What Is “Thinking Strategically” Anyway?

Ben Olds Coaching, Driving Productivity, Employee Coaching, Leadership, Learning and Development, Performance, T+D, Training and Development

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?