Strategic Thinking

SUMMARY Strategic thinking is a process in which significant issues and decisions are considered in a special way. Strategic thinking is applicable and useful in a wide range of situations, including developing strategies for a company, making a business or personal decision, or just understanding a situation. Examples could include (a) the CEO of a Fortune 100 company using a strategic management process to establish future strategies for the firm, (b) an R&D director deciding on funding levels for a research project, (c) an individual staff member making decisions about priorities and time to be devoted to various tasks, or (d) a university student deciding what courses to take next semester. Some of the special characteristics of strategic thinking are: 1. 2. 3. 4. 5. 6. 7. 8. 9. Identifying & focusing on important issues Selecting key, relevant information Recognizing systemic properties (linkages, interactions, and patterns) Understanding through: o Distinguishing causes from effects or symptoms o Clarifying (often tacit) underlying assumptions. o Considering the issue or situation in its larger context o Maintaining a long-term view Appreciating implications & consequences Generating alternatives & evaluating objectively (where applicable) Integrating logical, rational thinking with creative, generative, divergent thinking Remaining flexible Acting in the face of emotional discomfort Another way to think about strategic thinking is that it involves a greater than usual degree of: (a) thinking more deeply to distinguish underlying causes and issues from more obvious symptoms; (b) thinking more broadly to recognize systemic linkages, interactions, and patterns; and (c) thinking about long-term as well as short-term implications and consequences A SIMPLE EXAMPLE OF STRATEGIC THINKING Contrast two university students (C and D) with comparable backgrounds, abilities, and situations. Each has decided on a career field and related major and is thinking about the future at the end of the sophomore year. Both recognize the need to work part-time to cover some expenses. Both want to have a reasonable social life, including relationships with members of the opposite sex. Both C and D did some planning for the coming academic year, but there were differences in their thinking. C took a part-time job solely because it paid more than any of the alternatives, and allowed working at least 24 hours/week (which C figured was necessary to balance the expected spending). C picked classes for the fall semester with only cursory consideration of overall requirements for graduation and a brief look at options for the subsequent spring semester; a primary criterion was having classes at times that didn't interfere with the job (and also left convenient open times for recreation and dating). D thought about and made decisions on classes and a job simultaneously. D also considered all of the academic requirements (including prerequisites, when courses were to be offered, and issues about getting into needed courses) for the next four semesters before anticipated graduation, in picking classes to take in the fall semester. D took a part-time job that paid somewhat less than some alternatives, but one in which both the company and the job were relevant to D's chosen career field. D also decided it was feasible, by watching spending, to work only 16 hours/week during the school year. With more flexibility in times for taking classes, D was able to register for everything needed during TTR, while C had to struggle to add two classes after the semester began. There were other differences between C and D in thinking and actions as the next year progressed. For example, D made contact and had discussions with a number of individuals at work, professors, and professionals in D's chosen career field -- and established ongoing relationships with several of these individuals. These discussions and relationships were helpful, not only in providing information and perspectives as D worked, studied, and made choices, but were the beginning of a network D realized would be important in getting that first post- graduation job and subsequent career development. C concentrated mostly on the present and thought of networking as something to be done after graduation... This incomplete example is admittedly simple, but intended to stimulate your thinking about your thinking. Some of the questions you might consider as you examine your thinking are: What issues and events are you choosing to concentrate on and how important are they? How well do you understand the situation, its broader context and interconnections, and the consequences and implications of potential choices? Are you taking a long-term perspective? How skillfully are you using both logical and creative thinking? ADDITIONAL POINTS & DISCUSSION First, what is "strategy?" Among the dictionary definitions is "the science and art of employing the political, economic, psychological, and military forces of a nation to afford the maximum support to adopted policies." The military theorist, von Clausewitz (1832), said strategy is "the use of the engagement (a set of actions) for the purpose of the war." He also recognized the need for the strategist to complement good advance planning with being engaged directly in the campaign, allowing the general plan to be "adjusted to the modifications that are continuously required." The word strategy is derived from the Greek strategia, which referred to that which is "general." Strategies are the "means" of accomplishing the "ends" (i.e., objectives). In organizations, we are especially interested in strategies dealing with major, comprehensive, vital issues and achieving objectives related to them. There are fuzzy boundaries between what might be considered "strategic," "tactical," and "operational." Strategic issues and matters tend to be: broader, of higher importance and centrality, of greater impact on the organization, more unique, less well-defined, with longer time horizons and greater uncertainty, more comprehensive, and higher in demands on resources. "Strategic thinking" is not merely thinking about strategy. It is a process in which key, significant issues are considered in a comprehensive, special way. It involves recognizing and concentrating on issues and events that are of core importance. It embodies awareness of the interconnections and systemic properties of the situation. It requires a thorough understanding of both the situation (possibly, the organization) and its larger context. It includes an appreciation of the consequences and implications of actions, plus the moral courage to acknowledge problems with a favored alternative, as well as its advantages. It involves an understanding of how the situation will change over time and the importance of maneuvering for superior position and flexibility to deal with turbulence and to keep ahead of the competition. It exhibits an integration of both logical, rational thinking and creative, generative thinking. Morrison & Less (1989) say "the successful strategic thinker is guided by a clear business concept based on a thorough understanding of the economics of the business and of the success factors in the industry." The ancient Athenian theorist, Xenophon (c. 400 B.C.) described the most important attribute for a strategist as "knowing the business which you propose to carry out." Porter (1987) states, "There are no substitutes for strategic thinking. Improving quality is meaningless without knowing what kind of quality is relevant in competitive terms. Nurturing corporate culture is useless unless the culture is aligned with the company's approach to competing. Entrepreneurship, unguided by strategic perspective, is much more likely to fail than succeed." Higgins (1993) argues that the actual strategic thinking is more important than the resulting strategies themselves, because the situation and strategies to face it will change. "What is critical is awareness of what's important and what's not." A number of writers have talked about the limitations of merely "planning" strategy. De Wit and Meyer (1999) write of the paradox of logic and creativity, of the debate among strategists about the relative importance of logical/rational and creative/divergent/lateral/generative thinking. There are advantages and disadvantages of each type of thinking. Obviously, it is desirable to develop a high order of skill in each and the ability to operate with a flexible, contingent integration that combines both types of thinking. Rothenberg (1979) coined the term "Janusian thinking" (after Janus, the Roman god with two faces that looked in opposite directions) to refer to thinking contradictory thoughts at the same time; i.e., conceiving two opposing ideas to be true concurrently. Rothenberg claimed, after studying 54 Nobel Prize winners, that most major scientific breakthroughs and artistic masterpieces are products of Janusian thinking. He concluded that creative people who actively formulate antithetical ideas and then resolve them produce outstanding results. He cites the example of Einstein's account of "the happiest thought of my life." Einstein recalled his first thinking of the concept that "for an observer in free fall from the roof of a house, there exists, during his fall, no gravitational field... in his immediate vicinity. If the observer releases any objects, they will remain, relative to him, in a state of rest." This antithetical idea led to his general theory of relativity. Rothenberg's point is to advocate reversing or contradicting currently accepted ideas to expand the range of perspectives considered. I like Mintzberg's (1987) way of talking about "crafting" strategy, involving both logic and planning but more. He speaks of how strategies can form as well as be formulated, of how actions may converge into patterns -- some of which may be recognized and legimated by authorities, and that some strategies may emerge rather than be designed through deliberate, advance formulation. He argues that all strategy making needs to combine both deliberate and emergent processes -- that no one knows enough to work out everything in advance and, conversely, no one can count on leaving everything up to impromptu responses. He plays off Kierkegaard's observations that life is lived forward but understood backward to conclude that crafting strategy "requires a natural synthesis of the future, present, and past."