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Strategic thinking is a mental or thinking process applied by an individual in the context of achieving a goal or set of goals. As a
cognitive Cognition refers to "the mental action or process of acquiring knowledge and understanding through thought, experience, and the senses". It encompasses all aspects of intellectual functions and processes such as: perception, attention, thought, ...
activity, it produces
thought In their most common sense, the terms thought and thinking refer to conscious cognitive processes that can happen independently of sensory stimulation. Their most paradigmatic forms are judging, reasoning, concept formation, problem solving, a ...
. When applied in an organizational
strategic management In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on consideration of Resource management, resour ...
process, strategic thinking involves the generation and application of unique business insights and opportunities intended to create competitive advantage for a firm or organization. It can be done individually, as well as
collaboratively Collaboration (from Latin ''com-'' "with" + ''laborare'' "to labor", "to work") is the process of two or more people, entities or organizations working together to complete a task or achieve a goal. Collaboration is similar to cooperation. Most ...
among key people who can positively alter an organization's future. Group strategic thinking may create more value by enabling a
proactive Proactivity or proactive behavior refers to self-initiated behavior that endeavours to solve a problem before it has occurred. Proactive behavior involves acting in advance of a future situation, rather than reacting. It refers to taking control o ...
and creative
dialogue Dialogue (sometimes spelled dialog in American English) is a written or spoken conversational exchange between two or more people, and a literary and theatrical form that depicts such an exchange. As a philosophical or didactic device, it is c ...
, where individuals gain other people's perspectives on critical and complex issues. This is regarded as a benefit in highly competitive and fast-changing business landscapes.


Overview

There is a generally accepted definition for strategic thinking, a common agreement as to its role or importance, and a standardised list of key competencies of strategic thinkers. There is also a consensus on whether strategic thinking is an uncommon
ideal Ideal may refer to: Philosophy * Ideal (ethics), values that one actively pursues as goals * Platonic ideal, a philosophical idea of trueness of form, associated with Plato Mathematics * Ideal (ring theory), special subsets of a ring considere ...
or a common and observable
property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
of strategy. It includes finding and developing a
strategic foresight Strategic foresight is a planning-oriented discipline related to futures studies. In a business context, a more action-oriented approach has become well known as corporate foresight.Rohrbeck, Rene (2010) ''Corporate Foresight: Towards a Maturity Mo ...
capacity for an
organization An organization or organisation (Commonwealth English; see spelling differences), is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose. The word is derived from ...
, by exploring all possible organizational futures, and challenging conventional thinking to foster
decision making In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either rati ...
today. Research on strategic thought indicates that the critical strategic question is not the conventional "What?", but "Why?" or "How?". The work of
Henry Mintzberg Henry Mintzberg (born September 2, 1939) is a Canadian academic and author on business and management. He is currently the Cleghorn Professor of Management Studies at the Desautels Faculty of Management of McGill University in Montreal, Quebec, ...
and other authors, further support the conclusion; and also draw a clear distinction between strategic thinking and
strategic planning Strategic planning is an organization's process of defining its strategy or direction, and making decisions on allocating its resources to attain strategic goals. It may also extend to control mechanisms for guiding the implementation of the st ...
, another important strategic management thought process. General Andre Beaufre wrote in 1963 that strategic thinking "is a mental process, at once abstract and rational, which must be capable of synthesizing both psychological and material data. The strategist must have a great capacity for both analysis and synthesis; analysis is necessary to assemble the data on which he makes his diagnosis, synthesis in order to produce from these data the diagnosis itself—and the diagnosis in fact amounts to a choice between alternative courses of action." Most agree that traditional models of strategy making, which are primarily based on strategic planning, are not working. Strategy in today's competitive business landscape is moving away from the basic ‘strategic planning’ to more of ‘strategic thinking’ in order to remain competitive. However, both thought processes must work hand-in-hand in order to reap maximum benefit. It has been argued that the real heart of strategy is the 'strategist'; and for a better strategy execution requires a strategic thinker who can discover novel, imaginative strategies which can re-write the rules of the competitive game; and set in motion the chain of events that will shape and "define the future". There are many tools and techniques to promote and discipline strategic thinking. The flowchart to the right provides a process for classifying a phenomenon as a scenario in the intuitive logics tradition, and how it differs from a number of other planning approaches.


Strategic thinking vs. strategic planning

In the view of F. Graetz, strategic thinking and planning are “distinct, but interrelated and complementary thought processes” that must sustain and support one another for effective strategic management. Graetz's model holds that the role of strategic thinking is "to seek innovation and imagine new and very different futures that may lead the company to redefine its core strategies and even its industry". Strategic planning's role is "to realise and to support strategies developed through the strategic thinking process and to integrate these back into the business".
Henry Mintzberg Henry Mintzberg (born September 2, 1939) is a Canadian academic and author on business and management. He is currently the Cleghorn Professor of Management Studies at the Desautels Faculty of Management of McGill University in Montreal, Quebec, ...
wrote in 1994 that strategic thinking is more about synthesis (i.e., "connecting the dots") than analysis (i.e., "finding the dots"). It is about "capturing what the manager learns from all sources (both the soft insights from his or her personal experiences and the experiences of others throughout the organization and the hard data from market research and the like) and then synthesizing that learning into a vision of the direction that the business should pursue." Mintzberg argued that strategic thinking cannot be systematized and is the critical part of strategy formation, as opposed to strategic planning exercises. In his view, strategic planning happens ''around'' the strategy formation or strategic thinking activity, by providing inputs for the strategist to consider and providing plans for controlling the implementation of the strategy after it is formed.Henry Mintzberg. The Fall and Rise of Strategic Planning. Harvard Business Review. January 1994
/ref> According to
Jeanne Liedtka Jeanne M. Liedtka, (born March 2, 1955) is an American strategist and professor of business administration at the Darden School of the University of Virginia, particularly known for her work on strategic thinking, design thinking and organic ...
, strategic thinking differs from
strategic planning Strategic planning is an organization's process of defining its strategy or direction, and making decisions on allocating its resources to attain strategic goals. It may also extend to control mechanisms for guiding the implementation of the st ...
along the following dimensions of
strategic management In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on consideration of Resource management, resour ...
:


Strategic thinking competencies

Liedtka observed five “major attributes of strategic thinking in practice” that resemble competencies: # ''Systems perspective'', refers to being able to understand implications of strategic actions. "A strategic thinker has a mental model of the complete end-to-end system of value creation, his or her role within it, and an understanding of the competencies it contains." # ''Intent focused'' which means more determined and less distractible than rivals in the marketplace. Crediting Hamel and Prahalad with popularising the concept, Liedtka describes strategic intent as "the focus that allows individuals within an organization to marshal and leverage their energy, to focus attention, to resist distraction, and to concentrate for as long as it takes to achieve a goal." # ''Thinking in time'' means being able to hold past, present and future in mind at the same time to create better decision making and speed implementation. "Strategy is not driven by future intent alone. It is the gap between today’s reality and intent for the future that is critical." Scenario planning is a practical application for incorporating "thinking in time" into strategy making. # ''Hypothesis driven'', ensuring that both creative and critical thinking are incorporated into strategy making. This competency explicitly incorporates the scientific method into strategic thinking. # ''Intelligent opportunism'', which means being responsive to good opportunities. "The dilemma involved in using a well-articulated strategy to channel organisational efforts effectively and efficiently must always be balanced against the risks of losing sight of alternative strategies better suited to a changing environment."


See also

* U.S. Army Strategist


References


External links


What is strategic thinking?
harvardbusiness.org

by Paul J. H. Schoemaker, Inc.com

by Joshua Ehrlich, Harvard Business Review

by Michael Watkins, Harvard Business Review

Dr David Stevens, McGraw Hill, 1997
Strategy Execution – Ensure your culture provides for common sense
by i-nexus {{Authority control Strategic management Business planning Business terms Strategy