Part 1: Characteristics of Strategic Thinking

An excerpt of my research paper titled “The Backside of the Loop: Design Thinking as a Strategic Resource For Change.” This is a 2-part story on Medium comparing strategic thinking and design thinking. [Part 2]

Strategy is not a simple thing to define, nor does it necessarily have simple characteristics. Loosely, Freedman defines strategy as “maintaining a balance between ends, ways, and means; about identifying objectives; and about the resources and methods available for meeting such objectives” (Freedman, 2013, p. XI). Strategy can refer to both the actions taken towards an objective, and “the processes by which actions are decided and implemented” (Chaffee, 1985, p. 89). For the purposes of this paper, we will separate those two concepts and refer to the actions taken as strategy and the processes determining those actions as strategic thinking, while acknowledging that the separation of those concepts is tenuous at best (Mintzberg et al., 1998).

There are some commonalities in corporate strategy literature on what strategy means, on which Ellen Chaffee has elucidated. Strategy concerns both internal organization and external environment. Strategy is nonroutine and nonrepetitive due to the ever evolving, novel circumstances challenging an organization. In other words, it defies refinement as a heuristic, and certainly has avoided becoming algorithmic, if we use Roger Martin’s concept of the funnel of knowledge (2009). Strategy affects the welfare of an organization; either good or bad. Intended, emergent, and realized strategies are not always one and the same. Strategy exists on different hierarchical levels in an organization. And finally, strategy requires both analytical and conceptual exercises.

Similarly, strategic thinking has had various definitions and ideas on how strategy is approached. Based on the cognitive school of strategy formation, strategic thinking is not just a deliberate process for the formulation of strategy, but a lens for making particular decisions out of a set of possible decisions, even at the lowest levels of the organization. In addition to identifying qualities of synthesis and intuition, Jeanne Liedtka (1998) outlines some common threads to define the characteristics of strategic thinking:

1 A strategic thinker must have a systems perspective. They require an understanding of the complex ecosystem of the context in which one operates (Moore, 1993), while also recognizing the interrelationships forming the internal structures of an organization (Senge, 1992). The strategist must cut across their organization and also look at the macro- and micro-systems in place, as well as their own personal position within those systems.

2 A strategic thinker must have an intent. Strategic intent contains a sense of direction, a sense of discovery, and a sense of destiny (Hamel & Prahalad, 1989). Strategic thinking also requires long term focus and an ability to resist distraction in order to maintain strategic intent.

3 A strategic thinker must have intelligent opportunism. Having plans that are too concrete runs the risk of being unable to adapt an organization to better fit any changes in the environment (Burgelman, 1991). On the other hand, having opportunism allows the strategist to not only recognize but react to unfolding situations. Therefore, intent must be continuous and systemic as new challenges, needs, and aspirations unfold (Stacey, 1992).

4 A strategic thinker must think through time. Originally, strategic fit was about matching current capabilities to current opportunities. Strategic intent seeks to bridge a gap between present reality and future possibilities (Hamel & Prahalad, 1989). In addition, a strategist must account for the past historical and cultural contexts of an organization (note the connection to the cultural school), while looking at present organizational capabilities and strategic intent for the future (Handy, 1994).

5 A strategic thinker must be hypothesis-driven. Strategic thinking has an iterative approach that combines both creative and intuitive thought processes with analytical and critical ones (Liedtka, 1998). Generation of hypotheses requires creative leaps of abductive reasoning (“What if…”) while testing hypotheses (“If… Then…”); analyzing the results requires deductive and inductive reasoning. I will explore this more when we speak of design thinking, which also follows the scientific method (Dubberly Design Office, 2009).

These characteristics are interrelated to bolster and strengthen other characteristics. Peter Senge’s position, which is referenced by both Liedtka and Mintzberg, is that strategic thinking is a learning process. It requires the strategist to have the ability to inquire about other perspectives, not just to advocate for one’s own perspective. Although I have decoupled strategy from strategic thinking to help define and expand the terms, in practice there is no such separation. Strategy is made from thinking strategically when multiple options exist under complex circumstances, even when that thinking is either explicit and formal, or intuitive and unconscious. This is what separates a strategy from a plan.

This is an excerpt from “The Backside of the Loop: Design Thinking as a Strategic Resource For Change.”

References

Burgelman, R. A. (1991). Intraorganizational ecology of strategy making and organizational adaptation: Theory and field research. Organization Science, 2(3), 239–262.

Chaffee, E. E. (1985). Three Models of Strategy. Academy of Management Review, 10(1), 89–98.

A Model of The Creative Process. (2009, March 20). Dubberly Design Office. http://www.dubberly.com/concept-maps/creative-process.html

Freedman, L. (2013). Strategy: A history. Oxford University Press.

Hamel, G. & Prahalad, C.K. (1989). Strategic Intent. Harvard Business Review.

Handy, C. B. (1995). The Age of Paradox. Harvard Business Press.

Liedtka, J. M. (1998). Strategic thinking: Can it be taught? Long Range Planning, 31(1), 120–129. https://doi.org/10.1016/S0024-6301(97)00098-8

Martin, R. L. (2009). The design of business: Why design thinking is the next competitive advantage. Harvard Business Press.

Mintzberg, H., Ahlstrand, B. W., & Lampel, J. (1998). Strategy safari: A guided tour through the wilds of strategic management. Free Press.

Moore, J. F. (1993). Predators and prey: a new ecology of competition. Harvard Business Review, 71(3), 75–86.

Senge, P. M. (1992). Mental models. Planning Review, 44(3–4), 4–10.

Stacey, R. D. (1992). Managing the Unknowable. John Wiley & Sons.