The Role of Strategic Thinking in Business Planning
Traditionally, Strategic Planning omits the step of innovative thinking that is so critical to business success. Strategic Thinking is a more comprehensive planning model that covers innovation, strategic planning and operational planning.
Strategy has never been more challenging, or more important, than in today’s environment of global competition, in which, corporate strategies must transcend the borders of nations and markets. Too many organizations try to be everything to everyone, wasting resources in markets that may never provide a worthwhile return on investment.
What is Strategic Thinking?
Strategic Thinking is a planning process that applies innovation, strategic planning and operational planning to develop business strategies that have a greater chance for success.
More and more organizations are learning that past experience is not always the best basis for developing future strategies. Executives need to thoughtfully consider how to create value for customers. The exercise of strategic planning, while important, tends to answer the “how” and “when” of business planning and rarely captures the essence of what it means to think strategically. That’s where strategic thinking comes in. Strategic thinking is the “what:” and “why” of the planning process. It answers the question, “What should we be doing, and why?”
Strategic Thinking requires innovation and creativity and includes a research phase to examine the voice of the customer, the employee and industry best practices. It is a process of examining everything we do in our various roles, understanding the needs of our customers and ensuring that all of this is linked to clearly defined strategic imperatives.
If we compare strategic thinking with strategic planning and operational planning we see that:
- Strategic Thinking – is the “What” and the “Why”…that is what should we be doing and why.
- Strategic Planning – is the “How” and “When” …at a very high level.
- Operational Planning – is the specific details of the how and when.
Why is Strategic Thinking Important?
The purpose of Strategic Thinking is to create a strategy that is a coherent, unifying, integrative framework for decisions especially about direction of the business and resource utilization. To do it, Strategic Thinking uses internal and external data, qualitative synthesis of opinions and perceptions. It is conscious, explicit, and proactive and defines competitive domain for corporate strategic advantage.
Strategy is a key outcome of a relevant strategic thinking process. Tregoe and Zimmerman outlined the relationship between strategy and operations in their work on strategy, “Top Management Strategy: What It Is and How To Make It Work”.
The Strategic Thinking Process
Strategic Thinking is the combination of Innovation, Strategy Planning, and Operational Planning.
The process begins with Innovation. We try to create the ideal future and consider the plans needed to achieve them and to see them through. Innovation helps us to move outside our comfort zone into the possibilities of exceeding customer and organizational requirements and expectations.
Innovations are then articulated into a series of strategies. This is a part of the entire Strategic Planning process. However, in Strategic Thinking, we incorporate the needs of our customers, the organization and our staff in the process. We incorporate Benchmarking to ensure that industry best practices are included in our vision of the future.
Employee Involvement at each stage of the Strategic Thinking process is key to ensuring that they stay involved in the execution of the Operational plans. This is where Operational Planning comes to play. It is the process of taking the strategies (the outcomes of the Strategic Planning process) and developing them into action plans that are achievable and involve staff throughout the organization in ensuring that the needs of the customer and the organization are met.
The last part of Strategic Thinking is Measurement. There must be an on-going process of measuring the effectiveness of the plans and verifying that they are implemented as planned. Measurement is also used to benchmark the original needs against the implemented actions.
To successfully implement strategic change, initiated through the strategic thinking process, it is important for all levels of employees to fully incorporate the change in everything they do. We do this by identifying and establishing Values and Principles to ensure the organization is successful at achieving its strategic goals.
Senior managers and leaders in organizations have a responsibility to make the required time to undertake Strategic Thinking in their business planning. It won’t just happen-nor can it be done in a quick half-day meeting.
Without comprehensive Strategic Thinking the organization risks making quick decisions that lack the creativity and insights derived through a Strategic Thinking process. Executives may find out later that their organization is going in directions that they likely didn’t want it to go. This is not something that can be delegated away.
Strategic Thinking can be done for the organization as a whole and for each department or division within the organization. The goal is to out-think, out-plan and out-maneuver other forces or competitors. The notion of combat implies a central premise of competition in the pursuit of “fulfillment”.
Sun Tzu in his book, “The Art of War,” defines the peak efficiency of knowledge and strategy as being, to make conflict altogether unnecessary-to overcome other’s armies without fighting. Similarly, the role of the leader embodying the essential elements of Strategic Thinking is well described in this passage:
“A general must see alone and know alone, meaning that he must see what others do not see and know what others do not know. Seeing what others do not see is called brilliance, knowing what others do not know is called genius. Brilliant geniuses win first, meaning that they defend in such a way as to be unassailable and attack in such a way as to be irresistible.”