Business literature is rife with terms and expressions that at face value make sense, but upon further scrutiny become quite unclear. Strategic thinking is one such term. So, what is it? How do you apply it?
First, let’s agree that “strategy” is about making choices on where an organization will use its resources such as time, money and people in order to achieve a particular outcome. For the private sector this means to generate profits for its shareholders while in the public sector the aim is about serving the public good – benefitting all citizens. While there is no generally accepted definition of strategic thinking, for our purpose, we will define it as the ability to understand an organization’s current position within a business environment and imagine how it could be repositioned in a desirable future, always with an eye towards achieving greater returns.
How do you train yourself to thinking strategically?
It starts with an understanding of your business context.
Understanding the business context requires an analysis on three levels: the external and internal context as well as an ability to “look into the future”.
- External focus. Questions like: What is going on around us? Who are our competitors, what are their strengths? What technological, economical political, social, and regulatory and bylaw trends are impacting us? What opportunities exist in the marketplace? These questions establish a better understanding of the external business environment in which an organization evolves.
- Internal focus. Looking inside the organization requires courage: leaders must be prepared to see things they may not like. Denial is a common reaction. Difficult questions include: What do we excel at? What do we not excel at? How does our organization’s culture (the behaviours and practices of the individuals within the organization) support our business? How does culture act as a barrier? What competencies are missing? This introspection can be quite revealing and at times depressing. Taking stock of the positive side and appreciating successes and triumphs is needed to get a balanced view.
- Thinking about the future. Imagining what the future could be, is an important step in strategic thinking. A step that is unfortunately not well utilised. Building future “scenarios” enhances leaders strategic thinking that can potentially provide insights and identify new and unseen opportunities. The discipline of foresighting draws upon questions like: What is driving change in our business context? How might these changes interact and create radically different circumstances? What signals might alert us to important and disruptive changes? What are the possible futures for our industry and for our organization? Drawing from these questions, leaders can develop “scenarios” useful in advancing their strategic thinking that can subsequently be included in future plans.
The context helps to redefine the business and shape a compelling vision
Understanding the business context provides an analysis that will serve as a starting point to define a mission that describes what the organization stands for, and a vision of the future that the organization is hoping to create. For example, the mission of the Lifesaving Society is to promote safe and enjoyable behaviours in and around water, while the vision is for a “drowning-free Canada”. Useful missions are elevator pitch-style statements: they describe the organization in a sentence or two – the type that can be delivered during short elevator ride. The creation of mission and vision statements should not be taken lightly: they are essential ingredients that will guide subsequent strategic thinking steps.
The vision determines the direction
With an analysis completed, a mission and vision defined, leaders need to continue thinking strategically and focus on “getting there”: how to achieve the vision? Relevant questions include: How do our products and services need to evolve? What products or services must we develop, abandon or modify? What results are important? What targets should we set for next year? The year after next? What new competencies and capabilities do we need to develop? These are only a key questions exploring the means to achieve the vision. The answers to these questions must be documented in clear, concise language that can serve as a multi-year, strategic plan that is measured and reviewed regularly.
Avoid the strategic thinking trap: focus on getting the entire organization “on board”
It is a mistake is to assume that this strategic thinking will be immediately understood and implemented throughout the organization. Leaders need to start considering how to introduce the change brought on by their strategic thinking to successfully implement the resulting strategy. I will leave it to my Intersol Group colleagues to further expand on the topic of change management in the coming weeks.
Alain Rabeau, Senior Consultant, The Intersol Group