger jet on the Hudson River, continuously responded to the changing set of circumstances before him without ever thinking of what was theoretically not possible.

Finally, there is the fourth of these key capabilities, which is captured in the phrase talent magnet. Strategic leaders recognize talent, attract talented people to their teams, and develop this talent – thus building not only a leadership pool for their own organizations but, often, forming leaders that go on to become leaders in their own right. Lorne Michaels of Saturday Night Live and Jack Welch of GE are two leaders whose many subordinates have become leaders in their fields.


Citigroup adopted a supermarket model of financial services that no one has been able to successfully implement… including Citigroup. The stubbornness of Citigroup leaders to stick to this model - a clear indication of the lack of intellectual honesty - has been disastrous to the company and even to the financial services industry as a whole. Hiring leaders with the four capabilities of strategic leaders is vital to the success of the organization. Finkelstein offers several guidelines to boards and search committees for ensuring that they hire and keep the best strategic leaders.

First, when hiring a high-level leader:

  • Emphasize behavioural questions in candidate interviews. Candidates for high-level positions will have some kind of a track record and usually a long resume. Behavioural questions, however, can dig below the surface. Such questions include: What major change initiative did you lead and how did you get people to buy into the change? What major plans or goals proved unworkable or failed for some reason and how did you respond?
  • Watch what candidates bring up themselves. Does the candidate initiate a story about an unexpected market situation and how he or she responded? Does he or she bring up setbacks and barriers?
  • Interview a large number of people who have worked with the candidate. They have the perspective to offer a more honest assessment - both positive and negative - of the candidate.

Another danger is the once successful leader who is no longer an effective strategic leader. As people get older and have been in their positions longer, they become complacent or arrogant, losing their intellectual honesty, self-awareness and accountability. Finkelstein warns that boards of directors or business owners must continuously monitor the leaders of their organization to ensure that they still have within them the capabilities required of strategic leaders.



Professor Sydney Finkelstein’s four capabilities concept builds on current research as well as the leadership ideas found in his earlier books, including:

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Idea conceived

April 1, 2013

Idea posted

May 2013
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