How often have you overheard a group talking about a leader and saying that he or she “just doesn’t get it”? Translation: That person isn’t being strategic. Worse, do people say that about you?
In a study by Harris Interactive of leaders from more than 150 U.S. companies, research showed that only 3 out of every 10 managers are strategic. Results from a strategic thinking assessment administered to more than 5,000 managers showed the average score for strategy skills is only 58 out of 100, or in school terms, an F. There’s a big difference between throwing around the word strategic in a meeting and actually understanding what it means.
Strategic thinking can be defined as the generation and application of business insights on a continual basis to achieve competitive advantage. Strategic thinking means using a holistic, long-range lens to view the business. It’s not about adding more work. It’s about enhancing the current view of the work and improving one’s ability to perform it.
To maximize resources and profitably grow the business on a consistent basis, three disciplines of thinking can be developed to continually ground a manager’s work in solid strategy:
1. Acumen: Experience without expertise means nothing. Just because someone has 40 years of experience breathing doesn’t necessarily mean they’re getting better at it. Unless we’re actively generating insights or learning about the business, we’re simply not taking full advantage of our experience. In many industries, 15 or 20 years of experience is merely the ante. What organizations are searching for today is acumen or insights, and the managers who can generate them on a consistent basis are few and far between.
The ability to come up with insights can be taught, just like learning to play the piano or swinging a golf club. There are more than 40 strategic thinking tools that can be used to generate insights. Using only one tool to think strategically, such as a SWOT analysis, is like playing 18 holes of golf at Pebble Beach Golf Links with only a putter.
Acumen question: What key insight is driving this initiative, project or activity?
2. Allocation: It’s one thing to have a neatly written strategy on paper, but an actual or realized organizational strategy is the result of the resource allocation decisions managers make each day. Therefore, it is critical to understand resource allocation and how to maximize its potential for the organization. In today’s market, multibillion-dollar companies go bankrupt on a regular basis. Having the most resources guarantees nothing; how they’re allocated is what truly matters. Thinking strategically requires the frameworks and tools to manage risk, make trade-offs and pull the trigger on decisions.
Allocation question: What activities, projects or tactics should be eliminated in order to more effectively focus resources?
3. Action: If organizational strategy has become an annual pilgrimage to an off-site meeting at the Holiday Inn to develop a plan that sits on the shelf for 10 months collecting dust, it’s time to transform strategy from an event to a daily dialogue. Equipping managers at all levels with the knowledge, skills and tools to act strategically is a solid first step. If everyone in the organization isn’t prepared to identify, communicate and act on insights regarding the market, customers and competitors, how much intellectual capital is being wasted because of a simple lack of awareness of business fundamentals? Have people write down their definitions of strategy, then collect and read them. It can be a sobering exercise. If you can find two that are the same, you’ve hit the business acumen jackpot.
Action question: What actions should I focus on to create competitive advantage?
Many organizations only address the first three levels of strategy: corporate, business unit and functional area. In reality, these are all subsets of the most important level of strategy: you. However, many directors and vice presidents have never learned to develop strategic thinking. By developing the three disciplines, you can elevate your thinking from tactical to strategic. In doing so, not only will you become more valuable to your organization — you’ll separate yourself and your business from the competition. Get it?
Rich Horwath is a strategist, professor, speaker and the author of Deep Dive: The Proven Method for Building Strategy, Focusing Your Resources and Taking Smart Action. He can be reached at firstname.lastname@example.org.Filed under: Strategy