Strategic Thinking: What It Is and Why You Need It

Obstacles can be overcome through strategy and learning.

—Hidetaka Miyazaki

If you’re like me, for the past year you’ve focused on keeping your head above water and putting out fires. We’ve had to figure out how to set up employees to work from home (and be productive), how to be productive ourselves, how to maintain engagement in video calls, how to adjust management styles to motivate offsite employees—in short, how to respond to a sudden and unexpected shutdown and then navigate that ensuing uncertainty for a year.

Now that the world is starting to return to normal and everyone can begin to shift out of crisis mode, it’s time to start paying attention again to more than just what’s right in front of you. Tactical thinking got you through the past year, but you need strategic thinking to survive (and thrive!) in the long term.

Defining Strategic Thinking

Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different. —Michael Porter

First, some definitions: “A strategy is a plan (and method) used to achieve a desired future state for the company. Tactics are the activities that take place to achieve the strategy, allowing the strategic plan to progress from milestone to milestone.”

Both are important to the success of any organization. During the pandemic, for example, strategy (which is usually long

term) usually took a backseat to tactics (which are usually short term) as companies focused on

surviving a very difficult period and coming out on the other side of it as healthy and intact as possible.

To better understand the distinction between tactical and strategic approaches, consider the example of an HR department.

• From a tactical perspective, HR is tasked with handling matters involving employment and benefit rules and compliance. In support of this tactical mission, HR’s responsibilities can include (but certainly aren’t limited to) processing forms for new hires, handling payroll, overseeing compliance notices and rules for employment, managing benefits, directing recruitment and hiring, and writing job descriptions.
• From a strategic perspective, HR’s focus should shift to projects that are future-oriented including building talent pipelines of high-quality job candidates (before they are needed), managing employee training and certification pathways, improving employee productivity, developing talent-retention programs, and planning for employee and leadership succession.

Keep in mind, though, that strategic thinking and strategic planning are two different things:

Strategic thinking is the generation and application of business insights on a continual basis to achieve competitive advantage.

Strategic planning then takes the insights generated through strategic thinking and channels them into an action plan designed to meet the goals and objectives.

Another big difference between the two concepts is that “strategic thinking . . . occurs on a regular basis, as part of our daily activities, while [strategic planning] occurs periodically (quarterly, semi-annually or annually).”

Strategic planning gets more of the limelight. (Think about how often a company’s “new strategic plan” is launched amid great fanfare as the culmination of a highly publicized months-long process.) But strategic thinking has perhaps even more potential to carry you—and your organization—to success.

In order to become a stronger strategic thinker, you first need to know what characteristics strategic thinkers share. Strategic thinking doesn’t just happen—you have to cultivate it. And before you can do that, you must develop the mindset and skills that make strategic thinking possible.

Elements of Strategic Thinking

I believe that people make their own luck by great preparation and good strategy.

—Jack Canfield

If you search for “characteristics of strategic thinkers” or “how to think strategically” or something along those lines, you’ll find a lot of lists that overlap significantly with each other. There’s a good reason for that: aside from a few differences here and there, there’s a core set of attributes that have demonstrated their influence in shaping strategic thinking across industries and over many years.

Based on my own experiences (which includes decades as a high-level executive in the corporate world and my work as a consultant and trainer to top companies throughout the world), I’ve compiled the following list, which includes the most commonly cited elements of strategic thinking. If you want to develop your own strategic thinking, the first thing you need to do is see where you stand on the spectrum of conventional thinker versus strategic thinker.

Forward thinking

Strategic thinkers anticipate future goals to keep the organization (or department)on the forefront of their industry, then figure out how to get there. They anticipate and embrace change that arises en route to that goal. Conventional thinkers, on the other hand, are reactive, and the big problem with that approach is that when you take action only when issues become problems, you’re spending all of your time focused on putting out fires—and not enough time thinking about and making choices that put you on the pathway to your desired future.

Eager for input

Strategic thinkers are interested in what’s going on throughout their departments, their organizations, their industries, and the business world in general. Gathering business-relevant information and perspectives from a broad array of sources helps them expand their view beyond just day-to-day matters. Conventional thinkers, however, typically don’t welcome others’ input, don’t understand others’ goals and objectives and are insular in their day-to-day thinking.

Focused on the long term

Strategic thinkers are willing to invest time and effort today in order to gain a better outcome tomorrow, whereas their conventional counterparts often fail to consider an action’s potential impact on long-term goals. Remember, the decisions we make—and don’t make—today affect our future opportunities. (And tomorrow is just around the corner: for example, the workforce of 2030 will be here before you know it!)

Willing to take risks

Strategic thinkers don’t limit themselves to their past or current thinking but are open to trying new methods. In comparison, conventional thinkers tend to be overly cautious, fear change, and are wary of challenging the status quo. If you want to make progress, you need to move forward—even if you don’t know exactly where the path goes.

Adept at prioritizing their time

Strategic thinkers don’t equate being busy with being effective. They place a high value on projects with the potential for great impact and high return. Conventional thinkers aren’t as discerning, though, and often treat all tasks equally, without regard to impact (even busy work such as email). The thing is, we all have finite time, attention, and other resources to devote to our projects. To get the most bang for your buck, it’s critical to understand how to identify and focus on what is most important to you organization.

Nimble

Strategic thinkers adapt and modify their approaches when they encounter changes that are anticipated, unexpected, or unwelcome (or all three). Conventional thinkers are marked by inflexibility that often makes them unwilling or unable to alter their plans even when adjustments could yield a better return. If you look at today’s most successful companies, chances are you’ll spot in their leadership roles people who are skilled at navigating whatever comes their way, whether it’s technological innovation or market shifts—or even a pandemic.

Committed to lifelong learning

Strategic thinkers proactively seek knowledge and are willing to teach others as well as learn from others. Conventional thinkers, on the other hand, feel most comfortable with what they know and tend to be closed to learning new things. Lifelong learners never take their success or knowledge for granted; indeed, the one thing they know for sure is that they don’t know everything (or enough), so they keep learning. At the same time, though, strategic thinkers understand not to cross the line between gathering the data needed to make informed decisions and focusing on the data so much that the decisions never actually get made.

Creative

Strategic thinkers consider unorthodox ideas from anyone and everyone, whereas conventional thinkers prefer to stick to previously trod paths. Although creativity can lead to big “aha!” moments and significant breakthroughs, it can also spur innovations that influence both daily activities and long-term planning. When talking about creativity, it’s hard not to reach for the frequently used—and very accurate—phrase “thinking outside the box.” Creative people have an ability to expand their perspectives by considering information in new ways and in new contexts.

Now What?

I’ve seen firsthand how effective good strategic thinking can be—and how keenly its absence is felt. Believe me, this is an ability you want (and need) to develop if you want to keep moving up. Now that you know what strategic thinking is, stay tuned for my next post, which will explain how to get better at it!