The focus of this chapter is on how to develop and practise your capability as a strategic thinker. We distinguish core capabilities that mark out strategic thinking and stress the importance of making time in your diary to reflect and really think.

WHY IS THIS IMPORTANT?

Surveys show that strategic thinking is one of the top three capabilities that are valued and looked for in senior leaders.Most management competency frameworks include strategic thinking, so this is something that interviewers try to identify during the job selection process. However, it is one of the things that interview candidates have most difficulty understanding, discussing and giving practical examples that demonstrate their capability.

Organisations cannot survive by just aimlessly repeating what they did last year, or even last month. You need to be able to respond to changing circumstances, take advantage of emerging trends and constantly find new ways of delighting your customers with new levels of service and products that were previously unimaginable.

To this end, a fundamental capability for all managers is the ability to initiate and bring about change. But an organisation needs its change initiatives to be aligned towards a common purpose. That purpose is articulated in the business strategy and managers need to be able to internalise that strategy to the extent that it provides a guiding framework for all their decision-making.

THE IMPACT OF THE ISSUE

You may have seen organisations being torn apart by parochial decision-making that puts the narrow needs of a function above the broad goals of the organisation. All too often, you probably witness local decision-making that can only hope to serve the ends of local leadership.

Strategic thinkers are people who can think holistically and see beyond the limits of the current issue. They take a broad perspective on how a proposed course of action can contribute to the achievement of the long-term goals of an organisation as a whole, as well as resolving the immediate local problem.

When you are busy and stressed, and faced with a critical problem, it is difficult to find either the time or the perspective to see beyond the bounds of the immediate, but the strategic thinker always takes the broader perspective and the longer-term view.

The way you demonstrate strategic thinking is to focus on things that can contribute to bringing about long-term objectives. You should always use this perspective as the basis for your decision-making.

Strategic thinking is not just the preserve of the leaders at the very top of the organisation. Organisations need all managers and leaders at all levels to think and act strategically; that means understanding how what you are doing contributes to the achievement of the long-term goals of your organisation. It means making connections between the ideas, initiatives and desired outcomes that your organisation is pursuing and ultimately having different sorts of conversations with the people who are involved in delivering elements of the strategy.

MAKING SENSE OF IT ALL

If you Google ‘strategic thinking’, you will get in excess of 8 million hits. If you take a little time to investigate some of the hits, you will quickly notice that the content is long on business strategy and the process of crafting winning strategies, and very short on explanation of the different sort of thinking that is needed.

It would appear that most experts think that strategic thinking is what you do in order to create a business strategy. But when you go for a job interview and the HR representative tells you that they really need someone who can think strategically, they are not saying they expect you to work up their business strategy – no, that’s what the board does. So, that presents the following questions:

• What do they mean when they say they want a strategic thinker?
• What is strategic thinking and how is it different from the rest of the thinking you do?
• Does it need some elaborate process?
• Can it only be done when you are consciously formulating strategy?

An important skill of strategic thought is the ability to take a different view of a situation. But not just any different view; what you need is a view that allows you clear sight of your objective, where you are trying to get to, while at the same time letting you see the terrain that stands between you and your objective.

A good way to understand the nature of strategic thinking is to visualise the experience of walking a maze. As you enter a maze, you do so with no clear view of where you are trying to get to. You know you want to get to the middle, but you cannot see the middle and you have no idea where it is or how to get there. So, each time you come to a junction you are faced with having to make a choice; without any plan or overall route you can only make random choices. Each choice has the effect of opening or closing options but without any feedback on the success of the previous choice.

If, on the other hand, you were provided with a plan view of the maze taken from above, you would have no difficulty in seeing the most direct route to the centre. It seems obvious, but when you know what your objective is, and when you can see that objective in a broader context, decision-making becomes much easier and your route to success more sure and direct.

This is a great metaphor for strategic thinking. Sadly, though, many managers behave as if they are in a maze with no overall plan of what the maze or their objective looks like. Far too much organisational decision-making appears to be random, with no guidance from a consistent objective or set of guiding principles.

Most of the time, most of our thinking is what might be termed analytical and forward pass. You start with the problem and work forwards through logical steps until you find a potential solution. This form of thinking is so deeply ingrained in all of us through our education and experience that many people think that it is the only valid way to think, and that any other process is not real thinking.

But there is another way to think. Stephen Covey calls it ‘backwards thinking’ or ‘beginning with the end in mind’; he sets this out in his The 7 Habits of Highly Effective People (2004). Others call it systems thinking, backward-pass thinking, intuition or synthesis. Whatever you call it, the process is as follows (see Figure 2.1):

Figure 2.1 Backward-pass thinking

You make an intuitive leap from ‘a’ to an attractive, but as yet unrealised, outcome ‘d’.

You then work backwards, asking yourselves, ‘What do you need to put in place now to make this outcome more likely to come about in the future?’

The important thing to realise is that the future state ‘d’ does not yet exist, nor is there any certainty that it will ever exist.

When you start to work backwards from ‘d’ you are not doing detailed planning of the steps you need to close the gap, but rather putting in place capabilities that make the realisation of this future more probable than the possible alternatives.

Key to this sort of thinking is the recognition that you operate within complex, adaptive, self-organising systems and that a fundamental property of such systems is ‘emergence’. New and unpredictable properties emerge as self-organising systems adapt to their environment.

So, the actions you put in place will have both intended and unintended consequences. A key skill is, therefore, to be alert to the emergence of new trends and to intelligently and opportunistically grasp these possibilities for the overall benefit of your organisations as a whole.

Strategy is not about blindly implementing some grand plan; it is about being aware of your environment. Looking for trends and unexpected or outlying readings that indicate that something fundamental may have changed. Things are constantly in flux and you need to be ready to recognise and exploit opportunities that emerge. You also need to do so in a way that is consistent with the overall aims of your business. If you accept this definition of strategic thinking, then the core skills that you need to develop are as follows:

• Outcome-focused thinking: being able to project yourself into the future and imagine a set of circumstances that would be beneficial for you or your organisation. You then need to craft a series of statements that describe the characteristics of that future’s state in terms of the capabilities you would need to create it and what it would feel like once you got there. Key to this is the ability to see every situation in its wider context.
• Backward-pass thinking: having imagined a desirable future, constantly ask questions such as: What would you need to put in place to make this happen?
• Intelligent opportunism: being alert to emerging trends and taking advantage of them.

To complete the process of strategic thinking, ultimate decision-making needs to be grounded in a set of core principles that place a higher value on promoting action to realise the desired outcomes than on merely taking action to resolve the symptoms of the problem that you are faced with.

PRACTICAL ADVICE

A key purpose of strategy is to produce action that is aligned towards a compelling long-term goal. So, as well as being able to think strategically you need to be able to communicate strategically; that means using language in a way that engages both hearts and minds and inspires people towards a consistent set of actions and choices. Most technical people are very good at talking in detailed terms but not so skilled at painting a vivid picture of a situation that drives a sense of purpose. The good news is that you don’t need to be engaged in strategy making to practise the skills you need for using strategic language. We suggest that you practise the following exercises as a way of polishing your outcome-focused view of a situation. All of these skills will improve with deliberate practise and appropriate feedback. Trying these techniques should not be a one-time effort on your part; you need to come back to them repeatedly over time, focusing on improving key aspects of your performance:

First, write a summary of a book or article that you have just read. Your summary should be no more than a single page of A4. This will require you to identify the governing thought of the book: what is the key message that everyone should take from reading this book?

Second, next time you visit a new city, imagine that you have been asked to write one paragraph for a travel brochure giving the potential visitor an impression of what they might experience. Again, the key to this task lies not in descriptive detail, but rather in your ability to discern a unique characteristic of a city and to convey that in a compelling manner, so that others might be captivated by the impressions you have conveyed. Your message needs to be emotionally compelling, but anchored in an achievable reality.

Having honed your language skills you need to proactively make time for thinking and that means really sensing what is going on both inside your organisation and in the wider industry sector. What trends do you see and what does not fit? To get better at backward-pass thinking, try to incorporate some of the following ideas into the way you analyse what you see:

• First, start with the visionary purpose: what do you want things to look like at some point in the future? This can be as far-fetched as you like; in fact, the wackier the better.
• Next, list and quantify the benefits you are seeking by creating this future.
• Then, consider which parts of the organisation will be involved in delivering the identified benefits.
• Finally, identify the capabilities that would need to be in place to bring about this environment and outcomes that you could create.
• Now you may refine your visionary purpose into something that would sound more potentially realistic.
• Think about the way you spend your time. How much of your daily time is devoted to activities that are directed towards the realisation of the capabilities that you have just imagined? What can you stop doing that will free up more of your time to think and act in a way that contributes to the achievement of these outcomes?

As your environment does not remain static, you also need to attune yourself to spot emergent factors and behave with intelligent opportunism. Try the following techniques:

• Paint a vision for your industry in five years’ time.
• Consider the generic technological capabilities that exist today, and consider how you could harness them to the advantage of your organisation.
• Consider examples of competitive advantage gained in other industries. What are the common themes? How could any of these be applied to your industry?
• Always remember to think of the possibilities rather than the problems. Reflect on the famous quote attributed to Thomas Edison: ‘I did not fail: I just succeeded in finding 100 ways not to make a light bulb’.

You might want to repeat the above exercise but with different time horizons. Notice how as you move further into the future you naturally engage in more ‘blue sky’ thinking. What would it take to bring ideas from your 20 year horizon into the reality of today? Now that you are on your way to developing the three core skills of strategic thinking, you need to align your decision-making around the core principles of achieving the desired outcomes and focusing on root causes rather than symptoms. You will know that you have succeeded in this when:

• you are leading the way rather than following or copying that of a competitor;
• you have provided direction and inspiration rather than prescription and rigidity;
• the people around you are excited by possibilities and choices;
• there is a positive atmosphere and people feel liberated rather than constrained;
• things are starting to happen and change for the better.

THINGS FOR YOU TO WORK ON NOW

Strategic thinking is not something you do once a year; it should be a normal part of the way you think about your contribution to achieving business outcomes. We have pointed to key skills that you need to develop that will help you to think, act and communicate in a way that marks you out as someone who understands and contributes to the wider goals of the organisation. Before you start to practise these skills, you need to make an honest appraisal of how you currently operate. Try asking yourself the following questions.

Think about your answers to the above questions and now work on the exercises suggested below. This is not a one-off activity; we suggest you revisit these exercises several times over the coming weeks and use them to practise your strategic conversations.

FURTHER FOOD FOR THE CURIOUS

• Bowman, N. (2016) ‘4 Ways to Improve Your Strategic Thinking Skills’. Harvard Business Review, December. Available from https://hbr.org/2016/12/4-ways-to-improve-your-strategic-thinking-skills [3 November 2017]:

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A concise and compelling digital article that gives some valuable practical advice.

• Davey, L. (2014) ‘Strengthen Your Strategic Thinking Muscles’. Harvard Business Review, January. Available from https://hbr.org/2014/01/strengthen-your-strategic-thinking-muscles [3 November 2017]:

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A two-page digital article that stresses the importance of making time for reflection and strategy as willingness to make choices about what you do and do not do.

• Collins, J. (2005) ‘Level 5 Leadership: The Triumph of Humility and Fierce Resolve’. Harvard Business Review, July–August. Available from https://hbr.org/2005/07/level-5-leadership-the-triumph-of-humility-and-fierce-resolve [3 November 2017]:

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An excellent article about their research into what catapults a company from merely good to truly great.

• Covey, S.R. (2004) The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change. Simon & Schuster, London:

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An excellent insight into the process of strategic thinking and what makes one person highly effective in their role.