Strategic thinking is a process that is very much like picture painting. It is the picture or profile that will determine the direction, nature, and composition of the business. Strategic thinking, then, is the type of thinking that goes on within the mind of the CEO, the strategist, to shape, and clarify the organization’s future strategic profile. Decisions that “fit” within the parameters of this profile are taken and implemented, and decisions that do not fit the profile are rejected.
The Biggest Challenge…Constant Change!
For CEO – Entrepreneurs the biggest challenge is that the mental profile (what Peter Senge calls a “Mental Model”) keeps shifting and changing – either from necessity, to deal with adversity, or from a cornucopia of opportunity and possibility that the CEO – Entrepreneur sees and wants develop. From the perspective of the senior leadership team around the CEO-Entrepreneur, this often looks like ‘never meeting an idea or opportunity that you didn’t like’. It also leads to frequent shifts in direction that look like ‘whim’ because the CEO-Entrepreneur is having the conversation with himself/herself about all these opportunities and forgetting to involve anyone else in them (or thinking that others were involved, informed when, in fact, they were not).
So, in companies that are run by CEO-Entrepreneurs, the CEO is typically the ‘keeper of the strategic vision flame’. After all, it is frequently the CEO’s money, house, personal signature and assets on the line. As a result, it is the CEO’s strategic thinking that shapes where the organization is going.
As that strategic vision gets shaped and clarified, it is important for the CEO-Entrepreneur to regularly share it with the senior leadership team. For those CEO’s particularly adverse to the ‘stricture of structure’ this can be a process that looks frustrating and unnecessary. The CEO’s challenge is that failing to keep the people around him or her ‘in the loop’ about current strategic thinking will ultimately invalidate the very people most needed to realize the strategic vision – to get the strategic thinking implemented. It is particularly important for the CEO to bring the leadership team ‘inside’ – to let them in on what you are thinking and give them an opportunity to voice support, concerns, challenges and issues from their perspective.
As CEO, this is a ‘delicate’ process. If you shut off the input – the discussion – because you don’t want to hear any negativity or ‘Doubting Thomas’ points of view, you’ll effectively emasculate the infrastructure you’ve put in place to drive the company forward. If you hear too much of it, you may form negative opinions and points-of-view about some of your most important people. More importantly, you may miss terrific input that helps fill-in gaps in your own strategic thinking. Regardless of how invested you are in your ideas, of how certain you are that no one else has as much on the line as you do, the old saying “two heads are better than none” applies here.
Defining Strategic Thinking
Let’s take a look at what strategic thinking looks like. Essentially we are documenting some of what goes on in the CEO-Entrepreneur’s head and looking at how to get more team alignment through participation of the senior leadership team in the company.
First, strategic thinking is different from strategic planning and operational planning. In fact, strategic thinking is the framework for the strategic and operational plans.
Strategic thinking is the type of thinking that attempts to determine what the organization should look like. In other words, the strategy. Operational planning, and even what has become known as strategic planning, is the type of thinking that helps us choose how to get there.
The strategic thinking process, therefore, can be described as the type of thinking that attempts to determine what an organization should look like in the future. Strategic planning systems, on the other hand, help choose how to get there.
Strategic thinking about taking a fresh approach to the subject of strategy. It identifies the key factors that dictate the direction of an organization, and it is a process that the organization’s management uses to set direction and articulate their visions. For strategic thinking to be successful, it is necessary to obtain the commitment of the organization’s key executives and the commitment of others who will be called upon to implement that vision. Naturally, the vision is greatly shaped by the CEO.
The most effective strategic thinking processes are inclusive. Leland Russel, who wrote “Winning In Fast Time” poses the question “how many people should be included in strategic thinking” and his answer is “as many as you can stand”. The point is that getting varied input – from various levels of the organization is important to successful long-term strategic thinking.
Strategic thinking is intended to extract from the minds of people who run the business their best thinking about:
What is happening in the business,
What is happening outside in the environment, and
What should be the position for the business in view of highly qualitative variables (opinions, judgments, and even feelings)—not just the quantitative ones?
Getting those minds engaged in a meaningful way is an important part of the process and the part most easily overlooked by the Entrepreneur-CEO.
Properly done, strategic thinking produces a vision, a profile of what an organization wants to become, which then helps managers make vital choices. It enables management to put the corporation in a position of survival and prosperity within a changing environment.
Why Strategic Planning Fails…The S.P.O.T.S. Exercise Effect
Strategic thinking in an organization environment is at it’s best when it is embedded into the thought processes and deliberations of the senior leadership team on a regular basis throughout the year. Too many strategic processes are oriented around the annual strategic planning retreat. You know what that looks like – the senior team goes ‘offsite’ for two days for a planning meeting. The output – a three-ring binder – is written shortly after the offsite and promptly put on the top shelf where it sits until next year – it’s a SPOTS exercise – “Strategic Plan On Top Shelf”. Everyone is far too busy running the business day-to-day to spend any time in strategic territory once the annual interruption of an offsite retreat is over.
It does not take but two or three of these sessions to have the entire team wondering, “Why are we doing this?”
Strategic Thinking needs to become part of the vocabulary and included regularly – at least quarterly, ideally, monthly – in the leadership team’s conversations and discussions. There needs to be an ongoing forum for continued exploration of strategic themes and direction, progress we are making on the strategic agenda for the current year and, very importantly, to look at how our strategic thinking and agenda has not survived it’s contact with reality.
It is critically important that the impetus come for strategic thinking come from the CEO and the senior leadership team of the organization. Without clear, consciously stated support from the top, the thinking simply won’t happen and, even worse, there is not a commitment to implementation – which is where most strategic processes fail in organizations.
As CEO, think in terms of “Strategic Thinking” instead of just ‘strategic planning’. Get your team engaged about the idea of spending time in strategic territory as part of your monthly and quarterly processes. Make Strategic Thinking an ‘embedded process’ and it will pay off in improved implementation and commitments to making things happen in your organization.