Recent strategic thought points ever more clearly towards the conclusion that the critical strategic question is not “What?” (usually addressed by conventional thinking[1]), but “Why?” (or “How?”[1]). The work of Mintzberg[2] and others who draw a distinction between strategic planning (defined as systematic programming of pre-identified strategies) and strategic thinking (a more integrated perspective on the organization) supports that conclusion.[3][4][5] Intensified exploration of strategy from new directions is now coming together in the concept of what is being called strategic thinking.[6] At this point, there is no generally accepted definition of the term, no common agreement as to its role or importance, and no standardized list of key competencies of strategic thinkers.[7] However, many agree that traditional models of strategy making (which are primarily based on strategic planning) are not working.[8]
Strategic thinking vs. strategic planning
In the view of F. Graetz, strategic thinking and planning are “distinct, but interrelated and complementary thought processes” that must sustain and support one another for effective strategic management. Graetz's model holds that the role of strategic thinking is "to seek innovation and imagine new and very different futures that may lead the company to redefine its core strategies and even its industry". Strategic planning's role is "to realize and to support strategies developed through the strategic thinking process and to integrate these back into the business".[4]
According to J. M. Liedtka, strategic thinking differs from strategic planning along the following dimensions of strategic management:[9]
| Strategic Thinking | Strategic Planning | |
|---|---|---|
| Vision of the Future | Only the shape of the future can be predicted. | A future that is predictable and specifiable in detail. |
| Strategic Formulation and Implementation | Formulation and implementation are interactive rather than sequential and discrete. | The roles of formulation and implementation can be neatly divided. |
| Managerial Role in Strategy Making | Lower-level managers have a voice in strategy-making, as well as greater latitude to respond opportunistically to developing conditions. | Senior executives obtain the needed information from lower-level managers, and then use it to create a plan which is, in turn, disseminated to managers for implementation. |
| Control | Relies on self-reference – a sense of strategic intent and purpose embedded in the minds of managers throughout the organization that guides their choices on a daily basis in a process that is often difficult to measure and monitor from above. | Asserts control through measurement systems, assuming that organizations can measure and monitor important variables both accurately and quickly. |
| Managerial Role in Implementation | All managers understand the larger system, the connection between their roles and the functioning of that system, as well as the interdependence between the various roles that comprise the system. | Lower-level managers need only know his or her own role well and can be expected to defend only his or her own turf. |
| Strategy Making | Sees strategy and change as inescapably linked and assumes that finding new strategic options and implementing them successfully is harder and more important than evaluating them. | The challenge of setting strategic direction is primarily analytic. |
| Process and Outcome | Sees the planning process itself as a critical value-adding element. | Focus is on the creation of the plan as the ultimate objective. |
Strategic thinking competencies
Liedtka observed five “major attributes of strategic thinking in practice” that resemble competencies.[9]
The first competency, a systems perspective, refers to being able to understand implications of strategic actions. "A strategic thinker has a mental model of the complete end-to-end system of value creation, his or her role within it, and an understanding of the competencies it contains."[9]
A second competency underlying strategic thinking is intent focused which means more determined and less distractible than rivals in the marketplace. Crediting Hamel and Prahalad with popularizing the concept, Liedtka describes strategic intent as "the focus that allows individuals within an organization to marshal and leverage their energy, to focus attention, to resist distraction, and to concentrate for as long as it takes to achieve a goal."[9]
Thinking in time means being able to hold past, present and future in mind at the same time to create better decision making and speed implementation. "Strategy is not driven by future intent alone. It is the gap between today’s reality and intent for the future that is critical."[9] Scenario planning is a practical application for incorporating "thinking in time" into strategy making.[10]
A fourth strategic thinking competency is being hypothesis driven, ensuring that both creative and critical thinking are incorporated into strategy making. This competency explicitly incorporates the scientific method into strategic thinking.[citation needed]
The final strategic thinking competency is intelligent opportunism, which means being responsive to good opportunities. "The dilemma involved in using a well-articulated strategy to channel organizational efforts effectively and efficiently must always be balanced against the risks of losing sight of alternative strategies better suited to a changing environment."[9]
References
- ^ a b Michael D. Taylor Systems Thinking in Project Management
- ^ Mintzberg, H. (1987), “Crafting Strategy”, Harvard Business Review, 65(4), 66-75.
- ^ Bonn, I. (2001), “Developing Strategic Thinking as a Core Competency”, Management Decision, 39(1), 63 - 76.
- ^ a b Graetz, F. (2002), “Strategic Thinking versus Strategic Planning: Towards Understanding the Complementarities”, Management Decision, 40(5/6), 456-462.
- ^ Liedtka, J. M. (1998), “Linking Strategic Thinking with Strategic Planning”, Strategy and Leadership, 26(4), 30-35.
- ^ Abraham, S. (2005), “Stretching Strategic Thinking,” Strategy & Leadership, 33(5), 5-12.
- ^ Hussey, D. (2001), “Creative Strategic Thinking and the Analytical Process: Critical Factors for Strategic Success”, Strategic Change, 10(4), 201-213.
- ^ Chussil, M. (2005), “With All This Intelligence, Why Don’t We Have Better Strategies?”, Journal of Business Strategy, 26(1), 26-33.
- ^ a b c d e f Liedtka, J.M. (1998), “Linking Strategic Thinking with Strategic Planning”, Strategy and Leadership, 26(4), 30-35.
- ^ Schoemaker, P.J.H. (1995), “Scenario Planning: A Tool for Strategic Thinking”, Sloan Management Review, 36(2), 25-40.