Strategic Thinking Elements

Several of my clients, already mid-senior leaders in organizations, bring up the topic of how to improve their strategic thinking capabilities as an area for development in coaching sessions. So, they are not unfamiliar with strategy, strategic planning, or strategy execution!

What makes strategic thinking different from strategic planning and why is it still a common area for development in leaders?

This article is based on Strategic Thinking: Can it be taught? by Jeane M Liedtka – a shorter, simpler summary. Reference to the original paper is provided at the end.

Henry Mintzberg, one of the most famous experts in the field of strategic management differentiates strategic planning and strategic thinking as below:

– Strategic planning is the systematic programming of pre-identified strategies from which an action plan is  developed

– Strategic thinking, on the other hand, is a synthesizing process utilizing intuition and creativity whose outcome is “an integrated perspective of the enterprise.”

Prahalad and Hamel, who describe traditional approaches to planning as “form filling”, while referring to strategic thinking emphasize Mintzberg’s general themes of creativity, exploration, and understanding discontinuities.

For Ralph Stacey, strategic thinking is “. . . using analogies and qualitative similarities to develop creative new ideas . . . (and) designing actions based on new learning.” This differs from strategic planning which focuses on following preprogrammed rules.

In general, then, it can be argued that strategic thinking involves thinking and acting within a certain set of assumptions and potential action alternatives as well as challenging existing assumptions and action alternatives, potentially leading to new and more appropriate ones.

So, strategic thinking includes a lot more creative, intuition, and imagination-based processes, thereby involving the Right-brain a lot more. Whereas strategic planning is a data-driven process of planning activities for execution of a pre-determined strategy, typically a Left-brain driven activity!

Is it then still a mystery, why leaders are good at strategic planning while still need development in the area of strategic thinking?

We are all taught to break down and solve problems but rarely taught to think creatively, outside the bounds of current problems and realities!!

So, what are the elements of strategic thinking, and can leaders learn to get better at it?

Strategic planning is not strategic thinking. Indeed, strategic planning often spoils strategic thinking, causing managers to confuse real vision with the manipulation of numbers: Henry Mintzberg

Key elements of strategic thinking were defined very elegantly by Jeane M Liedtka, in her paper Strategic Thinking: Can it be taught?

Systems Perspective: Taking a whole systems perspective, both internal and external. External systems could involve global, industry level, local, and at times hyper-local elements of the ecosystem the company operates in. Internal systems include employees, policies, processes, and other elements internal to the company.

Intent Focused: Having a clear strategic intent and having that drive focus. Strategic intent helps focus organizational energy, focus attention, to resist distraction, and concentrate for as long as it takes to achieve a goal. It can be hard to maintain this focus, in the dynamically changing world both externally and internally. Intent Focus helps make informed choices while staying focused or modifying the intent itself if circumstances so demand.

Intelligent Opportunism: Within the intent-driven focus, having the flexibility and agility to be opportunistic intelligently. This requires to stay focused on the intent and strategy, yet be open to recognize new opportunities, assess them and respond with an informed choice rather than react.

Thinking in Time: Ability to recognize reality in current time, the intent-driven focus for the future, and the gap between the two, while using the ‘corporate memory’ in the broader context of external history effectively. The ability to hold all 3 perspectives and move between them, tying them together using patterns seen in the past can be a very useful skill in creating a powerful strategy.

Hypothesis Driven: Creating, testing hypotheses to bridge the gap between now and the future! With the information overflow in the world, it should be possible to adopt the ‘scientific approach to creating and testing scenarios and hypotheses yet this is one aspect of strategic thinking is not very commonly used in businesses.

All these skills can be developed with practice, though for highly analytical leaders, the elements that are most difficult include Systems Perspective and being Hypothesis Driven.

– Not focusing on what they see as problem boundaries and expanding their perspective to include other internal and external can be a challenge.

– Creating hypotheses that may not be totally supported by data available currently is another area of challenge

Both require imagination and expanded boundary less thinking, which is the opposite of problem-solving, where all activity happens within the bounds of the problem space. Even strategic planning and management are bounded by the strategy that’s already defined and agreed upon. There may be tweaks to it but at the core, it doesn’t change.

For most successful leaders, who work on well-defined problems, with well-defined expected outcomes, trying to think in a boundary less world can be scary and unfamiliar and hence uncomfortable! Having a trusted sounding board in a coach can be useful – an effective coach can help you see patterns that lead to boundaries one puts on themselves and their thinking! Reach out for a no-strings-attached conversation with us.

Leadership is a potent combination of strategy and character. But if you must be without one, be without the strategy. Norman Schwarzkopf