As the saying goes, “Hope is not a strategy!” To achieve results in today's rapidly changing marketplace, project managers must dig out of the day-to-day minutia and break free from the conventional ways of how “we've always done it” to spend more time strategically thinking and leading project teams into the future. Strategic thinking is an intentional process easily lost amid the pressures of operational decision-making and tactical leadership. This paper helps project managers step back from the trees to see the forest and lays the foundation for better strategic thinking within project teams, departments, and overall organizations through changing focus from day-to-day issue management to a long-term, strategic perspective. Very few professionals, regardless of title, identify themselves as strategic thinkers so recommendations to encourage more strategic thought and corresponding action are presented in this paper. The influence of habit, especially negative thinking, on the ability to think strategically is explored and the relationship between competitive advantage and strategy is highlighted.
What is Strategic Thinking?
The speed at which information is communicated today leaves little time to take informed action. So it is not a stretch of the imagination to recognize how infrequently organizations reserve time for strategic thinking. Strategic thinking is an intentional process easily lost amid the pressures of operational decision-making and tactical leadership.
“Strategic thinking focuses on finding and developing unique opportunities to create value by enabling a provocative and creative dialogue among people who can affect a company's direction. Strategic thinking is a way of understanding the fundamental drivers of a business and rigorously challenging conventional thinking about them, in conversation with others” (CFAR, 2001, ¶1). In layman's terms, strategic thinking is a process used to broaden an individual's perspective to achieve innovation, competitive edge or more successful outcomes. Project managers are positioned within an organization to promote strategic thinking from all levels rather than the traditional top-down model most often employed in strategic planning.
The case must be made for the importance of strategic thinking however, because in the fast-moving competitive environments in which most businesses operate, there is often confusion regarding how to go about successfully integrating strategic thinking into the company culture. Executive leadership typically dictates a strategic plan (often created in the “ivory tower”) and subsequently we find that those decisions get initiated and approved by the same person. This regularly translates to poor financial results. However, the financial success and speed of execution of projects drastically increases when executives encourage strategic thinking as part of the decision making process. Unfortunately, self-survey results indicate that most employees score below average on the competencies necessary for strategic thinking. So how do organizations and project managers in particular develop these skills that are critical to success?
First, there must be a clear understanding of the differences between strategic planning, strategic thinking, and problem solving. Strategic planning and problem solving both play important roles in the annual and day-to-day operations of an organization, but both activities have limitations with regard to the scope of the process and resources involved. The inclusion of strategic thinking into an organization's process and culture can strengthen the strategic plan and can address situations that typically require the need for “reactionary” problem solving.
|Strategic Planning||Strategic Thinking||Problem Solving|
|Once a year activity||Day-to-day mindset||Proactive||Reactive|
|Tendency to focus on the year at hand||Long-term impacts and results||Fire prevention||Fire fighting|
|Structured planning process directed by senior executives||Individual and/or collective competency that can occur throughout an organization||Forward focus||Backward focus|
|May include discussion about innovation but often linked too closely to budgeting||Focused on innovation and improvement||Creates new value||Only stops the bleeding|
|Usually What vs. How||Usually How vs. What||Broader in nature, big picture||Isolated impact, narrow perspective|
|Looking around the corner…or moving the corner||Trying not to run into the corner|
Making a Strategic Thinker
As evidenced by statistics that indicate 4-7% of leaders are considered skilled at strategic thinking, it is competency that most individuals have to learn (CCL, 2011). Developing strategic thinking skills requires dedication to the science of analysis and the art of creative thought. The process of “making” a strategic thinker utilizes multiple approaches.
Complete immersion is the proven method for quickly learning a new language. It is also one of the best ways to approach solutions to complex business environments. The critical factor in immersion is dedicated time as people tend to need significant “soak time” in order to build powerful mental models. Studies show that...
While immersion may be the most expedient method for building strategic thinking skills, it is least likely to be a feasible option for most organizations or individuals. Project managers typically don't walk into companies that have a culture that constantly and consistently provide the time for strategic thinking activities. Balancing multiple projects with competing priorities typically does not yield the capacity for these endeavors. Therefore, most individuals seeking to develop or enhance their strategic thinking skills use a combination of techniques.
As with most arts, one of the best ways to learn to think strategically is to work closely with masters in apprenticeship-like relationships. These individuals might not know they are, or consider themselves to be, strategic thinking experts but having discussions with them before, during and after situations requiring strategic thought provide low-risk environments in which novices can observe and learn from the work of masters and so absorb their ways of thinking.
Practicing scenario based decision-making provide a “manageably complex” environment within which people can safely experiment and gain insight into cause-effect relationships by analyzing what-if scenarios. Unlike the real world where decisions carry more risk and an air of finality, individuals also can “wind things back” and try again in scenarios if they don't work the first time.
The development of strategic thinking can be accelerated by exposure to a diverse range of realistic “cases” and the subsequent reflection on the experiences contained within to absorb the lessons. Research suggests that this sort of exposure to distillations of reality is particularly powerful when it involves comparisons of cases that are similar but involve a few key distinctions that drive significant differences in outcomes.
Similar to Cognitive Behavioral Therapy used in modern psychology, Cognitive Reshaping uses mental exercises to create new habits of mind. One example is the “go to the balcony” exercise proposed by William Ury in his negotiation book, Getting Past No, in which he advises to periodically take a step back and “go to the balcony” in order to get perspective on what is happening and why, and adjust strategies accordingly (Ury, 1993). The exercise is designed to develop the ability to move across levels of abstraction. Another example is the “architect's exercise,” in which any time an individual enters a new home or office space, they are encouraged to take the time to think about how they would change the space to make it a more attractive place in which to live or work. This exercise is particularly helpful in developing visioning ability.
Finally, setting S.M.A2.R2.T. goals can give project managers context from an individual perspective and assists with developing the global view necessary for effective strategic thinking.
Specific – Goals must be clear and well defined. Vague or generalized goals are not good because they do not provide sufficient direction. Goals whether personal or organization-wide need to show a demarcated path to success.
Measurable – Include precise amounts, dates, etc., in goals so they can be measured for the degree of success. Without a way to measure success, it is easy to miss the opportunity for celebration when something is actually achieved.
Attainable/Actionable – Make sure it's possible to achieve the goals that are set. Setting a goal that cannot be achieved will demoralize and erode confidence. However, it is equally important to resist the urge to set goals that are too easy. The set goals should force a call to action, thereby encouraging movement towards the desired outcome.
Relevant/Realistic – Goals should be relevant to the direction an individual wants their life to go or a company wants the organization to move towards. Keeping goals aligned in this manner will develop the focus necessary to translate strategic thinking into a more fully realized strategic plan.
This exercise is best approached initially from a straightforward, personal scale. For example, set a personal goal to prepare healthy dinners under 500 calories twice a week for a month. This goal avoids vagueness and allows for practical application of a process that is critical to the regular practice of strategic thinking.
As these activities adapt the thinking process, corresponding action must be taken to advance the desired strategy. Without activity, good ideas are quickly abandoned and the common misperception that strategic thinking is not a productive endeavor pervades. Developing strategic thinkers need to challenge the “look busy” mindset and instead pair the thinking process with targeted actions. In the article 6 Habits of True Strategic Thinkers, Paul Schoemaker provides the following list for individuals and organizations who want to be strategic (INC, 2012, ¶6-11).
Anticipate – Focus at most companies is on what's directly ahead. Leaders lack “peripheral vision.” This can leave your company vulnerable to rivals who detect and act on ambiguous signals. To anticipate well, you must:
- Look for game-changing information at the periphery of your industry
- Search beyond the current boundaries of your business
- Build wide external networks to help you scan the horizon better
Think Critically – “Conventional wisdom” opens you to fewer raised eyebrows and second guessing. But if you swallow every management fad, herd-like belief, and safe opinion at face value, your company loses all competitive advantage. Critical thinkers question everything. To master this skill you must force yourself to:
- Reframe problems to get to the bottom of things, in terms of root causes
- Challenge current beliefs and mindsets, including your own
- Uncover hypocrisy, manipulation, and bias in organizational decisions
Interpret – Ambiguity is unsettling. Faced with it, the temptation is to reach for a fast (and potentially wrong) solution. A good strategic leader holds steady, synthesizing information from many sources before developing a viewpoint. To perform well in this area, you have to:
- Seek patterns in multiple sources of data
- Encourage others to do the same
- Question prevailing assumptions and test multiple hypotheses simultaneously
Decide – Many leaders fall prey to “analysis paralysis.” You have to develop processes and enforce them, so that you arrive at a “good enough” position. To consistently excel, you have to:
- Carefully frame the decision to get to the crux of the matter
- Balance speed, rigor, quality and agility. Leave perfection to higher powers
- Take a stand even with incomplete information and amid diverse views
Align – Total consensus is rare. A strategic leader must foster open dialogue, build trust and engage key stakeholders, especially when views diverge. To pull that off, you need to:
- Understand what drives other people's agendas, including what remains hidden
- Bring tough issues to the surface, even when it's uncomfortable
- Assess risk tolerance and follow through to build the necessary support
Learn – As your company grows, honest feedback is harder and harder to come by. You have to do what you can to keep it coming. This is crucial because success and failure—especially failure—are valuable sources of organizational learning. Here's what you need to do:
- Encourage and exemplify honest, rigorous debriefs to extract lessons
- Shift course quickly if you realize you're off track
- Celebrate both success and (well-intentioned) failures that provide insight
Competitive advantage is part of the foundation of strategic thinking. For the enterprise, strategic thinking is the process of continuously redefining its objectives in the context of creating and maintaining competitive advantage.
- Focus – The primary focus is serving just a few market segments. These market segments are distinct groups with specialized needs. Companies pursuing a focus strategy can also either be cost leader or differentiator, but typically try to gain competitive advantage through innovation and brand marketing. Example: Rolls Royce, Aston Martin
- Cost leadership – The objective is to have the lowest costs of operation in an industry. Cost leadership exploits economies of scale and produces a highly standardized product. Examples: McDonalds, Wal-Mart, Southwest Airlines
- Differentiation – The goal is to deliver products or services to consumers that competitors are unable to offer. This can be achieved through competitive pricing, enhanced/ customizable features, customer service and brand loyalty. Typically these firms place an important emphasis on advertising. Examples: Nike, Apple, Starbucks
The Impact of Habit
In the American Journal of Psychology, a habit is defined as “a more or less fixed way of thinking, willing, or feeling acquired through previous repetition of a mental experience” (Andrews, 1908). These conditioned responses are present at a global level as part of company culture as well as at the individual level based on personal experience, and they significantly limit the strategic thinking process.
Achieving the most effective levels of strategic thinking requires identification of the Circle of Habit. The Circle of Habit is defined as the internal and external stimuli that impair the ability to diverge from the tactical mindset and engage in the strategic thought process.
Research over the last decade has discovered that brain activity drastically decreases when an individual engages in repetitive tasks or behaviors. Essentially, as habitual patterns emerge, the brain functions on a neurological form of auto-pilot (NPR, 2012, ¶7). For example, this mental cruise control is apparent when a person does not remember details from their daily commute or the exact order in which they prepared themselves for their work day. Theoretically, this inactivity would seem to indicate that some daily habits provide ample mental capacity for strategic thinking, but unless the mind is conditioned to utilize this additional brain power for global-level thinking it will default into habitual thoughts.
Personal thinking habits are typically created thru personality, daily routines, environment (home and work), and even factors like individual stress responses, fear of failure and lack of sleep. Professional habits commonly develop from a work environment that cultivates disillusionment (a “not my problem” mentality), creative stagnation (“the way it's always been done” culture), boredom (meetings, meetings, and more meetings) and apathy (the company slogan “it is what it is”). Compounding all of these factors is the destructive aspect of negative thinking. Negative thinking can be a useful tool in identifying lessons learned, problem solving, and risk assessment. When negative thinking becomes a habit like obsessing over project failures or constantly questioning decisions, it can become a formidable challenge to think strategically.
Identifying and changing habits like negative thinking requires an understanding of how habits are formed. According to journalist Charles Duhigg, “routines are made up of a three-part “habit loop”: a cue, a behavior and a reward. Understanding and interrupting that loop is key to breaking a habit” (NPR, 2012).
Using a similar method as root cause analysis in risk management, looking beyond the habit to find the trigger and working to substitute the brain's expectation of a specific result will help the process of creating more productive routines that are conducive to strategic thinking.
For instance, the following tips can be used to adjust negative thinking as well as other similar habits:
Indecisive or Second-Guessing Decisions - Psychologists at the University of Michigan have found that the simple act of washing hands in soap and water can relieve the anxiety the causes an individual to question their judgment (Lee & Schwarz, 2011).
Replaying Bad Memories - Memories of painful personal experiences or frustrating project failures that “play” on a mental loop can impact emotional stability and confidence. British neuroscientists Roland Benoit and Michael Anderson suggest that substituting positive memories of relaxing vacations or project successes can counteract the debilitating cycle of reliving the negative thoughts (Singer, Carr, Karlsson, & Frank, 2013, pp. 1163-1173).
Harboring Grudges or Resentments - According to researchers at Ohio State University, writing down grievances or other negative thoughts and deliberately destroying and throwing away the paper provides release from the continual thoughts (Observer, 2013).
Obsessive Thinking - Physical activity such as exercise can be a healthy stress reliever unless the repetitive, solitary activity provides time to indulge in obsessive thoughts. If that is the case, exercise classes that work out the brain as well as the body, along with organized group sports or team activities are more likely to break the negative thinking cycle (Pikul, 2013).
Boredom/Mindless Activity - When completing common repetitive tasks that trigger the brain to switch to autopilot, negative thinking or worrying often becomes the default “filler” thoughts. Rather than turning to mindless activities during break times or free time, try a challenging activity like a word game, cooking or learning a language. These activities create much stronger habitual patterns on which the brain can focus (Schwartz & Gladding, 2011).
Maintaining the status quo does not allow us to reach new levels of success even if we've been successful in the past. Iconic companies with significant industry market share and pervasive brand recognition can falter due to a profound lack of strategic thinking. In 2012, Kodak, a 124-year-old brand that set the standard for the photographic industry, filed bankruptcy. The company cited an inability to compete with Japanese digital camera manufacturers, but Kodak had in fact invented the first digital camera in 1974. They chose not to pursue the technology at the time because they feared it would disrupt the profitability of an established line of business—film (Huffington Post, 2013). Kodak could have benefited from better quality and quantity of strategic thinking. Anticipation of market trends, identification of habitual patterns, and alignment of the corporate strategy with innovative technology are just some of strategic moves that would have given the industry giant the longevity to continue providing the “Kodak moments” of life for generations of consumers. There are several “ingredients” discussed in this paper about how to grow strategic thinking across our professional and personal lives. It's up to each project manager to mix and match these concepts to create their own successful “recipe.”