Thinking Strategically

The business you lead is built on an idea. In the turbulence of daily work filled with product specifications, customer initiatives, board of director meetings, and hundreds of other items, it’s easy to lose sight of that idea. The idea started in someone’s mind, maybe even yours. Over the years, the idea transformed into offerings in the form of products, services, experiences, and so on that a group of potential customers found valuable and were willing to pay for. Cash flow, receivables, intellectual property, brands, careers—everything flows from the idea.

Numbed by the analgesic of activity, we lose our ability to generate ideas. Less than half of managers believe that they are highly effective at generating new ideas.34 The degeneration of one’s ability to think strategically and generate new insights limits both individual and organizational progress. In a 10-year study of leaders at 35 organizations, the primary problem attributed to a lack of success was strategic thinking. One of the participants commented: “Our senior executives tend to get carried away by details and lose their strategic perspective. It is a major challenge to get our decision makers to think in strategic rather than operational terms.”35 Just because someone has a senior- level title on their business card doesn’t automatically qualify them as an effective strategic thinker. Similarly, just because someone is a new entry-level manager, don’t assume they can’t contribute valuable insights that can potentially shape the organization’s strategies.

The lack of strategic thinking in the workplace runs counter to what employers are looking for in managers. Two separate studies on the abilities organizations most desire in their leaders both found that the number-one, most sought after skill is strategic thinking.36,37 With changes in the market, customer needs and the competitive landscape happening faster and faster, organizations seek managers that can quickly identify strategic insights and transform those insights into strategies that create differentiated value for customers. Managers that simply call out problems without thoughtfully providing a range of solutions are rapidly losing their luster. Their lack of effective contribution can no longer be hidden in organizations that have a reduced head count. My survey on strategic thinking knowledge with 1,160 managers shows an average score of 70 percent. On most grading scales, 70 percent is a C—. That certainly leaves significant room for improvement for those with the hunger to get better. Authors Michael Birshan and Jayanti Kar share their conclusion when they write, “We are entering the age of the strategist. Rare is the company, though, where all members of the top team have well-developed strategic muscles.”38

To help managers move from being purely tactical to more strategic, I introduced the three basic disciplines of strategic thinking in my previous book, Deep Dive: The Proven Method for Building Strategy, Focusing Your Resources, and Taking Smart Action. The three basic disciplines of strategic thinking are as follows:

  • 1. Acumen, which helps you generate key business insights
  • 2. Allocation, which focuses resources through trade-offs
  • 3. Action, which requires executing strategy to achieve goals

Using this simple framework, managers are equipped with a method to think strategically on a daily basis, not just annually during the strategic planning process. In practice, a manager could use these three disciplines in their daily interactions by asking questions like:

  • • What is my key insight from this meeting?
  • • Based on the strategy to achieve my goals, what are the trade-offs I need to make with my time, talent, and budget?
  • • Am I working on an activity that is important to execution of the strategy, or is it an urgent, but unimportant issue that’s taken me off plan?

The three basic disciplines of acumen, allocation, and action include dozens of practical strategic thinking tools and questions to help managers strategically guide their business. Through training tens of thousands of managers on this framework, it has been rewarding to see the average manager’s knowledge of strategic thinking increase by 30 percent within completion of the program. As these managers continued to hone the basic disciplines of strategic thinking and their responsibilities increased, the natural question for many was, “What’s next? How can I best prepare myself to excel as a senior leader and become an elite strategist?”

Real-world leaders echoed this need. Indra Nooyi, CEO of Pepsi said, “To me, the single most important skill needed for any CEO today is strategic acuity.”39 USA Today asked David Novak, CEO of Yum Brands, parent company of KFC, Pizza Hut, and Taco Bell, “What’s the key to being a successful global company?” He responded, “You need to be strategic.”40 And the Corporate Board of Directors Survey showed that the number-one trait of active CEOs that make them attractive board candidates is strategic expertise.41

Functional leaders in areas such as sales, marketing, finance, human resources, information technology, and operations bring great technical expertise to their roles. However, their technical expertise becomes an ante when they are given broader leadership responsibilities. Ascending to a general management position such as chief marketing officer, chief information officer, or chief learning officer now requires the ability to look at the business holistically. It demands trading in a functional perspective for a systemic one in which the leader can synthesize insights into tangible value for both internal and external customers. In an article entitled “The New Path to the C-Suite,” Harvard Business School professor Boris Groysberg presented his research findings on what is required of leaders to succeed at the highest levels of the organization. Professor Groysberg summarized the results by writing:

For the senior-most executives, functional and technical expertise has become less important than understanding business fundamentals and strategy. . . . One theme that ran through our findings was [that] the requirements for all the C-level jobs have shifted toward business acumen. To thrive as a C-level executive, an individual needs to be a good communicator, a collaborator, and a strategic thinker.42

I.2 The Three Disciplines of Advanced Strategic Thinking

Figure I.2 The Three Disciplines of Advanced Strategic Thinking

To enable managers to elevate their thinking to a level that allows them to see the foundational elements of the business from a higher, more holistic vantage point, I’ve developed a framework called the three disciplines of advanced strategic thinking (Figure I.2):

  • 1. Coalesce: Fusing together insights to create an innovative business model
  • 2. Compete: Creating a system of strategy to achieve competitive advantage
  • 3. Champion: Leading others to think and act strategically to execute strategy

The three disciplines of advanced strategic thinking provide leaders with new concepts to change mindsets and practical tools to enhance behaviors so that they are maximizing their strategic leadership potential. The fact that the framework elements are referred to as “disciplines” means that it takes time, effort, and commitment to master them. In our action-oriented world, where we’re electronically tethered to one another, investing time to think on a regular basis can be a challenge in itself. While it’s easy to be pulled into one more meeting that you really don’t need to be in and check e-mail for the 47th time today while meeting with others, this lack of discipline is going to chain you to mediocrity. The adrenaline rush that comes from scrambling to fight another urgent, but unimportant fire, is addicting and much more exciting than spending 30 quiet minutes thinking about the business. But, it’s these types of decisions that create your patterns of thinking and behavior. It’s the discipline, or lack of discipline, that can make or break your career and determine the success or failure of your business.

The “30,000 foot view” of the business is a common phrase used to describe getting to a high enough level to see the big picture. The next time you’re in a commercial airplane and cruising around 30,000 feet, take a look out the window and note what you see—some clouds, large swaths of land, maybe a mountain range. The reality is you’re too high up to see much of anything with any precision. Take a helicopter between 500 to 1,000 feet and you’ll be able to clearly recognize what you’re looking at, with the benefit of seeing it from a new, higher perspective. Buildings, homes, bridges, and roads are seen in a more revealing way because of the elevation, while important details are still clear to the eye. To reinforce your learning throughout the book, the end of each section will include a summary of the key points called the 1,000-Foot View.

So, buckle up and prepare to elevate your thinking.

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