Strategic thinking involves thinking about the future in a purposeful kind of way; that is, to generate useful insights that guide present-day choices. Presently, data analytics and statistical forecasting is popular, but I want to focus on generating insights, which usually come to the individual subconsciously.
Christopher Columbus: Strategic Thinker
Let’s imagine ourselves shadowing Christopher Columbus prior to 1492. As a naturally curious person, he gained knowledge for winds and currents and seamanship from his experiences sailing the Mediterranean, North Atlantic, and West Africa. He read many books on astronomy, geography, and history and made hundreds of marginal notations in them. He collected and interpreted data in the light of his personal ambitions.
History tell us little about Columbus’s reasoning. Regardless of the historical record, at some point in time Columbus developed the insight that he could use the Easterlies (trade winds off the coast of Africa that move from East to West) to sail westward, and then return to Europe via the Westerlies.
Christopher Columbus was a strategic thinker who took an abstract and unproven idea and proved it was true.
Andy Grove’s Strategic Decision
Consider Intel chairman Andy Grove’s story of how he came up with an important business strategy. Attending a management seminar, Grove heard the story of how fledgling “mini-mills” in the steel industry began in the 1970s to offer a low-end product—inexpensive concrete-reinforcing bars known as rebar that subsequently gave them the entry to dominate the industry once dominated by integrated steel makers like U.S. Steel. Grove saw that Intel was sitting in a similar situation: its dominance of its industry could be disrupted by allowing niche players in its industry to take the low-end part of the market.
“If we lose the low end today,” Grove realized, “we could lose the high end tomorrow.” At Groves’ insistence, Intel redoubled its efforts to develop and market the low-end “Celeron processor” for the emerging personal computer market.
Openness to Fringe Data and Dissent
Grove had an abundance of data from Intel about its production, its production plans, market demand, and profitability of Intel’s various product lines. He and his team easily could have used that data to frame its strategic plans. Indeed, that is very common for strategy setting by most firms.
Grove used analogy in his reasoning process: How is “A” like “B?” or “How are chips like steel?” One answer is that they are similar in that both have low-margin commodity-like grades and high-value engineered grades.
The insight is particularly remarkable in that Grove considered data from outside his industry.
Indeed, I meet many managers who say something like “Our industry is unique” when in reality there are more commonalities than differences. The statement, “we’re unique” establishes an excuse for close-mindedness and learning. They fall into a trap of where their belief system causes them to filter out contradictory information.
The openness to new ideas – from anywhere – reveals new explanations and possibilities. Strategic thinking incorporates much of the characteristics of creative thinking; for example, both make considerable use analogies.
Strategic thinking is different because of its emphasis on the future and on success, particularly in the crafting of strategies that give the strategist an advantage over others.
Insights – Start With These Four Questions
In my experience, insights come from posing and answering questions.
When thinking about the future, it is useful to consider the answers to these four questions:
- What data and evidence about the past, present, and future do I choose to consider (and to ignore)?
- What seems to be happening?
- What is really happening?
- What might happen?
Strategists employ strategic thinking to generate about the future, but taking the context of the present and the past into consideration. How can you use strategic foresight to enhance your strategic thinking capability?
- Three Strategic Thinking Characteristics (strategicthinkingcoach.wordpress.com)