Sparrow, P R and Hodgkinson, G P (2007) The key elements of strategic competence. Working Paper. Centre for Performance-Led Human Resources, Lancaster University.
Abstract
In today's organisations senior managers have to cope with strategic environments characterised by high levels of uncertainty, volumes of information, and shifting business models. As a consequence, their individual strategic expertise may not be sufficient to help the organisation chart its way through this environment. Many talk about the need for organisational agility in this environment. One problem facing organisations in this kind of environment is how best to recruit and select senior managers for this world and how to develop the organisation's competence to manage accordingly. Drawing on a range of theoretical and empirical insights from strategic management and the cognitive and organisational sciences, we argue that strategic competence constitutes the ability of organisations and the individuals who operate within them to work within their cognitive limitations in such a way that they are able to maintain an appropriate level of responsiveness to the contingencies confronting them. Using the language of the resource based view of the firm, we argue that this meta-level competence represents a confluence of individual and organisational characteristics, suitably configured to enable the detection of those weak signals indicative of the need for change and to act accordingly, thereby minimising the dangers of cognitive bias and cognitive inertia. In an era of unprecedented informational burdens and instability, we argue that this competence is central to the longer-term survival and well being of the organisation. We conclude with a consideration of the major scientific challenges that lie ahead, if the ideas contained within this paper are to be validated.