Strategic thinking is a critical competency for leaders in today's complex and rapidly changing business environment. It encompasses the ability to anticipate future trends, assess competitive landscapes, and formulate innovative strategies to achieve long-term organizational goals. This article explores the concept of strategic thinking, its significance in driving business success, and practical strategies for cultivating strategic thinking skills in any business context.
You will see similar attributes between strategic leadership and visionary leadership (Week 1: Visionary Leadership, thedavarkgroup.substack.com). This is because many of the skills in visionary leadership enable or inform the strategic process. Leaders need to build their vision and translate it, so it is something that supporters can understand and execute. Strategic planning falls into this realm, which is the written or visualized thoughts of the strategic leader. Most of all, strategic leadership provides the organization with decentralized and committed personnel to carry out that vision or plan. Today we want to develop specific skills that build strategic leaders.
Sources for this Article:
Bass, A.E. & Milosevic, I. (2017). Away from the Top: Exploring Strategic Leadership in an Emergent Strategic Initiative Process. University of Nebraska at Omaha, Academy of Management.
Saad, M.A. (2020). The relationship between strategic leadership and intellectual capital management: Evidence from the faculty members at the Northern Border University. Department of Public Administration, Northern Border University, Arar, Saudi Arabia.
Tharp, J. (2007). Align project management with organizational strategy. Paper presented at PMI® Global Congress 2007—EMEA, Budapest, Hungary. Newtown Square, PA: Project Management Institute.
Grant, R. M. (2019). Contemporary Strategy Analysis: Text and Cases Edition. John Wiley & Sons.
Understanding Strategic Thinking.
Tharp (2007) discusses what are some insights on strategy:
Having a differentiator for your business and the path your business needs to take.
Your strategy must have a sustainable plan. Strategies do not work if you cannot complete it or you lose everything in the process.
A strategy isn’t rock solid but isn’t overly flexible.
A thorough strategy “requires analyzing complex data, and interpreting that data within the larger context of the industry, market, community, etc” (Tharp, J., 2007).
Translating the strategy to your supporters is paramount with implementation and management.
Grant (2019) uses historical examples and provides four main factors for strategic thinking. First, creating consistent goals that focus efforts and generate commitment. Secondly, a strategic leader must know the market environment and their competition. Thirdly, you must know the assets you have to bring to the table and use them to achieve your goals. Lastly, develop a strategic plan that you and the organization can execute and monitor its performance.
Establishing Clear Goals.
Lofty goals require free thinking through a learning organization. Strategic thinkers foster a culture of curiosity and creativity within the organization, encouraging employees to explore new ideas, challenge assumptions, and think outside the box. This is done with the understanding of relevant constraints applied but does not limit thinking to the way it is always done. Leaders should provide opportunities for cross-functional collaboration and brainstorming sessions to generate innovative solutions to complex problems. The more goals you can conceptualize, the more you can outmaneuver your competitors.
The last step is to translate your goals to your audience. I have developed many process maps at the strategic level for multiple formations across the U.S. Army. A key component was using understandable language and definitions to enhance readability. Another component was using flow charts or directional graphics that placed critical tasks in sequential or complementary order so people could conceptualize the plan. With every strategic plan, it was important to discuss the process with supporters, receive feedback, and provide more specific clarity when confusion arose. Developing goals should never be done in a vacuum.
Know the Market.
Strategic thinkers actively monitor external environments for emerging trends, industry shifts, and competitive threats. They gather and analyze relevant data from various sources to inform strategic decision-making, ensuring that their organizations remain agile and responsive to changing market conditions. The strategy must include achieving bargaining power over competitors and suppliers. Also, consider how sensitive or fixed your pricing is to market trends. Drastic shifts in pricing could impact your margins or competitive strategy.
Another important factor in the market that influences your strategy is the market structure. What is the current structure of how a company provides goods or services to its customers? Are there emerging trends in that structure that impede or improve velocity? Is your organization able to break into those structures or alter them for advantage? How does your strategy collect information to stay current on these structures or adapt to changes?
Resource Management.
Strategic thinkers must understand their available assets. In the military, when building a strategy, we consider how many units (people), what function those units accomplish (mission and equipment), and where they are located (cost over time, legal requirements, and effects or capabilities). Each factor influences the calculus needed to solve the problem so that the unit can execute the required task at the right time within the correct effect under the law. This is the essence of knowing yourself and using that knowledge to build a better strategy than your opponent.
Implementation of a Strategic Plan.
Invest in employee development initiatives that enhance critical thinking, problem-solving, and strategic planning skills. Provide access to training programs, workshops, and resources that facilitate the acquisition of strategic thinking competencies, empowering employees to contribute meaningfully to the organization's strategic objectives. Ensure that the training is adequate to effectively provide the skills you need and not just a hand wave, a time waster, that results in a piece of paper. In most cases, strategic thinking groups can help develop solid ideas and also serve as training.
Cultivate a mindset of agility and adaptability, encouraging employees to embrace change as an opportunity for growth and innovation. Remember, you can learn from all types, people, and cultures whether that is positive or negative aspects, even your competitor. The key is to create structures and processes that facilitate experimentation, iteration, and learning from failure, enabling the organization to pivot quickly in response to evolving market dynamics. As part of that structure, create routine reporting driven by performance indicators so leaders and supporters can evaluate whether the plan is on track, meeting expectations, or succeeding versus failing.
As a leader, demonstrate strategic thinking behaviors in your own decision-making and communication processes. Lead by example, articulating a compelling vision for the future, and aligning strategic initiatives with organizational goals. Encourage open dialogue and collaboration from your supporters, empowering employees to contribute their insights and perspectives to strategic discussions. Use those reports discussed above, showing that they are worth the effort to produce, to make decisions on the effectiveness of the strategy. Be cognizant of opportunities to mentor through confusing strategies, use them for benefit, and not tear a supporter down.
Implement strategic plans with the correct division of labor to ensure that the right team is executing the right task at the right time. This includes developing a proper hierarchy and the rules that affect each level so the proper function can exist within the plan. This is also where you can develop the motivations, incentives, and complementary support to engineer success. With your analysis of capabilities under resource management, you can ensure this is done correctly over the time the plan requires it.
All of these factors utilized correctly by a strategic thinker, will generate success for your organization. It will also create better work environments. Saad's (2020) study found a statistical significance in “The more attention is paid to the dimensions of strategic leadership, the stronger the management of intellectual capital.” When you place more effort into building strategic thinking, it strengthens your organization’s people, structures, and relationships. This will reward your efforts with adaptive solution-solving, better interpersonal communication, and more efficient organization structuring.
This is why it is important to build strategic thinking skills. It is also important to have a proper “balanced scorecard” for your organization (Tharp, J., 2007). These elements of strategic thinking will allow your business to dominate in its industry, and your leaders and supporters will thrive. If you want to learn about these tips and support our work for more of these insights, subscribe now and continue reading.