Typically the management of strategy development is described in terms of strategic planning and analytical systems. Strategic Thinking, however, is even more important but less well developed. Getting to grips with (and blending) a strategic thinking and a strategic planning process is central to creating business advantage and mastering the strategy challenge.
STRATEGIC THINKING means getting a meeting of minds where the collective creativity reveals novel, innovative strategies to create sustainable business advantage; and to create possibilities for success significantly different from the present. It’s a divergent, creative, conceptual, synergistic team effort.
The purpose of STRATEGIC PLANNING is to put into operation the potential and possibilities developed through strategic thinking. It is a much more analytical, structured, conventional, and formal process. In my experience the problem is that managers rush into the planning stage because it is practical, hands-on and gives them early wins. But it’s the psychological, mental, even spiritual dimension of Strategic Thinking that emotionalises and transforms the strategy process. I call it, therefore, Emotional Strategy. Once the strategy team embrace this emotional approach much higher quality and sustainable planning emerges. Humans are more emotional (some say 100%) than analytical especially with regard to their future history.
Strategy is as old as the hills, or at least, as old as human conflict. Military examples and imagery have always played a key role in business development, probably because of a host of similarities. Who is the enemy/competitor? Where is the battlefield/market? What resources are deployed? How do we engage?
The Art of War written in 500 B.C. by Sun Tzu, a Chinese military general is a classic, then and now, because it challenges the assumptions that many people have about strategy. It is probably where the art of strategy was first encountered. Strategy is not mere theory. Sun Tzu challenges fundamentals. Why engage in battle when you can win by other means? Why not attack your enemy’s (competitor’s) strategy (rather then blindly pursue your own)? Or his alliances? Or next best, his soldiers?
Sun Tzu has no room for sentiment. He says: “Deploy forces to defend the strategic points: exercise vigilance in preparation,, do not be indolent. Deeply investigate the true situation, secretly await their laxity. Wait until they leave their strongholds, then seize what they love.”
The word strategy itself comes from the Greek word strategeia which means the art or science of being a (military) general. The Greek and Roman generals knew that wars were won by a careful management of politics, logistics, planning tactics and taking action, but the parallels between military and business strategy can be made throughout all periods of history right up to the 1990 Gulf War. Day to day business is like a series of battles in a war. If the overall strategy is correct (and it is usually correct if a systems thinking approach is taken) a number of tactical errors can be made without hindering the achievement of the overall objective.
Here is a seven step framework to moved you towards shared strategy. The first three or four steps are ‘heavy’ with the thinking process and the final steps are the traditional analytical planning steps:
All good strategy starts with an analysis of your current state of affairs. There is a host of strategic tools you can use to establish exactly where you are in the market place and on your journey forward. What are your critical (live or die) success factors? What are your core competencies? What is your competitive advantage (cost leadership, differentiation, technology, innovation). What business are you in, really? Who is your customer? What are your driving forces? Do a total situation analysis of sales, costs profits, trends, outlooks, issues, resources, structure. Everything.
Your history is a key part of who you are’. Don’t assume everyone knows where you have come from and what the journey has been like. Ask questions like: As your development path progressed, what were your major obstacles? How has the business grown and expanded? Without understanding who you have been and what it has meant, it is difficult to focus on where you are going, and ought to go. Strategic planners look at the past to find data points that allow them to uncover and plot trend lines. Strategic thinkers, on the other hand, look back to uncover plot lines in order to decipher the moral of the story. Planners mine the past for data. Thinkers mine the past for stories which help to link current reality with its past soul.
Your values lie at the very heart of strategy. What is important and significant to you? At the outset of this process I have often seen scoffed looks on managers faces as if to say oh no, were not going to get involved in this, squishy sentimental stuff!’ But once they get into clarifying and ordering their values they always take three or four times more time than was planned.
Values provide a framework for deciding on positions and a basis for action. Every hour spent sharing the values saves thousands of hours down the road.
Your mission is how you aspire to do things. It’s a broadly based enduring statement of purpose that differentiates your business. It is the reason for your long-term existence. It crystallises and articulates how we do things around here. It’s your operational, ethical and financial guiding light.
If an outcome of strategic thinking and planning is absolute clarity about who you are, what you do and where you are going, then this exercise demonstrates that executives (who have been working together for many years) can spend 5 -10 hours struggling with the definition of what they are about. When you see executives arguing and struggling with their colleagues about the definition and purpose of their business it helps explain why so much of the operational stuff that they are involved in falls apart.
The plain truth is that everyone has come to their own understanding of what their enterprise is about. And everybody then sets off to do their own best job with this perspective. No wonder we have disastrous communications, inefficiencies, low moral, wasted time and resources, poor planning and unsatisfactory results.
Your vision is something you can visualise’ and see at a particular moment in the future. It’s a clear description of a desired state affairs. It’s your big goal. It should be a clear compelling statement of where you want to go, demanding yet achievable, and reflect a fact based view of the future. A vision is a yardstick (look around, are we there yet?’) and it’s a rallying flag (it will be great when we get there so lets ‘).
In my experience managers have great difficulty visioning where they are going to be in say, five years time. The accelerated rate of change is the latest, greatest excuse of not stating clearly our five year position.
When you get to setting strategic goals, you will find they flow so easily that everyone is truly amazed. You see, we already know the answers to most of the challenges within our business. The problem is not the answers, it is getting to the answers. It’s the questions. It’s building the foundations and it’s getting collective responsibility. It’s aligning all the thinking, all the energy in the one direction. Your biggest enemy is not your competitor, it is your own team tripping over one another with the best of intentions. Leadership, therefore, is about this pulling divergent energy and activity together.
Often the writing’ them into sensible language causes most difficulty.
The tactical plans are the operational, day-to-day plans and objectives to carry out each strategic goal. They are in effect short-term goals and they must be specific, measurable and time bounded. Otherwise, they are just nice ideas. Who does it and by when is the key to tactics.
Strategic Thinking and Planning is a learned practice. Everyone is doing it to some degree all the time. The only question is How good are you at it’? The whole purpose of strategy is to create business advantage, to maximise your resources, decisions and core competencies. So get thinking, then planning.
©2000 John Butler