The purpose of strategic thinking is to produce insights
A person’s realization of “the true nature of a thing” and/or its relationship to some contextual factor.
Examples of Strategic Insights
The discovery and application of insights is central to strategy. The process of thinking strategically is purposeful in that the strategist intends to create advantage in the future. A few examples of strategic business insights are:
- A marketeer’s realization that a customer need is not being met adequately by existing products or functions
- An employee’s realization that an impending piece of regulation or legislation will fundamentally alter the industry.
- An auditor’s realization that a pattern of transactions show fraud
- An engineer’s realization that they have created a novel invention
Strategic insights are those insights that are useful for developing organizational strategy.
Three Kinds of Insights Needed for Business Strategy
In the context of organizational strategy, the strategist is searching for three kinds of insight. They are:
- Insights about the current situation. What are the problems and opportunities? What are stakeholder aspirations and motivations?
- Insights about the future. What will be different, and what is preferred? Since choice of customers tends to be one of the most strategic decisions, what customers might be best to serve?
- Insights about how to bridge the gap between present and future. These insights involve problem solving: taking into account a full range of constraints: competitive response, political will, resources, and organization.
Insights are a Neurological Flash
Research into the functions of the brain reveal the right hemisphere a region (more specifically in the right hippocampus) is the location responsible for insights involving verbal information. As neuroscientists continue mapping the brain, we are sure to get a better understanding of those mechanisms responsible for the practice of thinking strategically.
How to Generate Insights: Balance Thinking Hard with Detachment
Individuals have their own style of doing things. Research has not shown one best practice for generating insights. Rather than give you a cookbook, let me encourage you to apply some energy to each of these five activities. Be patient, and insights will emerge!
- Preparation – identifying issues, collecting and categorizing information, assembling resources
- Analysis – actively looking for relationships and patterns in data. Continually asking questions and reframing to find new perspectives. Searching for what is interesting. Validation and hypothesis testing.
- Detachment – Getting away from the issues and allowing the subconscious to work on the issues.
- Articulation – Explaining the crux of the situation to others. Trial and error solutions.
- Refinement and iteration – Returning to earlier activities.
Strategic Insights Are Those That Are Relevant and Meaningful
Earlier in this article, I defined insight as A person’s realization of “the true nature of a thing” and/or its relationship to some contextual factor. I close out this article with exploring the final part of the definition, the “relationship to some contextual factor.”
When people hear the word “insight” they typically assume that it must be a brilliant new observation: an epiphany. However, I find that kind of “aha” to be rare. Instead of brilliance, I keep it simple by testing it with this criteria of relevance and meaningfulness. Here’s a useful question:
Is the insight relevant and meaningful?
A relevant insight is one that is connected to current situation, future, and the bridge between the two (these were mentioned earlier in this article). Ideally, this creates some sense of alignment.
A meaningful insight is one that makes sense in a narrative. Here, I imagine myself in the future explaining how I created a successful strategy. If find that as I grapple with expressing the insight, I get a better sense of its worth and its motivational power.
Finally, a “contextual factor” is something that is external to the organization. Examples include technological change, the economy, a social trend, etc. For example, Absolute Vodka had data that its products were purchased for drinking at home parties. But, why? It turns out that many people buy a particular brand of spirits because that they connect it to a personal anecdote; telling that anecdote to others is a way to be humorous or to relate an adventure. This insight gives the company a foundation for creating marketing and product development strategies.
Implications for Organizational Process
Because organizations do not share a single brain, strategic thinking can only be a capability of individuals. This has important implications for the process of strategy. Most importantly, a good strategy development processes should allow time for individual research, analysis, and reflection. Individuals acquire insights through conscious analysis mixed with unconscious (intuitive) cognition.
It is has been said that genius is 1% inspiration and 99% perspiration. Doesn’t it make sense that the perspiration is the act of thinking strategically to produce the insights?
- Tip: Strategic Thinkers Look for “What’s Interesting” (strategicthinkingcoach.wordpress.com)