Usually in an organization, traditionally, the upper level management are the ones who are responsible for strategic thinking.
When you come to think of it, do they necessarily have the skills to pull it off?
Reality is, most of the senior executives do not have the skills to do the job either.
Today we will learn how to increase our competency in that area – strategic thinking. What is it, in the first place?
We throw the word around a lot but what is it? Strategic thinking is what we need to have a competitive advantage. It is having a business insight to continuously achieve that advantage.
Other companies do this annually but is it effective? What can we learn from this?
The Types of Managers
We will make a comparison of the types of managers with the ocean life.
Beach Bums: They like hanging out on the beach, strolling and lounging around. They rarely get into the water.
These are the types of mangers who are just there. You see them but they do nothing. They do not make an impact because they do not contribute.
Snorkelers: They like the water but not too much to dive in deeper. So they just get a view by snorkeling on the surface instead.
These are the managers who do a bit of work but not much enough to create impact on the business.
Scuba Divers: They want to see what’s beneath the ocean in a deeper level so they go underwater in full gear.
You can compare the scuba divers with managers who provide valuable insights however they rely on heavy assistance to delve deeper into the issues. They can only contribute when they have someone to assist them.
Free divers: They go underwater without an apparatus and they can survive.
Free divers are managers who are prepared to solve problems. They know what is needed to dive into the issues. They have business insights – they are the strategic thinkers.
Making That Strategy
Since some upper management really do not have any idea what strategy is they have a lot of misconception about it.
Goals – For some reason, strategy is sometimes understood as their goal by some. Strategy is not something you should aspire to. Strategy is what you employ when you want to achieve the goal you have set.
Best Practices – Some people understand strategy as the situation when you apply the best practices. It’s not about trying to outdo the competition. Best practices don’t distinguish you from your competition. It’s just copying what they do and trying to be better at it. It’s not at all being different from them.
Playing Safe – It’s not also being on the safe side always. When you employ strategy, you take risks and you understand that there could be some trade-offs along the way.
Clearing these misconceptions, what is a strategy? It is wisely using the available resources through particular, distinctive tasks and with these – ultimately performing better than the competition.
You don’t have to outperform the top selling product or service, sometimes you just have to offer something different to be successful.
What do strategic thinkers do when they plan? They look at things through different aspects. They see it in different perspectives to see the entire situation.
Industrial Aspect – What does the customer want? Who is the competition? What products should you offer to stand out? Who will be your suppliers for your business?
Organizational Aspect – Whereas the industrial aspect focuses on the external, we go internal on this. What are the available resources you have within that you can utilize to achieve your goals?
Individual Aspect – We get down with an individual’s mind, what motivates a person? What can you do to change their mindset? Each person has their own sets of beliefs, biases, and set of experiences – how do we get around those?
To achieve strategic thinking, one must gain insight. When you have insight, it’s easier to connect situations to a solution or advantage. Business insights provide an organization an idea if the goal is achievable. If strategies are built without basis, this may lead to unmet expectations.
One must take note that when you’re building the strategy, think about the circumstances around. See if it’s within context.
Also, look at your customers! Don’t forget that they could be your insight’s source as well. What they say, their behavior – it provides valuable insights actually. You could really learn a lot from them, you gain a bigger and better perspective.
Lastly, questions provide insights as well. Questions can make you think. Let it seep into your subconscious. The questions can stimulate your mind for insights.
And of course, what comes with strategic thinking? Resource allocation. Reality is – resources are limited and it must be allocated wisely. What are these assets that should be thought about?
Physical assets/ Funds /Capital – These are the tangible assets of the organization.
Branding, Company culture, Company Reputability – And these are the intangible ones.
People – Talent, skills, competencies, experience, and knowledge, these are what they bring into the company.
There is the danger of focusing too much on the tangible assets because they are visible to the eyes. When this happens, the intangible ones are neglected. Human resources are assets that should be developed and well taken care of.
Now that you know your resources, what role does it play in your strategy? What should be the criteria?
Sustainable – This should be a given, the resource should be replenishable.
Value-adding – It should be of value to the customer. It should be proved useful.
Substitutes – The resource shouldn’t be easily replaceable.
Replicates – It is also important that the resource is hard to duplicate.
In allocating resources, it is imperative to understand that there will be compromises. There will be risks, there will be trade-offs. It can be risky but it should be done.
What is the culmination of these all? Of course, putting everything into action. It’s not enough that we have built a strategy. It won’t be successful by itself as action must be taken. However for some reasons, it may fail. What do you watch out for?
Accountability – Responsibility should be clearly defined. With no accountability clearly set, there’s no one pushing through with the strategies.
Communication – When there’s lack of communication, the strategy is not conveyed properly. Other team members won’t understand how they are affected by the strategy.
Poorly conceived strategy – It is what it is, if it’s a bad one – it won’t really work.
Resource – The resources needed aren’t explicitly called out, so what do you expect? Without the resources needed, the strategy can’t push through.
To summarize, that’s how we pull off strategic thinking. Gain business insights, allocate your available resources wisely, and of course – put everything into action!