Strategic Thinking is a comprehensive planning model that covers innovation, strategic planning and operational planning. It is a process that applies vision development, strategic planning and operational planning to develop business strategies that have a greater chance for success. Strategic Thinking defines the manner in which people think about, assess, view, and create the future for themselves and others.
More and more organizations are learning that past experience is not always the best basis for developing future strategies. Leaders need to thoughtfully consider how to create value for their customers. The exercise of strategic planning, while important, tends to answer the “what” and “when” of business planning and rarely captures the essence of how to think strategically to successfully execute. It is always done at the senior executive level. That’s where strategic thinking comes in. Strategic thinking is the “how” and “why” of the planning process. It answers the question, “What should we be doing, how we should be doing it and why?” It is departmentally focused and aligns with the organizational strategic plan.
Strategic Thinking requires research to examine the voice of the customer, the employee and industry best practices. The research phase is a process of examining everything we do in our various roles, understanding the needs of our customers and ensuring that all of this is linked to clearly defined strategic imperatives.
If we compare strategic thinking with strategic planning and operational planning we see that:
- is the “What and “When” …very high level.
- is the “What, How and “Why”…what should we be doing, how we should be doing it and why.
- the specific details of the how to successfully execute it.
Strategic Thinking Provides Insight into New Opportunities & Growth
Strategic Thinking evaluates our business strengths and weaknesses and looks for new and better ways to improve. At its heart, it is able to anticipate major shifts in the competitive marketplace and identify emerging opportunities. As well, it uses innovation to move us outside of our comfort zone and towards opportunities for new products and services that will give us a competitive edge. This approach is vital for growth, higher profitability and greater returns for investors and owners.
Most companies struggle with productivity and how to deal with limited resources of money, people and time. Strategic Thinking focuses the management team on markets that are most likely to succeed and so helps organizations avoid waste and costly mistakes.
One of the most difficult challenges that CEOs face today is the rapid change occurring in the world. Strategic Thinking is a proactive methodology that incorporates a conscious mindset of preparing for change and having plans in place to deal with it. This gives companies the opportunity to take advantage of opportunities and avoid damage from unforeseen risks that may lead to negative consequences.
Strategic Thinking provides a way of seeing things through the eyes of the customer. In so doing, business leaders gain insight that they may have missed before. They become more adept at formulating strategies to reach potential prospects and are able to make more logical, confident decisions for their business.
The Centre for Strategic Management offers a useful explanation of the strategic thinking approach. It focuses on relationships, multiple outcomes, holism and boundaries, the environment, the larger system and feedback. It asks five key questions:
- Where do we want to be?
- Our ends, outcomes, purpose, goals, holistic vision
- How will we know when we get there?
- The customer’s needs and wants connected into a quantifiable feedback system.
- Where are we now?
- Today’s issues and problems
- How do we get there?
- Closes the gap for c to a in a complete, holistic way
- Ongoing: What will/may change in our environment in the future?
The work in this phase is usually done before the strategic thinking team works together. The key research elements are to identify and understand the Voice of the Customer, identify the extent to which employees are engaged within the organization culture and to benchmark internally and externally to identify best practices.
Voice of the Customer
Strategic thinking is driven by both organizational and customer requirements. The departmental strategies must address the organizational and customer needs. The strategic thinking process ensures these two are aligned.
Customer satisfaction measurement is an integral part of the strategic thinking process as organizations use customer satisfaction survey results to drive improvement initiatives. Customer satisfaction levels are impossible to assess unless customer’s expectations, priorities, and needs have been determined. This is done through voice of the customer.
One of the challenges faced by senior leaders when developing their strategic plan is how to turn their vision into reality. To transform an organization into the one they envision takes more than great strategy and implementation, it also requires that strategy become an integral part of the very fibre of the organization. This is where strategic alignment fits in. Aligning everyone in the organization with the strategy is one of the most important things the leadership team can do beyond formalizing and implementing their strategies. Alignment makes it much easier for the leadership team to push the organization in the direction they intend. Without good alignment trying to more forward becomes a struggle.
Benchmarking is the process of continuously comparing and measuring an organization against public and private sector leaders anywhere within and outside themselves in order to gain information that will help them take action to improve their performance. The data collected through benchmarking helps the strategic thinking team to create strategies and objectives that ensure the organization meets its defined benchmark goals.
The work in this phase is usually done as an off-site. Although this can be accomplished in 2 days, it is preferable to put aside 3 days for the full strategic thinking planning. The team will start by reviewing the results of the strategic thinking research phase.
The first element in the strategy phase is to create a vision. This is an ambitious view of the future that everyone in the organization or department can believe in, one that can realistically be achieved yet offers a future that is better in important ways than what now exists. When the vision is clearly articulated, everyday decisions and actions throughout the department will respond to current problems and challenges in ways that move the department toward the future, rather than maintain the status quo.
Innovation is a critical part of creating the vision. Through innovation the team explores different scenarios and possibilities. It takes them on a journey into new territory and provides them with creative tools and techniques to explore all the possible future opportunities.
The strategies close the gap between the present and the “ideal future” as defined in the vision. Essentially, the strategies translate the strategic vision into key strategies and objectives. The strategies answer the question “what” you will do over the next one to two years to work towards realizing the strategic vision.
Risk must be a part of developing strategies. An analysis of what might prevent the team from reaching these strategies will help ensure all roadblocks are surfaced and removed. This analysis will include an identification of the risks together with contingencies to overcome them.
The operational plan identifies the actions required to ensure the short-term strategy objectives are successfully realized. Strategies often fail at this stage owing to a lack of detail and too much assumption that people will know what the steps involved are. No plan ever failed because it had too much detail.
Each strategy/objective is different in its timeframe. Some are completed in a matter of weeks or months. Others are longer-term. A lessons-learned meeting should be held when the strategy/objective has been completed. If it is a longer-term strategy, interim milestones should be considered. This will identify any concerns, issues, and/or challenges as well as the successes to manage through the remainder of the operational plan.
Strategic Thinking is an exciting and effective tool that organizations can apply as a whole and for each department or division. Its goal is to out-think, out-plan and out-maneuver other forces or competitors. The notion of combat implies a central premise of competition in the pursuit of "fulfillment."
Leaders who embrace Strategic Thinking gain a broader and more innovative way of thinking and a longer-term oriented and systematic view of their business. This ultimately leads to more innovative and effective business strategies and profitable business growth.
Michael Stanleigh, CMC, CSP, CSM is the CEO of Business Improvement Architects. He works with executives and senior managers around the world to improve organizational performance by helping to define their strategic direction, increase leadership performance, create cultures that drive innovation and improve project and quality management. He has been instrumental in helping his clients increase productivity and profits with his innovative approaches and focus on quality.
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