If you want to improve your business, begin by improving yourself. If a business is doing more, it is generally because the leaders improved. The same holds if a business is stagnant or declining. One of the reasons a leader’s performance may continue to dwindle is due to a lack of development. Professors Cossin and Metayer write, “In a world where business models are evolving rapidly and new competitors can emerge almost overnight, strategic thinking-especially at the top of the company--is more important than ever to a company’s survival.”
Research by authors Carroll and Mui featured in the Harvard Business Review article titled Seven ways to fail big, underscore the importance of strategic thinking at the organizational level as well. The authors studied 750 bankruptcies of companies with at least $500 million in assets in the last quarter before bankruptcy from 1981 – 2005. Results showed that the main cause of bankruptcy in nearly half of the cases was a bad strategy. In most instances, the avoidable situations resulted from poor initial strategies not incompetent execution. If the leaders at the various levels of your organization cannot think strategically today, you may not have a business tomorrow.
In business, resources consist of time people and money. Strategic thinking is how effectively these resources are used, relative to the competition in serving customers. Strategic thinking aims to maximize your resources and profitably grow the business on a consistent basis. Strategic thinking is the generation of business insights on a continual basis to achieve competitive advantage. Strategic thinking is different from strategic planning. Strategic planning is the channeling of business insights into an action plan to achieve goals and objectives. Strategic management is a collection of ongoing activities and processes that organizations use to systematically coordinate and align resources and actions with mission, vision, and strategy throughout an organization.
The fact is most managers are now required to be more successful with fewer resources. Therefore, technically, all managers are strategists. To hone in on one’s ability to think strategically there are frameworks that will help better understand how to think strategically. Some of the notable strategic thinking frameworks are 5 Phases of Critical Thinking, 6 Phases of Strategic Thinking Process, The Deep Dive strategic thinking framework. We will discuss these in detail in the subsequent article to come.
What then stops people from thinking strategically? Most people simply do not have enough time to get things done and in many cases, the organization does not support people taking time out to think. The problem is, people are so rushed doing things, often doing the wrong things, things that simply do not make a real difference to the business. Research from the Economist Intelligence Unit shows that on average, 80% of senior management’s time is spent on issues that account for less than 20% of an organisation’s long-term value.
We are operating in a very volatile environment, one that does not inspire or protect business. Strategic thinking could be the differentiator between those organisations who will stand the test of time and those who will not.
Jerry Ndemera is a consultant at Industrial Psychology Consultants. You can reach him at [email protected] or call 0242 481946-8.
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