Thinking strategically: 10 dimensions to it!
10 dimensions to thinking strategically!
To some, strategy is essential; while to some others, it is just “cool” to have or it’s “all in their head”. But whether specifically in “strategy” or other disciplines, we ought to be thinking strategically, and hence, I’d like to share what thinking strategically means to me, away from the industry jargon and business-specific terms and frameworks; here I wish to focus purely on the thinking patterns.
Strategy is a mindset, at the core, not a memorization of business frameworks and tools. It is true that following a process to develop strategies is a great way to organize an exercise amongst many participants in an organization or to help trigger one’s thoughts, one at a time in an appropriate manner. But at the basis of it, thinking strategically involves understanding and playing by the fundamentals of what makes good strategies, whether in business, career or personal life in general.
Thinking strategically, or elaborately, thinking holistically (in my view), is inclusive of various aspects which make a strategy bulletproof, argumentatively, and hence effectively. By holistically, I don’t mean the sum of all parts, but all variables. Below I’ll share and elaborate on what I find to be the most critical aspects or dimensions that add-up to thinking strategically (or holistically).
I wrote this with complete joy, and it is something I hope you will enjoy! Certainly, you would find this to be common sense which it is; but after quite some time of observing and analyzing the complex thinking process when strategizing, I knew it would be fun and maybe useful, to note down and share my thoughts around this. So here it goes; in order to be thinking strategically, we ought to be:
1. Thinking objectively (with the end in mind)
Before anything, we must have clarity around what we are trying to achieve and why we are trying to achieve it. Thinking strategically must be done to achieve some goal or objective: to win, sell, optimize or any other smart objective in its given context.
We often strategize before having enough clarity of the ambition or the goal in mind, and this is where objectivity becomes hard to nail. Yet, even when doing so, we’re not always firm on the criteria or measures by which this success can be achieved (e.g. is it profits or revenues? total revenues, or revenues per…?). Strategy is only a means to reach a goal, and execution is a means to realize the strategy. Just as the goal has to be defined, there needs to be objective clarity on what impact to make and measure.
To be specific, in business for example, you’ll hear many entrepreneurs say “when my startup goes public…”, when maybe for what really matters to them, taking the company public isn’t the best option to achieve their goals and ambitions, but it just seems like a natural step in the process of growing a company; so I ask, WHY is this the strategy to growing, controlling, exiting or whatever the ambition is? In personal career choices, one common thing as well is saying “when I graduate, it’s best if I work in XYZ, my friends and cousins told me so”, but again, WHY? I elaborate more on this topic in my previous thought, Thinking critically. The main point here is that objectivity is essential to having a relevant strategy after all.
2. Thinking openly (inclusively)
With that in mind, knowing what we aim to achieve, and while we have to be clear and specific on our objectives, we must be open-minded when it comes to exploring options and possibilities of what the strategy might look like to achieve our defined ambitions. Alone, or even more within a group (which triggers groupthink), it is most dangerous to jump to conclusion too quickly before giving everyone a chance to think independently and note down their thoughts and ideas – this blocks everyone’s brainpower. Once we’re fixated on one view it becomes very hard to look away, mentally and politically (in corporate contexts). Believe it or not, whether it is your idea that’s being fixated on, or someone else’s, you’ll be missing out on the potential of the other brains in the room combined; even if you know it’s a good idea, someone could’ve surprised you with something better – but it’s rather uncomfortable for many, to explore the unknown.
So, note down what you already know, but also force yourself to explore what else could be there, even thoughts that don’t seem to be realistic at first, and leave the filtration and elimination process for a later stage – as long as everything is linked to a common goal or objective. It’s the best time to be creative.
3. Thinking contextually (realistically)
Of course, we must not leave this out; it’s super essential. There’s no “one size fits all” strategy, or one strategy for all times. Separately, we must make a note of what the context is.
2020 was interesting for everyone, but in different ways. Every company, country, industry or person is different. Some struggled with vanishing levels of demand, when others struggled to fulfill the skyrocketing demand. COVID-19 had a huge impact on everyone, but was it the same for Amazon as it was for airline companies? Certainly not.
While the external environment is very important, relating it to the internal context is a must (asking questions like: Who are we and what does this mean for us? What makes us different, stronger or weaker?). In doing so, we naturally start to eliminate and narrow down our pool of options.
4. Thinking coherently (consistently)
Some strategic options will result in some obligations or constraints that we have to make a note of (“If we do A, we have to do B” or “If we do A, we can’t do B”). But also, throughout, we have to be logical, consistent and critical on what “is” and what “is not”. The terminology we use, categorization we follow, logical steps we take and all stepping stones must align together and have coherence. We must continue to remind and ask ourselves:
How is what we’re doing relevant to what we aim to achieve?
Are we really asking the right questions?
Are we coming with relevant conclusions?
Are we validating the right thing?
Is this valid?
What does this entail, and how do all the pieces fit together?
In my opinion this a trait of what I call the “strategic angel” in the group, also known as “the devil’s advocate”.
5. Thinking effectively (optimally)
What is or should be our priority, or what is really important now and here? This is a tricky one, because it does involve breaking down our decision-making criteria into several components. By doing so, these components are melted into a one overall measure which helps us understand how to compare one option against the other, in a fair manner.
In some cases, we could have dominant components which would provide a first-level filtration criteria for our options (these could be some higher-level obligations or constraints). Essentially, this is where we might have to face the tradeoff dilemma: Having to choose or focus on only one thing. We can’t boil the ocean, or be the jack of all trades as they say; or maybe we can, I guess it all depends…
Ideally, the 80/20 mindset is one to boost effectiveness (doing the least to get the most). But in practice, there are some common pitfalls that come along with it, which I have touched on from my own perspective in a previous thought, The pitfall of 80/20.
Here’s an example: During the COVID-19 pandemic, hospitals in some countries had to make difficult decisions around who to prioritize treatment for, for the common good; hence they decided to prioritize patients with higher life expectancy, and prioritized the younger population. In a situation where most of the deaths were attributed to high age and chronic conditions, would you have done the same? One logic points that younger population have longer life expectancy, and an opposing one points that they have far less risk of death. If you enjoy probability and statistics you can easily do the math and compare options (if you’re solving with and for the right variables). But what’s more important to note here is that multiple variables (e.g. age, life expectancy and risk of death) must be dynamically considered, not just one. More often than not, these variables go in opposite directions.
6. Thinking synergically (accordingly)
Every person or company has certain constraints to be aware of and work around, but also strengths and advantages to leverage. So, one important thing to think about is how we might be able to unfairly amplify one of the options or strategic directions by what we already have. Here are some helpful questions to ask:
What are the alignments that we should or could have and synergies that we could realize?
Do we need to be aware of some existing efforts?
Leveraging existing efforts or exceptional advantages is a no-brainer. However, this is where in many cases the sunk cost fallacy is relevant, but not necessarily apparent. The aim here is to view things from an advantage lens, expand results and avoid conflicts and confusions.
7. Thinking systematically
Understanding and framing all parts in a one-whole-piece is crucial. Our analysis should take into consideration interdependencies between all parts of the system and strategy. Identifying dependencies and precedencies will help avoid dead-ends and bottlenecks, and is essential to simulate accurate scenarios. A lot of times, we do things not because of their direct impact, but because of their indirect impact in enabling another crucial piece for the overall success of the strategy. Think about how opening/closing the boarders of a country (during a pandemic) might relate to all other matters.
All in all, when thinking systematically, we must recognize where:
1 + 1 might equal 3
3 − 1 might equal 1
8. Thinking chronologically
Of course, we must plan accordingly. Having all the pieces put together is important, but just as understanding time horizons is, to be able to project, modify and make decisions on our plans.
It’s not just a matter of HOW, but also WHEN. As referred to earlier in the importance of contextual thinking, the WHEN limitations could justifiably change WHAT we end up doing and/or HOW we end up doing it, and vice versa.
Thinking about this must involve the desired milestones and expected implications: short, medium and long terms. While the level of granularity can be lower as we look further in the time horizon, we must adequately think through “what’s next?” as we cook our strategy.
9. Thinking predictably
But how certain are we? We’re never 100% sure; it’s statistically impossible. Sometimes we are too far from being sure and we must acknowledge it. We need to ask ourselves: How can we be more certain or what questions do we need to answer to be more certain?
Understanding the right drivers to predicting and forecasting is important and can’t be overlooked (it can’t always be trendline projections!). Hence, recognizing areas of uncertainty is key to avoiding potential pitfalls of bad forecasts and resulting outcomes.
We don’t always have the right or best clues, and this is where the “strategic angel” comes in and asks: “if we are not comfortable with the certainty/predictability of this, how does it relate to the validity of our strategic logic?”.
10. Thinking proactively
What if not? What’s our Plan-B going to be?
Thinking proactively enables us to plan for risks and potential issues; it helps us build flexibility where needed. This is where “agility” comes into play. Whether it’s related to bad or good outcomes, risk is always there. Assessing, developing and adapting plans to mitigate, avoid, enhance or exploit risky events is essential in this rapidly changing world. So, knowing this, what are those factors that are key to success and how do we manage the potential risks around them? Scenario planning is a rich topic, and as the name suggests, is to plan for different scenarios and uncertainties, but is worthwhile learning more about.
To close
Saying what I said, I truly believe that strategy is a mindset which is holistic in the sense that it constantly and dynamically involves thinking objectively, openly, contextually, coherently, effectively, synergically, systematically, chronologically, predictably, and last but not least, proactively. While these may seem like they’re steps in the process, they’re not, and I can’t say they’re exhaustive either; but they’re, most definitely, essential thoughts that we ought to be having when thinking strategically.
Should you require further support with your business in evaluating key business decisions, please feel free to make an appointment so that I can further help you, based on your specific needs, or learn more about how I help businesses (and potentially yours) reach their utmost potential.
If you’ve found this to be useful and/or would like to stay up-to-date with upcoming thoughts, you can subscribe to receive notifications and future updates.
