Strategic thinking is thinking about the future – because strategy is about ensuring your organisation has a future.
Strategic thinking starts with information about change you found when you were scanning. You will need robust information about change shaping your organisation’s future to allow you to deepen the conversation you have about what that future might be.
Strategic thinking happens in three, interconnected steps:
divergence where you seek out diversity of perspectives on issues, and look for the contrary views;
emergence, where you let go of deeply held assumptions to see what new ways of seeing what’s possible for your organisation emerge (note: this stage is critical but the most difficult to do well); and
convergence, where you connect your thinking to acting today by identifying what responses you will take now.
You need all three steps – there are no short-cuts. The ability to think strategically means your brain has to operate like it was flying at 20,000 feet. You are flying above the detail to see what’s on the horizon – and what you need to avoid. At some stage though, you will have to land, and this is where you focus on what you do ‘on the ground’, every day. The two are not mutually exclusive, but you do have to think about the big picture first before getting into the detail.
What is Strategic Thinking?
Strategic thinking is the second phase needed to develop effective organiational strategy. Strategic thinking provides the ability to systematically explore possible organisational futures to inform decision making today.
Freeing up our thinking today means that you can generate more strategic options that might otherwise have emerged than if you used only conventional planning processes. Using environmental scanning output and working as a group, staff can share their views about the future of their organisation, which provides additional rich data to consider prior to making strategic decisions.
Strategic thinking is only useful if it enhances decision making today. Foresight approaches include particular tools to ground strategic thinking in the realities of decisions that have to be made today so that practical outcomes are achieved.
How to think strategically?
Scenario thinking is a tool that lets you explore possible and plausible operating environments for your organisation, and to identify opportunities and challenges that you need to begin preparing for today.
The first step in building a strategic thinking capacity though is to do environmental scanning. If you don’t scan, then you are not finding the signals of change in the external environment – the trends and drivers of change that are likely to have a significant impact on the way you do business in the future. Remember, that what seems reasonable today probably won’t be seen as reasonable in the future. Your business model today probably won’t work in the future.
Combining scanning with scenarios allows you to think strategically about what’s coming for your organisation, and what actions you will take today to be futures ready.
Contact Maree Conway if you would like to know more about using scanning and scenarios to build your organisation’s capacity to face the future.
Some of the Strategy Literature Says…
A 1999 discussion paper on Strategic Thinking produced by Eton Lawrence for the Research Directorate in the Policy, Research and Communications Branch of the Public Service Commission of Canada provides a useful overview of strategic thinking, and how it relates to strategic planning. Lawrence concludes that:
“strategic thinking … is not only critical to the survival of the organization in these times of rapid and accelerating change, but more importantly, can be effectively accommodated within a progressive strategy-making regime to support strategic planning … strategic planning and strategic thinking work in tandem, rather than [a model] in which strategic planning impedes the flourishing of strategic thinking” (page 13).
As Leidtka (“Linking strategic thinking with strategic planning”, Strategy and Leadership, October 1998, (1), 120-129) suggests, strategic thinking is about disrupting alignment to create a view of a preferred future, while strategic planning is about creating alignment and dealing with current realities. She identifies five characteristics associated with strategic thinking:
- systems perspective,
- intent focus,
- intelligent opportunism,
- hypothesis driven.
Heracleous (1998, cited in Lawrence, 1999) suggests that the purpose of strategic thinking is to discover novel, imaginative strategies which can re-write the rules of the competitive game; and to envision potential futures, significantly different from the present. Thought processes here are synthetic, divergent and creative. The purpose of strategic planning is to operationalize the strategies developed through strategic thinking, and to support the strategic thinking process. Thought processes here are analytical, convergent and conventional.
The need to integrate divergent thinking into planning and strategy processes is also highlighted by John Ratcliffe, previously at the Futures Academy at Dublin Institute of Technology. In a paper (“Challenges for Corporate Foresight: Towards Strategic Prospective through Scenario Thinking”, Foresight, 2006, 8 (1): 39-54) he describes three distinct phases in futures work in organisations: divergence, emergence and convergence.
The focus of most futures work is currently on emergence with little or no emphasis on the divergence and convergence stages, resulting in little difference between futures work and conventional strategic planning processes. His work has therefore been around developing a futures approach called “strategic prospective through scenarios thinking” which integrates scenario planning with the French prospective method. So, spending time dealing with divergence and actively encouraging it in the form of strategic thinking is a necessary precursor to the effective emergence of strategic options.
Paul Schoemaker, 6 Habits of True Strategic Thinkers, Inc.com, published 20 March 2012.
My book, Foresight Infused Strategy: A How-To Guide for Using Foresight in Practice – it has a chapter on strategic thinking and how to do it.