BOOK REVIEW: How to be a more effective strategic thinker

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HBR Guide to Thinking Strategically by Harvard Business Review

This collection of essays is a valuable guide for those in middle management and above. It answers the need for a guide to both how to be a more effective strategic thinker, or how to become a strategic thinker.

Much has been written about formulating strategy, but this is an event that once ended, left to be executed by strategic thinkers.

This is the first comprehensive book I have read on how to be that person, at any leadership level.

The authors describe strategic thinking as "analysing opportunities and problems from a broad perspective, and understanding the potential impact your actions might have on the future of your organisation, your team, or your bottom line".

The strategic genius, Professor Rumelt, titled his seminal book, Good Strategy, Bad Strategy, because he believes strategy is either one or the other. There is no other option. In similar vein, I have observed that people are either good strategic thinkers or bad strategic thinkers; there is no third category.

The bigger picture

Strategic thinking begins with going beyond your day-to-day activities and considering the larger environment in which you're operating. It starts with asking questions and challenging assumptions about how things operate in your company and industry. Based on strategic thinking, you can make daily decisions about how you and your team should be spending your time.

This is the only way you ensure that every choice you make, and every action you take, drives results that matter to the organisation. On even cursory reflection, this is an obvious requirement of every successful manager at every level.

Strategic thinking is not a natural way of thinking, rather it is a skill that is learned deliberately, or less often, by osmosis in an environment of strategic thinkers. 

Strategic thinking starts with an understanding of the company's strategy. At whatever level one operates, this is what one is employed to do. Period. If it is a good strategy, you will able to claim that you are partly responsible for its success. If it is a bad strategy, you will able to claim that you worked as effectively as you could to try and get the best out of a bad strategy.

William Schiemann reports that only 14% of organisations he surveyed claimed that their employees had a clear understanding of their company's strategy and direction, and that only 24% felt the strategy was linked to their individual accountabilities and capabilities.

High stakes, deep uncertainty

The characteristics of a strategic thinker have received attention in the leadership literature. However, this is "usually in isolation and seldom in the special context of high stakes and deep uncertainty that can make or break both companies and careers", the authors explain.

People who think strategically have specific personal traits, behaviors, and attitudes, the first of which is curiosity about – well, everything – what is going on in the company, in the industry, in the country, amongst competitors, and more.  And then they question whether they and their units are focused on the right things. Their focus is on the future and how the unit and company's operations may change in the coming months and years.

Consistency

To be a strategic leader, not just a strategic thinker, requires consistency. The objective that you pursue must be persistently pursued, but this must be combined with the agility to adapt approaches and shift ideas when new information is received.

A fundamental of strategic thinking is learning: the gathering of knowledge and information. This often complex, sometimes ambiguous body of data must be interpreted to get the insights you can use to make smart choices and select appropriate courses of action.

There are many ways to deal with this confusion, but the authors offer effective and easily applied approaches. These include: talking to your customers, suppliers, and other partners to understand their challenges; using simple scenarios to imagine various futures so you can prepare for the unexpected; looking at fast-growing rivals, and examining the actions they have taken that puzzle you. (For example, why did they have a sale early this year, but of fewer items that everyone else?)

You could use the "five whys" of Sakichi Toyoda (Toyota's founder). Why did this happen? And when you have an answer, ask a "why" on that answer, and so on – five times, to get to the heart of the matter.

Finland's former president J. K. Paasikivi was fond of saying that wisdom begins by recognising the facts and then "re-cognising," or rethinking them, to expose their hidden implications.

When analysing ambiguous data, the authors suggest, list at least three possible explanations for the data, and invite perspectives from others.

When you advance from strategic thinking, to the decision and action phase of being a strategic leader, insist on multiple options right at the beginning. Avoid getting prematurely locked into simplistic go/no-go choices of the Brexit variety. Reframe binary decisions by asking your colleagues, "What other options do we have?" And then make your decision based on the long term, not the short term.

As a strategic thinker, the recurring question that you must ask yourself is how your actions create value that can maximise your contribution to your organisation, and set you up for success. You will find this book is extraordinarily valuable. It has no 'breakthrough' new material; everything has been said more fully elsewhere before, but never as a concise guide, all in one place.

Readability                   Light -+--- Serious

Valuable Insights         Many --+-- Few

Practical application   High +---- Low

Ian Mann consults internationally on strategy and implementation and is the author of "Strategy That Works" and the "Executive Update". Views expressed are his own.

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