Leaders easily handle routine decisions and events by relying on past practices and habit. However, today leaders face complex decisions and unprecedented conditions requiring thoughtful analysis instead of conditioned reactions. Instead of being “safe,” conventional thinking is dangerous.
The fast pace of changes requires sound strategic thinking practices. If leaders fail to consider all aspects, ramifications and liabilities, it can be costly. Delta and Southwest airlines experienced preventable computer systems failures; Target, Neiman-Marcus and Home Depot suffered from security breaches; Volkswagen altered emissions tests without fully assessing the risk to their corporate brand; cereal manufacturers ignored early signs of a shift in breakfast preferences and the list goes on. Too frequently leaders are blindsided by new conditions and risks.
IBM’s Enterprise of the Future study found that the largest factor in a leader’s inability to cope with change was a rigid mindset. Mental dexterity stems from strategic thinking and situational awareness. The World Economic Forum issued their Future of Jobs in January 2016. It ranked needed job skills in 2020 as:
- Complex problem solving
- Critical thinking
- People management
- Coordinating with others
- Emotional intelligence
- Judgment and decision making
- Service orientation
- Cognitive flexibility
Given economics, technical, competitive and demographic shifts leaders must carefully analyze current conditions. The examples cited in travel, retail, auto and cereal industries paid the price of not recognizing and addressing new facets and realities. Their inability to adjust cannot be attributed to a leadership style or IQ. The issue is a perception deficiency and inattention to strategic thinking. Leaders must balance what has been with what is evolving to sustain success. Relying only on the past equates to driving forward by looking in the rear view mirror.
Expecting past practice to deliver different results is foolhardy. Change, complexity and ambiguity require new practices including:
- Continual scanning of both internal and external realities and trends
- Recognizing system interdependencies and adjusting to ensure alignment
- with current strategies
- Creating and rewarding an innovative and change ready culture
- Effective execution planning with clear milestones and metrics
Urgent issues too frequently eclipse strategic ones. It is ill-advised to stay in a fire fighting mode too long, just as it is dangerous to stick to an old business model. Leaders who adhere to what has been fail to recognize what is eroding and evolving. Blackberry lost its dominance the PDA market, Motorola’s commanding position in cell phones now belongs to others, and Kodak’s and Polaroid’s supremacy evaporated. These examples are not unique. Too many leaders assume that an operational mindset is the key to success. They also assume that strategic thinking is a once a year event for executives. Instead, strategic thinking ensures their future when it is continually deployed throughout the organization.
Strategic thinking is not rocket science. A six bucket strategic mindset outlined in Brilliant or Blunder: 6 Ways Leaders Navigate Uncertainty, Opportunity and Complexity has expanded strategic thinking using a comprehensive mindset checklist. The framework also dispels common misconceptions that strategic thinking requires a high IQ or that it can only be used at executive levels. The checklist tool covers each mindset ensure that the right call is made at the right time for the right results.
Using questions to scan current realities reveals new alternatives, reduces risks, conserves resources and leverages opportunities. Getting it right at the start saves time, resources and reputations. Some leaders assert that they do not have time to engage in strategic thinking, yet they always find the time to fix the mistakes that they could have avoided if they had adopted a strategic perspective.
In the past, leaders were expected to have all the answers, the number of variables, the rate of change and the cost of errors has shifted the old standards. No one can have all the information necessary in all areas. Now leaders must ask the right questions to juggle competing opportunities and pressures. A sample of a mindset checklist questions include:
- How can we take our existing products/services to a new level?
- How can we leverage technology?
- What will make us unique?
- What is the competition doing?
- How can we grow our share of the market?
- What are we learning from our key customers?
- What will ensure smooth and seamless execution?
- What will improve our monitoring effectiveness?
- What will improve alignment?
- What is the cost/benefit analysis?
- How can we reduce costs or improve cycle time?
- How can we boost quality and safety?
- Do we have the skills/staff we need?
- Are rewards/recognition aligned with our strategy and used effectively?
- Are we developing our talent/bench strength to match our strategy?
- What emerging trends need to be addressed?
- Are our assumptions still valid?
- What alliances or partnerships can help us?
Stephen Covey’s 7 Habits of Highly Effective People emphasizes the importance of keeping the end in mind and putting first things first. But how do leaders decide what needs to be first and what is the best end to keep in mind? Strategic thinking tools identify what to tackle first and what ends must be achieved. As Peter Drucker stated “Effective leadership is not about making speeches or being liked; leadership is defined by results.” Better short- and long-term results stem from cultivating strategic thinking. Leaders can seize opportunities and circumvent risks when everyone is thinking.