Why is Strategic Thinking Important - now more than ever

For years, “strategic thinking” has been reserved for executive team meetings or board rooms as part of a firm’s strategic planning process. However, the highly dynamic environments we operate in today mean that the assumptions and agreements that form the basis of strategic plans can shift dramatically between these highly structured planning processes.

Strategic thinking capabilities should be relied upon frequently and informally to maintain and possibly accelerate performance against long-range goals, just as the captain of a large sailing vessel depends on the crew to assess and act given the changing forces and challenges that arise on their journey. So too should any leadership team be able to depend on their managers to explore, evaluate and decide how to make changes and still keep the firm on course to achieve its long-range goals.

Questions that may require strategic thinking?

• Is this an innovation we need to respond to now, or can we wait until our next long-range planning discussion and add it to a more extensive set of upgrades?
• Should we replace the person who just left with the same skills or discuss whether we will need new competencies/different skills over the next two years?
• I have the authority to make this decision, but are there others who may be impacted by it that I should consider before proceeding?
• Should we spend time enhancing our core offering (product set or services) next year, or should we consider other priorities?

What is Strategic Thinking?

Strategic thinking is the practice of orienting decisions with the end in mind and working backward to ensure action aligns with the ultimate goal. It is a discipline of evaluating alternatives and adapting decision-making to the ultimate goal rather than relying on a more limited and incremental problem-solving approach. 

Strategic thinking is used to develop a strategic plan, and those who build the strategic plan should be prepared to guide implementation and make tactical decisions to stay on course.  However, only a tiny fraction of managers within an organization participate in the strategic planning discussion.  The need for strategic thinking capabilities increases when managers driving operations have limited engagement with the leaders who authored the strategic plan or if the strategic plan has not been updated recently and seems less relevant to the current challenges these managers are facing.

A Strategic Direction: the Prerequisite for Strategic Thinking

Leadership must first have established the core thinking that is the foundation of their future direction before attempting to build strategic thinking capabilities.  When organizations are small, this knowledge is created organically by working on the business alongside managers and team members; as organizations grow and create management hierarchies, this informal sharing of perspective does not happen. At this time, a more formal strategic planning effort is required to produce a clear story of progress toward a shared future destination.

When strategic thinkers lack the context they need, they manufacture it, leading to factions or divergent plans that can destabilize an organization or drain its productivity.  

See if you have the strategic direction needed to build strategic thinking capabilities:

• Do you have a clear, shared articulation of what you are ultimately striving to achieve?
• Does everyone understand how you will measure success (on the whole, not as a department or individual)?
• Is it widely understood how you will deliver on your mission over the long term?

Read More …4 Ways to Foster Strategic Thinking