Strategic Thinking in Your Decision Making
Businesspeople in all sizes of growing companies, routinely encounter tough decisions, challenging problems, and complicated situations. In an ideal world, leaders could rely on highly structured frameworks supported by rich datasets to point them toward great choices. Unfortunately, no organization exists in an ideal world (and we know, decisions are not great or poor—they are simply judged by their degree of effectiveness). Plus, data and evidence are often limited (or not clear indicators of performance). As a small to mid-sized business professional, you must work with insufficient information; and your views may be disproportionately informed by a particular part of the organization—from where your view and influence on other parts of the organization might be restricted. By using strategic thinking, you can overcome these obstacles.
When you think strategically, you analyze problems from a broad, top-down, and long-term perspective, seeing all facets of opportunities, and identifying the potential impact that actions have on the future of the organization. Strategic thinking is big-picture thinking; you elevate your considerations and insights above your daily routines and consider the larger environment in which you work—the organization overall and its external environment. As a strategic thinker, you challenge assumptions about how the organization is positioned in relation to competitors and in the minds of customers and you ask questions about trends in the industry.
Do you ever ask these questions?
- How is my industry going to change in the short-term? How about ten years from now?
- As people and their attitudes change, lifestyles look different, and social norms change, what’s this mean for my industry? Could this make it incredibly more vibrant? Or, could a change like this kick us in the rear end?
- What’s the world going to look like? Will government, world economies, and sociology-economic interested remain favorable to my industry? Or, could everyone in our industry be facing increased costs, a fight for resources, and unbearably small margins?
Can you comfortably use ambiguous and scarce data to build scenarios and simulate the various “futures” you may face? And, are you confident your views of the short-, mid-, and long-term are most likely to occur?
Strategic thinking refers to skills that empower you to use critical thinking to recognize and overcome challenges, solve complex problems, set and accomplish goals, and anticipate and plan for the long term.
As a leader of any size company, your strategic thinking is one of the success factors we know separate the good from the great. When you regularly apply strategic thinking, you build confidence in your business activities and make more informed business decisions. You naturally become a more confident decision-maker—and this confidence is visible; building respect and followship in your associates, modeling the behavior you want to see your people demonstrate each day as they approach decisions.
Strategic decisions are big, consequential, often upending, and certainly have a directional impact on your company. Strategic decisions do not happen every day, but strategic thinking does. You should be looking at the various pieces that drive growth and contraction of the industries in which you operate, and simultaneously keep an extensive inventory of the areas in which your company excels versus needing to invest in or improve on. Strategic thinking is one of the capabilities every high-performing leader regularly demonstrates.
HBR’s Guide to Thinking Strategically would tell you that developing your strategic thinking can be challenging. We concur. Managers and leaders are more comfortable making choices based on the current; using data that very clearly indicates loss or growth, profit versus loss, and increased market share instead of declining pretense. The uncertainty makes us crazy! Even worse, the data one endeavors to use to guide strategic decisions are often qualitative and require analyses to infer meaning of value—more uncertainty! But that’s okay. They are ways, approaches, and frameworks for collecting data, running scenarios, and becoming comfortable with what we come to agree on as the most credible outcomes. Once you build that capability, you become exceptionally business savvy—seeing the future, executing plans to get there, overcoming obstacles along the way, and even seeing rapid change and rather than being scared, embracing it and innovating.
In my next post, I will focus on the strategic mindset and the five capabilities essential to demonstrate a strategic mindset.
This post is the first post in a two-part series on strategic thinking.
- Communication (1)
- Decision-Making (2)
- Management (1)
- Strategy (2)
- Business Growth (3)
- Finance (2)
- From 50 to 500 (1)
- General (2)
- Leadership (5)
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