What Is “Thinking Strategically” Anyway?

Throughout my career, I’ve seen employees lauded or criticized for their ability to “think strategically.” It’s in numerous competency models and used in performance management systems across the country. We use this term like it’s universally understood, but ask people to describe it and you’ll probably hear inconsistency. So what is “Thinking Strategically” anyway?

To understand what it is, let’s first discuss what it is not. Where is it that you see a distinct lack of strategic thinking?

One place you see the lack of strategic thinking is the planning phase: did someone just dive in and start executing, or do they have a plan of attack? Thinking strategically is not diving into execution until you’ve formulated a plan to allocate scarce resources in pursuit of your goal. You can also assess the level of strategic thinking in the actual goal being pursued. Strategic thinking is focused on the overarching business objectives, not some tactical step function. For example, you may have been assigned the tactical objective of hiring 150 people this year. The strategic thinker asks what the business objective is that we’re trying to achieve with that tactical step. Perhaps it’s to enable the launch of our first product in a profitable manner, in which case the strategic thinker might hire 125 or 175 people, or slow down or speed up, depending on the circumstances. However, if the business objective is to secure $10M in state funding because you created at least 150 jobs in MA, then you’d better not consider options like only hiring 125 employees! The strategic thinker isn’t just blindly pursuing the tactical objective assigned, but getting to the broader business objective at hand.

Another place strategic thinking sometimes doesn’t show up is in the execution phase: Is someone thinking critically about tradeoffs in favor of that business objective, or automatically choosing the easy/quick/cheap option? Thinking strategically is seeing the world as it is and not how you’d like it to be, and therefore confronting sometimes brutal realities and being able to sacrifice where necessary in favor of the greater business objective.

For example, it’s possible that, once you get into your plan, you’ll realize you can’t both meet your budget and deliver on time. Strategic thinking recognizes this, considers the overarching business priorities, and makes tradeoffs accordingly (e.g., meet our budget but push back launch a month, or exceed budget by 20% to make sure the product is ready for the original launch date.). This also shows up when balancing short-term and long-term factors. It’s not strategic to sacrifice tomorrow to achieve a quick win today. Likewise, I once worked in a company so focused on long-term investments that we allowed our cash position to get so precariously low that we went bankrupt, so you don’t want to ignore the short-term either. Thinking strategically requires balancing the short-term and long-term perspectives in your tradeoff decisions along the way.

Finally, we can notice a lack of strategic thinking when new developments present game-changing information. Is someone responding to that new information with a reformulated plan to pursue the business objective, or staying myopically committed to the original plan? Thinking strategically is always thinking two steps ahead, monitoring the situation and adjusting in real-time to stay on track. For example, An NFL coach might have a gameplan that assumes certain behavior by his opponent. If that opponent alters his behavior during the game, the strategic move is to reformulate the game plan in response, not stay committed to the original gameplan.

So what is thinking strategically anyway? I believe it’s all of the below:

  • It’s making a plan in pursuit of the broader business objectives at play
  1. Asking why you’re being asked to do what you’re doing and identifying the broader business objective.
  2. Then designing a plan of attack.
  3. Finally, determining how to monitor progress against that overarching business objective so you get early data on what’s going well and where you need to pivot.
  • It’s making tradeoffs along the way in pursuit of that broader objective
  1. Seeing the world as it is and confronting brutal realities
  2. Being willing to sacrifice where necessary
  3. Balancing the needs of the short-term and long-term in pursuit of the business objective
  • It’s reevaluating the plan and pivoting in the moment, when necessary
  1. Always thinking two steps ahead of the next issue
  2. Maintaining the flexibility to respond in the moment, even if it means a new plan.

Do those things above, and you’ll be thinking strategically. What other advice do you have about this ambiguous concept that we all discuss so casually?

FOT Background Check

Ben Olds
Ben works in HR/OD at Merrimack Pharmaceuticals, a Cambridge company dedicated to the simple goal of trying to cure cancer… no big deal! Ben’s on his second career, having spent his first in business/strategy consulting, mostly with Bain & Co and Monitor Group, which basically just means he relies on MS Excel to solve virtually any problem he faces. If he’s not coaching or working with colleagues on their approach to leadership, he’s helping teams create effective dynamics or planning a recognition program to motivate employees. And sometimes, he’s chasing his wife around the ice hockey rink in his weekly pick-up game, or playing tennis, squash, skiing, hiking, mountain biking, or anything else to expend his nervous energy!

2 Comments

  1. John Oliver says:

    Very interesting angle Ben that the term is ubiquitous yet ambiguous. My MBA strategy professor showed us a video of the World record in speed house-building to show “strategy” in its highest form….yet this screamed out to me as being a simplification of strategy. Building a house is a well known / honed process – a world record in house-building (in just a few hours I recall) shows purely operational and planning excellence in my opinion.

    Strategy is more about dealing with uncertainties, ever shifting terrain and 2nd and 3rd order complexities (for example the system parameters change as you move). Senge’s Fifith Discpline was a major reference in how self-knowledge and mastery brings the “observer” who is doing the thinking about strategy, into the equation too (and I use equation here deliberately, since the Fifth Discipline is still I see as being a systems thinking approach).

    Research and theory that can contribute to progress in how we define strategic thinking that I’m excited about comes from Michael Commons’ Model of Hierarchical Complexity and Kurt Fischer’s Dynamic Skill Theory. How we think about and how we deal with more and more complex strategic questions can be mapped out (and measured) in very granular ways. This includes skills such as perspective taking and contextual thinking that you include in your piece – and the theory provides an elegant way of how we can make more explicit exactly what constitutes strategic thinking.

    Direct beneifts from such models which break down the elements of strategic thinking are in helping us in learning continually how to improve our thinking skills!

    Reply
  2. Steph Sharma says:

    Great focus area Ben – one that gets little pause in our execution-obsessed business strategy systems! I also appreciate John’s comments very much.

    I would also add that Thinking Strategically is not something we are taught to do – well, if at all. Then when we get into business, we are rewarded for planning and execution. It is more than ‘why’ though that is a great way many do relate to the pause required to reconcile change, paths, decision-making. It is about how we interact with others, how we read the things around us and how we process that information.

    We spend 75% of an entire term on this topic just because it will be the only 10 weeks MBA students will be focused on things other than planning and doing. Maybe the time and practice will help them ‘learn’ so that when they are in act of strategic processes, they can incorporate the thinking function.

    My reference for this comes from time with Julia Sloan (http://www.sloaninternationalconsulting.com/julia.html) and her 2nd edition is our text at Pinchot (www.pinchot.edu).

    Thank you again for bringing light and practical application to this imperative for great strategy!

    Reply

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