What is Strategic Thinking?
Strategic thinking is simply an intentional and rational thought process that focuses on the analysis of critical factors and variables that will influence the long-term success of a business, a team, or an individual.
Strategic thinking includes careful and deliberate anticipation of threats and vulnerabilities to guard against and opportunities to pursue. Ultimately strategic thinking and analysis lead to a clear set of goals, plans, and new ideas required to survive and thrive in a competitive, changing environment. This sort of thinking must account for economic realities, market forces, and available resources.
Strategic thinking requires research, analytical thinking, innovation, problem-solving skills, communication and leadership skills, and decisiveness.
Why is Strategic Thinking Important?
The competitive landscape can change quickly for any organization. New trends may emerge quickly and require you to take advantage of them or fall behind. By incorporating everyday strategic thinking into your work and life routines, you will become more skilled at anticipating, forecasting, and capitalizing on opportunities.
On an individual level, thinking strategically allows you to make a greater contribution in your role, become more essential to your organization, and prove that you’re ready to control greater resources.
What is Strategic Thinking in Business?
During an organization’s annual strategic planning process, leaders often compile, analyze, and synthesize external and internal data and ideas to develop its strategic intent and build a strategic narrative. This document will guide the company into the future for a defined period of time. Leaders then choose and plan specific actions that will accomplish these strategic initiatives.
Businesses also need to schedule a time for strategic thinking and reviews throughout the year. Leadership teams should periodically examine their strategic initiatives to ensure execution is taking place, review, and sustain the effort across the organization.
What is Strategic Thinking in Leadership?
Business leaders and stakeholders use strategic thinking and analysis to decide what product mix they’ll offer, what competitive landscape to compete in (or not compete in), and how limited resources will be allocated such as time, employees, and capital. They must decide how to best structure enroll others to achieve important objectives and to avoid putting resources at unnecessary risk of loss.
What are the Components of Strategic Thinking?
If you’re working on your company’s strategy, you’ll need to engage in analysis, problem-solving, decision making, and leading through change.
As you create a strategic direction or plan, you’ll analyze:
- Business opportunities and vulnerabilities
- Feasible of each idea or risk
- The costs associated with each move you are considering
- The likelihood that various tactics will be effective
- Methods of aligning objectives with the overall plan
- The effects of competitors, suppliers, customers, and new substitutes might have on your strategic plans
As you discover obstacles during the planning process, you’ll problem-solve by:
- Gathering relevant information about the problem
- Clearly defining the problem from a strategic point of view
- Brainstorming possible solutions
- Imagining further challenges and how to overcome them
- Delegating assignments of various parts of this strategy to key associates
Strategic thinking requires agility and decisiveness in choosing a plan and sticking with it. However, you have to be aware of new, more promising opportunities. It is a balancing act between consistency and flexibility. You and your team will:
- Make sure decisions are well-informed by thorough research
- Choose objectives and accompanying metrics
- Prioritize objectives
- Follow a standard decision-making process
- Build consensus, when necessary
During strategic planning, you will need to communicate ideas to your staff and gather feedback from them. You’ll then utilize effective channels to communicate a compelling vision of the completed plan to all employees and keep them focused on their contribution to the plan.
How to Improve Strategic Thinking Skills
There are five steps to improving your strategic thinking skills:
1) Set aside time to reflect and plan for the future, identify trends, prioritize tasks, and determine where to allocate resources
2) Uncover your own biases so you can think more clearly about strategy
3) Listen to subject matter experts and opinion leaders in your organization to obtain higher quality information you can use in your strategic thinking
4) Learn to ask good questions to uncover better options and plans—questions such as “Is this idea from a credible source?” and “Is this idea logical?”
5) Explore all the consequences of different strategies and directions
Get more details by reading CMOE’s article, “5 Ways To Improve Your Strategic Thinking Skills Today.”
Books on Strategic Thinking
To develop strategic thinking on your own, consider studying the following books:
Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life: This strategy classic came out in 1991. It’s a great introduction to practical ideas for using good strategic plans to outmaneuver your competition.
Ahead of the Curve: CMOE’s research-based books and publications can help employees at all levels develop better strategic thinking skills and perform more like a leader.
How to Teach Strategic Thinking
Attending a quality workshop is a quick way to improve your strategic thinking skills or to help your employees develop them through strategic thinking exercises. Rather than simply discussing skills, the goal of instruction should be to help you immediately apply strategic thinking to your unique job role.
Strategic thinking is taught best when a workshop is led by experienced facilitators. They should give you feedback as you develop a plan that you can take back to your job and implement right away. Strategic thinking training will help you see how you can improve your organization.
The workshop should:
- Identify learning goals and desired outcomes
- Include pre-reading material of both classic and contemporary articles on strategy
- An opportunity to review, discuss, and clarify best practices, frameworks, and actionable tools and concepts.
- Simulations or learning labs that allow people to practice strategic thinking skills immediately
- Debrief and review simulation or learning lab results and highlights strategic success factors that work. Mistakes and failures are important to learn from and provide insights and discoveries.
- An accurate assessment of your unique mix of existing strategic thinking skills and areas where gaps exist.
- Support and provide guidance in creating a customized and strategic plan that you can immediately apply to your work.
As with any skill, you’ll improve at strategic thinking the more you practice it and the more experience you gain. It’s definitely worth the time and effort; importantly, strategic thinking distinguishes mediocre businesses and workers from those that excel.