Strategic thinking is an individual activity that is a style of thinking. It is not an organizational process or activity for the basic reason that people do not share the same brain.
Many writers use the phrase strategic planning to describe the organizational process of setting strategy. One style of strategic planning is adaptive, starting with scanning the external environment. For example, a firm may notice a trend in its customers or in government policy that opens new market opportunities. The strategic planning process then moves into developing responses, and those responses often constitute the “strategy.”
Another style of strategic planning is a straight-forward planning exercise to achieve a pre-determined goal. Here the emphasis is more on the word plan, with the adjective “strategic” suggesting that it is an “important plan.”
Strategic thinking and strategic planning are similar in that:
- Both deal with strategic intent and strategy
- Both involve collecting and logically-processing information
Strategic planning receives much criticism. In many organizations, strategic planning has become highly structured; a groan-inducing set of templates that yield an artifact called the “strategic plan.” Often the reason for that is that strategy becomes tied to budgeting, and the words that comprise the “strategy” becomes the documented rationale for the proposed budget. In too many organizations, strategic planning exists solely as an annually-repeating bureaucratic process of creating artifacts, discussing them, and filing things away.
This bureaucratic approach is further magnified by use of pre-structured templates. A common response to the templates is that practitioners skip the analysis by writing down the first thing that comes to their mind. Analysis is mentally exhausting and they are busy, and no one really notices what they write.
Yet, strategic planning is also supported and lauded. It certainly receives important resources.
Strategic planning can be done well or it can be done poorly. Strategic thinking can be done well or it can be done poorly. We don’t need to replace strategic planning with strategic thinking, we need to focus on the unique value adds of each.
I have a modest proposal: mix the advantages of strategic thinking
with the advantages of strategic planning to maximize the contributions of both.
How Strategic Thinking Improves Strategic Planning
Strategic thinking is the source of insights. Insights are important design elements in strategy formulation. Consider how these insights are generated and applied:
- Strategic thinkers imagine the “what ifs” and the future state. They contrast the desired future with the current state. This information can is often captured (recorded) in strategic artifacts as situational analysis and vision statements.
- Strategic thinkers often generate imaginative and creative problem solutions. The solutions would probably be recorded in the documents as strategies, or guiding policies.
- Strategic thinking is opportunistic, and SWOT-type analysis includes capturing and recording opportunities.
How Strategic Planning Improves Strategic Thinking
Experience with strategic planning can foster an individual’s competence in strategic thinking. Participation in the process of strategic planning processes forces individuals out of their comfort zone into their learning zone. Here are a few of the benefits:
- They learn to recognize and tolerate ambiguity and abstraction
- They learn that while processes reduce ambiguity, processes the status quo; this anchoring on the status quo can cause the organization to be slow to respond to threats or opportunities
- They learn that there is seldom one right practice or vision
- The learn to ask better questions
- They learn some of the specialized jargon, and can better communicate with others about concepts associated with strategy
I saw the value when I worked with volunteer leaders of a Project Management Institute (PMI) component group. PMI Headquarters required strategic plans and measures. These volunteer leaders were primarily trained in science or engineering and were accustomed to being provided a “scope” to which the would develop execution plans. They thought of planning as an exercise create documents that answered explicit questions.
Strategy is ambiguous and working with ambiguity put the people out of their comfort zone. They struggled (and complained) but they learned.
In the post-activity lessons learned, the participants felt that they had matured some as strategic thinkers. Here are a few representative comments:
- “I learned to look for data, and not make assumptions when I had little data to support my hunch”
- “I started to ask some of the same questions about my own organization’s strategic position”
- “I became much more focused on our customers, and how we create value for them; If we can’t develop a good value proposition, we won’t succeed”
- “I feel much more comfortable with the ambiguity that characterizes strategic situations”
Manage the Interface Between Strategic Thinking and Strategic Planning
Because organizations are social entities that must act collectively, individuals often (and should) share their information and insights with others. Here are some suggestions:
- Encourage individuals to reflect and think strategically, with the purpose of developing relevant and meaningful insights. Allocate time and encourage people to work individually, at least for a while. Strategic thinking is a somewhat solitary and reflective activity.
- Discourage the sole reliance on formal written documents and templates.
- Encourage people to have conversations where they share insights with each other.
- Encourage people at all levels of the organization to participate in contributing to strategy.
Do you agree that strategic thinking and strategic planning are complementary?
3 thoughts on “How to Improve Strategic Planning with Strategic Thinking (and vice versa)”
[…] about “interestingness” is one that a curious person would ask. Because they are curious, strategic thinkers add a lot of value to the strategic planning process. Instead of approaching strategy with a checklist mentality of completing each prescribed step […]
is it possible for strategic plans to stimulate strategic thinking among the rank and file in the organization?
Yes. I’ll give you an even stronger answer: organizations should encourage the rank and file to practice strategic thinking. Essentially, empowerment is the act of decentralizing strategic thinking. Now, I’m not saying that there should be unbounded craziness (I think many top managers fear chaos); whatever is done at the lower level should be aligned to those problems and issues felt to be important at the higher levels. Too, the ideas and suggestions generated at the lower levels should bubble up and inform higher-level strategy. In fact, we often see the opportunities in ‘weak signals’ and the people who see those weak signals first are those who are out closest to the customer and to the technology.
Thanks for asking!