Strategic thinking is the type of thinking that goes on within the mind of the CEO and the key people around him or her that helps them determine the “look” of the organization at some point in the future. Decisions that “fit” within the parameters of this strategic profile are then taken and implemented, and decisions that do not “fit” the profile are rejected.
Strategic thinking attempts to determine “what” an organization should look like in the future, whereas strategic planning helps choose “how” to get there.
Executives of many companies and organizations are thought to be operationally competent but strategically deficient. In the past, U. S. companies/organizations could do no wrong, so there was no need to develop strategic skills. Now, the need exists to develop better long-term strategies that are smart in allocation and pursuit of opportunities.
Strategic planning emphasizes quantitative and numbers planning which discourages risk taking and innovation. Most strategic planning forces people to make extrapolations of historical numbers. They oblige managers to look back at five years of history and make numerical projections for the next five years by adjusting for costs, inflation, share, etc. This type of planning does nothing to change the direction or composition of the company or organization. For many, this type of planning becomes a rote exercise.
Strategic thinking is a process that enables the management team to sit together and think through the qualitative aspects (opinions, judgments, and even feelings) of its business and the environment it faces. The team can then decide on a common and shared vision and a strategy for the future of its organization. It enables management to put the organization in a position of survival and prosperity within a changing environment. Strategic thinking starts with a clarification of the organization’s current profile – scope of products/services, how products/services are grouped, trends or cycles they experience, scope of geographic areas they serve, the user groups they have attracted, the structure in place to support the identified products/services, the current driving force, current business concept, current areas of excellence, corporate beliefs/values, etc. Then, you proceed to an in-depth analysis of internal
and external variables, then look at various driving forces to determine which can propel you into succeeding in the future, all to create a tentative strategic profile. Then you look at who the competition is before creating a final strategic profile.
Strategic thinking gives you an opportunity to think through the implications of the changes made in strategy and direction and to identify the critical issues that stand in the way of making your strategy work. Resolving these issues become management’s agenda.
The dynamics and complexity of the world require more than conventional wisdom and experience – merely setting objectives without examining what actions are feasible and what alternatives are available isn’t sufficient. In the past, strategies have been based on the objectives and goals you choose, not on environment and abilities. This usually leads to objectives that are set unrealistically high and difficult to attain unless there are unlimited resources. An opportunity exists within every organization to embark on a process that challenges the status quo and stretches current thinking in planning for the future, while enjoying past and current successes.