In simple terms, the essential elements of strategic thinking revolve around your actions projecting yourself into the future so that you can identify and take advantage of new opportunities.
Strategic thinking is a structured method of acknowledging the past, and using the present to put the future firmly into strategic focus, none of which is necessarily easy to do.
In fact, research shows that 60% of organisation fail to invest into building strategic thinking skills within their teams, and more than 70% struggle with attracting strategic thinking leaders.[1]
However, if done well strategic thinking will spark new ideas and identify future opportunities that are the lifeblood of all future and long-term successes.
What is strategic thinking
In different areas of life, there are multiple definitions and uses for the term “strategic thinking”. Generally speaking the idea of strategic thinking is associated with logical reasoning that uses a process of going through a series of steps in order to reach a certain goal.
Identifying a goal doesn’t mean you need to find the perfect solution right away, but rather it means understanding a current situation and why things may not be as you want them to be. Often it is as much about what you need to avoid as it is about what you want to do.
It is important to remember that strategic thinking is an ongoing process. After identifying a problem you might have come up with a basic plan of action, but at the time when you’re putting your plan into action, things might have changed.
You should therefore be open to changes and consider revising your plan if necessary. Strategic thinking is not about locking-in a solution to any problem, but rather understanding how you can take advantage of opportunities that present themselves, or that you create, in order for you to achieve your goals.
Essential elements of strategic thinking
Strategic thinking is about having a vision and making decisions that are in alignment with your values. In general, it uses the following three essential elements:
- Defining your goals, or what you want to achieve, which includes looking for and finding new Opportunities
- Understanding where you’re starting from, which includes identifying both your Strengths and Weaknesses
- Deciding how best to get your desired future by assessing risks versus rewards, including identifying Threats
Combined, this forms the SWOT framework – Strengths, Weaknesses, Opportunities, and Threats – which is commonly used method for evaluating an organisation to assess which areas the organisation excels in or looks to exploit, as well as where they are not performing so well or where there are issues that need resolving.
However, the SWOT framework on its own is insufficient. You can, and unfortunately many people do SWOT analyses without being strategic, or without thinking.
There is much more to the process of strategic thinking, and a lot depends on having the right mindset including:
- An outward orientation that emphasises looking for new opportunities and creative problem solving
- Long-term focus for decision making that incorporates market conditions and emerging business trends
- A realistic yet ambitious story of challenging the past and embracing ambiguity in your present circumstances
- A pragmatic, structured and disciplined management system with strong analytical backing
- The ability to be laser-focused on executing your priorities with an openness and flexibility to emerging ideas
While a SWOT analysis done this way can be an extremely useful and powerful tool, by their nature entrepreneurs are faced with a great deal more uncertainty than established organisations who already have an existing track record for them to review, and intimate knowledge of their market from actively competing in that market.
Essential elements of strategic thinking for entrepreneurs
Where entrepreneurs differ from traditional management is in their mindset. Strategic thinking in new independent entrepreneurial ventures relies on a very different mindset to that used by corporate ventures and established companies:[2]
- Corporate ventures and established companies rely on formalised and analytical skills and are by and large driven by numbers
- Independent entrepreneurial ventures on the other hand use what we call the Strategic Entrepreneurial Mindset which is more informal and ad hoc, and uses improvisational talents and entrepreneurial intuitive thinking
- Intuitive thinking sometimes referred to as “going with your gut” involves following the impulses from your unconscious mind and is not based on the careful analysis usually done by your conscious and analytical mind.
Based on current literature there is ample evidence that intuition plays a powerful role in successful decision-making which is an integral part of strategic thinking.
However, there isn’t a lot of evidence whether intuition helps or hinders with detailed planning, making complex choices, or with time-sensitive decisions, which is more the role of the analytical mind or critical thinker.[3]
The benefits of strategic thinking
There are many benefits of strategic thinking which include:
- being able to think about future events that have yet to happen
- avoiding unpleasant situations by focusing on what needs to be done now- being a strategic thinker allows you to better understand your priorities and using your time more effectively and efficiently
- give yourself time and space for creative problem solving
In addition to these business-related benefits, there are many other, more personal benefits people can enjoy from strategic thinking, which in turn will improve their quality of life.
For example, by focusing on future events and getting excited by them, it allows you to ask “what if” type questions.
The benefit is being ready for obstacles that may lie ahead, you’re more in control and can avoid letting obstacles overwhelm you. All of this can have a positive effect on your well-being.
In addition, people who creative thinkers and planning includes some strategic management techniques are less likely to get stressed out because they know exactly what needs to be done in order for them not to lose sight of their goals.
Studies have shown that people with lower stress levels often have better decision-making abilities.[4]
How is strategic thinking different
Strategic thinking is not the same as critical thinking, tactical thinking, creative thinking or strategic planning and in the following 4 sections we’ll highlight the differences.
Critical vs strategic thinking
Strategic thinking is more future focused and critical thinking is the ability to dig beyond the surface of any information and analyse it in a logical way.
It helps in dealing with simplifying complexities, solving daily problems, making more informed decisions on real life situations.[5] Critical thinking is a self-learned and covers six essential skills:
- problem-solving
- analysis
- creative thinking
- interpretation
- evaluation
- reasoning
Strategic vs tactical thinking
Strategy is the overarching plan or set of goals you hope to achieve. Tactics are the specific actions or steps you take to implement that strategy.
The relationship between strategic thinking and tactical thinking is best explained using this powerful quote:
Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.[5]
Sun Tzu, 544 BC
Perhaps there was no greater leader and strategist than Sun Tzu, Chinese military general, strategist, philosopher, and writer who lived in the Eastern Zhou period of ancient China.
Sun Tzu is traditionally credited as the author of The Art of War and his philosophy on how to be a great leader has impacted many books on management, and life.
Strategic vs creative thinking
Creativity is the ability to produce something original and meaningful. It’s about having ideas that are both novel and useful. Andit’s not just for artists, musicians, or inventors—everyone has creative idea and creative potential.
Creative thinking means taking time away from your usual routines in order to brainstorm new ideas; you need to cultivate a sense of curiosity; you mustn’t let fear stop you from challenging conventional wisdom (or your own beliefs).
The main differences between creative thinking and strategic thinking revolve around these 5 main areas:
- Take your time vs Limit your time
- Dare to dream vs First things first
- Make sideways moves vs Take linear steps
- Focus on the big picture vs Grasp the details
- Create a unique solution vs Find the obvious solution
Strategic thinking vs strategic planning
Strategic thinking and strategic planning are like two sides of the same coin, and to succeed you need both. They differ according to their use of resources.
While strategic thinking is the process of setting goals and determining the direction you want to take, strategic planning is developing a blueprint for the work you will do against that direction.
Also, part of the planning process is allocating resources to make sure you will be able to meet your plans and goals.
Examples of strategic thinking
Strategic thinking can be used in a huge variety of circumstances, and below are a few examples:
- Goal-achievement, market penetration, product development, diversification or a branding strategy
- Interest-based collaborations between two or more organizations to work towards a common goal
- Personal development determining what you can do differently in order to achieve your goals more efficiently
- Other contexts include foreign policy, military strategy and sports, and the list goes on
Conclusion
The elements of strategic thinking are essential in strategic planning and are a key activity in all parts of life, but especially important in business.
It can be a time-consuming process, but the outcome will usually pay off in the end. Whether it’s your business or personal life, creative thinking skills and strategic planning can help you achieve more of what you want and less of what you don’t want.
Standard benefits include:
- You’ll be more prepared for the future
- You’ll know what to do in difficult situations
Emotional benefits include:
- Your stress will lessen because you have a plan of action
- You’ll feel confident about your decisions and actions, knowing that they’re backed by and open mind and strategic objectives so you can achieve your strategic goals.
If you need to know more be sure to read up about the strategic planning process and how to be better at your critical thinking skills so that we can save more time and get greater results in all that you do.
References
[1] Chief Executive, Six Key Elements of Strategic Thinking for CEOs
[2] Kelley School of Business, Indiana University, Entrepreneurship and strategic thinking in business ecosystems
[3] Society for the Advancement of Management, Implications of intuition for strategic thinking: practical recommendations for gut thinkers
[4] SciVerse Science Direct, Can decision-making skills affect responses to psychological stress in healthy women?
[5] Bartley Research, The Importance of Critical Thinking
[6] Forbes, Sun Tzu’s 31 Best Pieces Of Leadership Advice
Further Reading
14 Bad Habits of Entrepreneurial Leaders
What is the main reason why entrepreneurs experience daily stress
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