What is Strategic Thinking?
I got an interesting question from a client last week as I was writing about Strategic Planning or I prefer to call it – Strategic Thinking. An executive asked me “What is Strategic Thinking?” At first I thought this was a trick question with a hidden agenda, yet after a couple of questions, I realized it was a genuine question from a person who I assumed should know the answer ( errant assumptions are still the root cause of all poor decisions.).
Most executive teams will openly discuss growth and market share, yet, seldom do they really get down to the specifics of what is the best route to take the organization into the future. There is some discussion about the organizational structure of the company and who reports to whom. Yet, is that really strategic thinking? Yet, I find that most executives are following the path created by market momentum, which is directly related to the health of the economy. Therefore, this is more status quo than Strategic Thinking.
Okay, so here is the answer to the question – What is Strategic Thinking? …
Strategic Thinking is the link to the development of strategy and the creation of a strategic future profile. This requires thinking about the current profile and then expanding to what the profile should be if everything the executive team desired were a reality. The executive management team must have a clear understanding of what the organization looks like in the future before they can make decisions on how and what are the best routes or paths to take to achieve this future reality.
There are a couple of elements that you must be comfortable with for Strategic Thinking to work properly. These include the following elements…
Strategic Thinking is a Process
Strategic Thinking is a process that can be best described as the type of thinking attempting to determine what an organization should look like. This includes objectively looking at different models or profiles during the process. Most Strategic Planning systems are only looking at how to get there which takes on more of an operational scope.
Strategic Thinking is a Fresh Approach
Yes, strategic thinking is a fresh approach to the subject and technique of strategy. When done properly it will uncover key factors dictating the direction and how management must set up objectives and talent to achieve the future model. This process must involve the key executives directly to gain their commitment and buy-in to execute the plans and decisions necessary for the strategy to succeed.
By using a fresh approach, the executives can be forced out of their comfort zones and the mechanical systems used in the past to plan the organization’s future. This form of thinking delivers the best opportunities and thoughts about the what is happening in the business today, what is happening in the economic environment they operate in, and most importantly how to position the organization relative to the views of highly qualitative variables rather than only quantitative reports and data.
Strategic Thinking is a Framework
Successful strategic thinking creates a framework which assists the executive team and management to produce a complete profile of what the organization wants to become in the future. This leads an additional framework for decision making regarding the vital choices that can separate the organization from competitors – former and future. This framework includes assisting in the selection of which products to pursue or not to have, which markets to enter or steer clear of, and to identify the ideal customers and who are not to be offered in the market.
The framework created by the strategic profiles developed during the process allow for management to understand the importance of positioning – products, services, and the organization – to not only survive in the changing economic environments but to dominate their market as a leader. Becoming the market leader in the market, product, category, industry, region, country or territory is the key for excellent performance and results. It is the key indicator of overall success.
Strategic Thinking is the Difference Maker
Finally, Strategic Thinking is the difference maker between planned growth and only growth by momentum. It is the combination of the conscious and systematic analysis of the many variables that shape the executives’ conclusions and decisions about the future of the organization. It is very important to identify all these variables and then create an effective forum for open and objective discussion of the variables and their respective impact upon the organization. During these discussions many potential obstacles or critical issues will be raised and recorded, this allows for proactive contingency planning of different scenarios that could be encountered in the future.