6 Critical Skills Found in Strategic Thinkers

More than ever before, growing companies need strategic thinkers to ensure there is a healthy balance between tactical needs and sustainable long term growth. When people ask me to find them a strategic thinker, I turn it back to them to describe their needs in more detail. I typically hear one of two things:

1. “I need more people who can help with our strategy”
2. “She is a very strategic thinker” OR “He doesn’t seem strategic enough”

I watch as they struggle to give shape to their thoughts and provide clarification. In other words, they want something but don’t quite know what it is. So what is it?

Roger Martin, an internationally recognized management thinker, defines Strategy in Playing to Win as:

“STRATEGY is an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition”

Strategic Thinking enables you to create insights that inform decision making. It involves identifying different ways for people to attain their chosen objectives and determine what actions are needed to get them into the position they want to be in.

Strategic Thinking is commonly found in the most effective leaders. So how can you become a Strategic Thinker, regardless of where you’re at in your career?

According to Professor Stephen Stumpf’s theoretical model on Work Experiences that Stretch Manager’s Capacities for Strategic Thinking, Strategic Thinking involves six critical skills.

Know The Business And Markets

Knowing the business means understanding how your business makes money and the position it currently occupies in the market relative to its competitors. By knowing how you make money and who you compete against, you can begin to think about what advantages we currently have and what new abilities we need to further develop our advantage. The “way you make money” can also help you understand “why you make money”, which is another way of saying “what do customers hire from you (or buy from you) to solve?”

Strategic thinking requires moving beyond the ability to identify or recognize profit-centres, employ talents, trends, and consumer behaviours, and requires the ability to generate insights from this knowledge.

I’ve been around individuals who manifest the above traits and I know that they do the following incredibly well:

1. They ask thought provoking questions that stimulate thinking within the team and business unit by reframing the opportunity and challenge for a business
2. They are able to generate alternative courses of profitable action for a business and those alternative paths have real merit.

Manage Subunit Rivalry

So what does it mean to effectively manage subunit rivalry? 

• The sales team wants to sell
• The product team wants to build
• The finance team wants to save
• And they are all paid to do exactly that.

Guess whose job it is to manage those incompatible goals?

The strategic thinker holds this tension in their mind as they balance the trade-offs that affect one subunit to the downside, so that another can thrive. To do this effectively do this, start with the questions:

1. What market are you in?
2. How do you make money?
3. How do your competitors behave?
4. Where do you have competitive advantage?
5. How do you maximize your advantages?
6. Are you winning or losing?
7. Do you have the resources (money, time and people) to prioritize the strategic over the immediate?
8. Where in the company life cycle are you? Start-up vs Growth vs Decline

Answering these questions will then let you prioritize and manage the subunit rivalry. For example, if you are losing and at risk of going out of business due to cash flow you might want to prioritize the view and agenda of the finance team vs. your product team.

 “Hey, I really like the idea coming out of product but right now we need to cut cost and sell more to get through the next 2 quarters. How can Product help us achieve that goal?”

In other words, no new shiny and expensive stuff from Product. Let’s drive some revenue and profitability.

Now that those questions are answered, the strategic thinker balances the human part of telling someone and their team to subordinate their needs to the needs of another subunit. They transparently explain what is going on and make it relevant to all different subunits so that resistance and friction vanish.

Find And Overcome Threats

Great strategic thinkers are able to sense threats developing by bringing together multiple domains of knowledge or views of the world. There is the ability to recognize the signals given by emerging threats to a business – this means feeling the subtle rumble before the earthquake.

Think of a clear example: The minute that a song was digitized and circulated by file sharing tools like NAPSTER, it was clear that other forms of data would be digitized as well. Those strategic thinkers who were working in movie theatres or for DVD rental chains like Blockbuster should have been able to see the direct link between digital audio downloads and direct to home video downloads. Going further, the manufacturer of blank DVD media should have immediately reacted.

“Strategic managers monitor and diagnose key information in much the same way as a doctor practices medicine – by combining and recombining pieces of information into theories of what could go wrong.” (Stumpf, 1988)

How do you become more effective at sensing threats, classifying them and then reacting appropriately?

Here are 4 ideas:

1. Know your intended action/outcome
2. View issues from many perspectives – “how do others see this threat or problem?”
3. Consider many alternatives – “What other possible actions can I take to achieve my outcome?”
4. Remain open to new ideas – “Continually scan the landscape for new ideas, technologies, ways of doing business or some combination of those 3 that could threaten your business.”

Stay On Strategy

Don’t overreact and know when to stay the course. An early fall can be seen as a flat out failure, resulting in a pivot or abandoning the strategy altogether. Distractions come up, life gets in the way, and we see a lack of follow-up and follow-through. A mental model that I’ve been taught by a smart colleague is that we overestimate what can happen or be done in the short term while underestimating what can be done over a longer horizon.

Strategic Thinkers don’t bounce from shiny object to object or juggle multiple objectives, they are able to identify and prioritize the micro steps required to hold the course and deliver on the strategic vision. Discipline and good intentions are never enough. There are tools and concepts you can employ to stay on strategy. German Psychologist Peter Gollwitzer introduced such a concept in Implementation Intentions: Strong Effects of Simple Plans. When you are able to articulate and write down an “If – then” plan, research shows you are more likely to achieve your goals. Simply put, “if X happens, then I will do Y so I can achieve my goal of Z”. Habit formation as described in The Power of Habits and Atomic Habits are other resources that provide practical examples and tools that are scientifically proven to help you hold the course and meet your goals.

Be An Entrepreneurial Force

The strategic thinker will act as an entrepreneurial force within their organization. By understanding the broad interactions that their business unit or company has within a larger organization AND the external environment, they are able to identify entirely new business opportunities.

The strategic thinker understands that applying the company’s resources against new opportunities may come at the expense of other existing investments. Like most entrepreneurs the strategic thinker can clearly conceptualize a future state, explain the vision in an engaging way so that others can buy-in this future state, and commit to the development of the “new” at the expense of the “old.”

The strategic thinker uses this clarity of purpose to move forwards even when faced with skepticism and resistance from other parts of the business and even their direct team. They address small failures and refocus themselves and others on the larger goal by repeatedly describing the vision in vivid detail.

As I write this I am reminded of a 2018 article in HBR that speaks to the “Myth of the Intrapreneur” and the challenges that a strategic thinker will face as they try to create innovative and disruptive change.

The experience of the typical intrapreneur looks less like Spencer Silver, who developed the Post-It note while at 3M, and more like Steven Sasson, the engineer at Kodak who invented the portable digital camera. As is now well-known, instead of propelling Kodak into the future, the digital camera became a massive missed opportunity.

I recommend reading it the article and using it to inform your own thinking about innovation succeeding or failing at a company. You can almost use it as an audit check-list.

Accommodate Adversity

Facebook founder Mark Zuckerberg famously coined the phrase “Move Fast and Break Things” as a motto for disruption at Facebook. Moving fast also means that you and your team will need to accept failures. Adversity is seen as a momentary setback by a strategic thinker. They quickly analyze the failure and compare it against their mental models and then iterate their approach.

The strategic thinker also accommodates adversity by ensuring that they can survive adversity! By running multiple scenarios and thinking about worst case scenarios the strategic thinker can then work to ensure that their team or company has the resources required to weather minor or significant setbacks.

In Summary

You can look for strategic thinkers to join your team or check your own behaviour by looking for clear signals:

1. Know The Business And Markets
2. Manage Subunit Rivalry
3. Find And Overcome Threats
4. Stay On Strategy
5. Be An Entrepreneurial Force
6. Accommodate Adversity

Think about a strategic thinker you know who’s an effective leader. Which of these skills do they possess? How about you? Seek out work experiences and opportunities for you to fill the gap and sharpen your strategic thinking capabilities.

At Clarity, we aim to offer our candidates and clients with clear thinking and better decision making when it comes to hiring and making career moves. I’m curious to hear any thoughts you have about strategic thinking in leadership. Let me know in the comments or direct message me.