Developing strategic thinking Essay

IntroductionMy re face interest in strategicalalalal idea started in 1993 when I interviewed 35 senior executive directors for a longitudinal battleground on the changes in strategic pro fantasy and strategic worry in large organisations between 1982 and 1993. These senior executives were responsible for strategic planning, strategic vigilance or corporate maturement in 35 of the 100 largest manufacturing companies in Australia. The interviews lasted between three and four hours and sensation of the hesitancys I asked concerned the problems that they had experient with their strategic planning or strategic management commence in the preceding five years. The main problem identified by the legal age of senior executives was strategic thought. Interestingly, strategic thought branch was a problem unheeding of whether the companies had a formalised strategic planning governance or employ a non-formalised approach. For example, one senior executive from a comp any with a formalised strategic planning system stated Our senior executives escape to get carried away by details and lose their strategic perspective. countermandLack of strategic persuasion by senior managers has been identified as a major shortcoming in organisations. Draws on concepts in management and psychology to present a framework that depose be apply to remedy this situation. Argues that strategic idea postulate to be turn to at two divergent, tho interrelated levels the somebody level and the organisational level. Organisations that successfully mix strategic view at these two levels will clear a overcritical core competency that forms the basis of an enduring combative advantage.Europe, eastside Asia, Australia, New Zealand and the United States (p. 242). The ability to think strategically, however, is crucial to remaining competitive in an increasingly turbulent and global environment. Considering that the average life forecast of US Fortune 500 compani es is only between 40 and 50 years (de Geus, 1997) and that only 49 percent of the 100 largest manufacturers in Australia in 1982 were still among the top 100 manufacturers in 1993 (Bonn and Christodoulou, 1996), the inquire for strategic thinking has never been greater. This paper presents a framework that can be apply to increase strategic thinking in organisations. It argues that strategic thinking selects to be considered at two different, and inter-related levels. Organisations that successfully integrate strategic thinking at these two levels will bring to pass a critical core competency that forms the basis of an enduring source of competitive advantage.The reach on strategic thinkingThere is no agreement in the literature on what strategic thinking is. A number of authors acknowledge h senile used the term interchangeably with other concepts such as strategic planning or strategic management. Wilson (1994) for example nones thatSimilarly, a senior executive from a c ompany without a formalised planning system inform It is a major challenge to get our decision makers to think in strategic kinda than operational terms.This lack of strategic thinking is non restricted to organisations in Australia. As research from the Institute of Directors in capital of the United Kingdom has shown, 90 per cent of directors and vice-presidents had no induction, inclusion or training to perform a competent direction giver of their business (Garratt, 1995a, p. 242). According to Garratt (1995a), this serving call inms to hold unspoiled in The current issue and full textbook archive of this journal is addressable at http//www.emerald-library.com/ftThis continuing search for improvement has profoundly changed the character of strategic planning so that it is straightway more attach to refer to it as strategic management or strategic thinking (p. 14, italics in original).Other authors check focussed on strategic management processes and either stated expl icitly that good strategic planning adds to strategic thinking (Porter, 1987) or assumed implicitly that a well designed strategic management system facilitates strategic thinking inside an organisation (Thompson and Strickland, 1999 Viljoen, 1994). Mintzberg (1994) suggested a clear property between strategic thinking and concepts such as strategic planning. He stated that strategic planning is not strategic thinking (p. 107) and argued that each term focuses on a different stage in the strategy development process. In his view, strategic planning focuses on analysis and deals with the articulation, elaboration and formalisation of alive strategies. Strategic thinking, on the other hand, emphasises synthesis, using intuition and creativity to ca-ca an integrated perspective of the enterprise (p. 108).He claimed that strategic planning is a process that should occur after strategic thinking. Garratt (1995b) argued along similar lines. He defined strategic thinking as a proc ess by which senior executives can rise above the daily managerial processes and crises (p. 2) to cause a different perspective of the organisation and its changing environments. Heracleous (1998) do the distinction between strategic planning and strategic thinking by an affinity to single-loop learning and double-loop learning. In his view, the former is analogous to strategic planning, the later to strategic thinking. He claimed that single-loop learning involves thinking within existing assumptions and taking works ground on a fixed set of potential action alternatives. Double-loop learning, in contrast, challenges existing assumptions and develops brisk and innovative solutions, leading to potentially more appropriate actions. Heracleous argued that like single-loop learning and double-loop learning, strategic planning and strategic thinking atomic number 18 interrelated in a dialectical process and argon evenly important for effective strategic management.This artic le supports the view that strategic thinking and strategic planning be two different concepts and that strategic planning is a process, which takes ramble after strategic thinking. My analysis in the pursuance sections demonstrates that strategic thinking manifests itself at two different levels the single(a) level and the organisational level. This approach integrates the micro domains focus on somebodys and groups with the big domains focus on organisations and their mise en scene. In other words, it acknowledges the trance of individual characteristics and actions on the organisational context and vice versa, the influence of the organisational context on individual thinking and behavior. As Chatman et al. (1986) have argued When we smack at individual behaviour in organizations, we are actually seeing two entities the individual as himself and the individual as representative of this collectivity . . . Thus the individual not only acts on behalf of the organization in the usual agency sense, but he also acts, more subtly as the organization when he embodies the nourishs, beliefs, and goals of the collectivity.Thus, substantiateing strategic thinking requires a dual-level approach that investigates the characteristics of an individual strategic thinker as well as the dynamics and processes that take post within the organisational context in which the individual operates. For instance, to obtain an accurate tele muckle of the effects of differing leadership styles on strategic thinking, we can look at their impact on individual managers and on the way they influence the wider organisational climate, burnish and structure.Strategic thinking at the individual levelStrategic thinking at the individual level comprises three main instalments 1 a holistic understanding of the organisation and its environment 2 creativity and 3 a resourcefulness for the coming(prenominal) of the organisation. Each of these elements will be addressed in the following sections.A holistic understanding of the organisation and its environmentA crucial element of strategic thinking is the ability to take a holistic perspective of the organisation and its environment. This requires an understanding of how different problems and issues are connected with each other, how they influence each other and what effect one solution in a particular area would have on other areas. As Kaufman (1991) has expressed it Strategic thinking is characterized by a switch from seeing the organization as a splintered conglomerate of disassociated move (and employees) competing for resources, to seeing and dealing with the corporation as a holistic system that integrates each part in relationship to the whole (p. 69).Taking a holistic approach requires the ability to distance oneself from day-to-day operational problems and to see how problems and issues are connected to the overall pattern that underlies particular details and events. Senge (1990) has called th is approach systems thinking. He argued that We must look beyond personalities and events. We must look into the underlying structures which shape individual actions and create the conditions where types of events become liable(predicate) (p. 43). such an attention to the underlying structures of complex situations requires thinking in terms of processes rather than events to enable a reconciliation of apparent contradictions and the development of innovative solutions. know complexity in organisations also requires managers to be familiar with the dynamics of organisational life. Stacey (1996) argued that managers need a thorough understanding of how organisations and managerial actions change over sequence and of the feedback processes that lead to such changes. This includes being sensitive to the subtle interactions between the different parts of the organisation and understanding the structural causes of behaviour and their effects on other parts of the organisation. Finally, a holistic view requires recognition that organisations are components within large and complex systems, such as markets, industries and nations. Strategic thinkers need to understand how organisations are embedded within this wider context and how they are influenced by the dynamics, interconnection and interdependency of these systems.Strategy is about ideas and the development of novel solutions to create competitive advantage. Strategic thinkers must search for new approaches and envision break away ship canal of doing things. A prerequisite for this is creativity, in particular the ability to question prevalent concepts and perceptions (de Bono, 1996) and to recombine or make connections between issues that may bet unconnected (Robinson and Stern, 1997). According to Amabile (1998), creative thinking refers to how people approach problems and solutions their amiable ability to put existing ideas together in new combinations (p. 79, italics in original).This involv es gainsay the tyranny of the given (Kao, 1997, p. 47) by questioning customary beliefs or mental models in the organisation. Senge (1990) has described mental models as productive ingrained assumptions, generalizations, or even pictures or images that influence how we understand the world and how we take action (p. 8). He argues that such models are often tacit and beneath our level of awareness, yet they have a strong influence on organisational behaviour . . . new insights fail to get put into practice because they conflict with deep held internal images of how the world works, images that limit us to familiar ways of thinking and acting (p. 174).Thus, the ability to reflect on mental models and to challenge prevailing assumptions and core beliefs is crucial for the development of unique strategies and action programs. This requires strategic thinkers to understand their own behavioral patterns as well as existing concepts and perceptions within the organisation. Strategists should enjoy the challenge of thinking out of the box and of using visual sense and creativity to explore whether there energy be alternative ways of doing things. De Bono (1996) has made this point actually clearWithout creativity we are unable to make full use of the information and experience that is already available to us and is locked up in old structures, old patterns, old concepts, and old perceptions (p. 17).Creativity is a process that begins with the generation of ideas. As de Bono (1996) has notable. . . strategy is too often seen solely as a reduction process in which various possibilities are reduced to a sensible movement of action (p. 72).CreativityCreative thinking is needed to imagine twofold possibilities and to search for alternatives to conventional approaches. The creative process also involves the selection and development of ideas. Good strategists are able to recognise the potential of a new idea at a very early stage. To visualise the value of a n idea that has been put forward by people from different organisational levels might be even more important than the generation of original ideas by the strategist. As Robinson and Stern (1997) have observed The larger the company, the more likely it is that the components of creative acts are already present somewhere in it, but the less likely it is that they will be brought together without some support (p. 15, italics in original).Finally, there is the need for translating the new idea into practice. Senior management must provide the resources that are needed to implement the idea. As Amabile (1998) has noted . . . deciding how much time and money to give to a aggroup or project is a sophisticated judgment call that can either support or kill creativity (p. 82)A vision for the futureStrategic thinking should be driven by a strong sense of organisational purpose and a vision of the desired future for the organisation. A existent vision as opposed to the popular vision- accounts conveys a sense of direction and provides the focus for all activities within the organisation.For Senge (1990), a genuine vision is a calling rather than simply a good idea (p. 142, italics in original). In his view, visions are pictures or images people escape in their heads and hearts (p. 206). They represent what one truly wants, based on fundamental intrinsic values and a sense of purpose that matters deeply to the people in the organisation. Evidence for the importance of a clear vision has been provided by collins and Porras (1998). Their research showed that visionary companies outperformed nonvisionary companies significantly. One dollar invested in a general market stock fund on January 1, 1926 would have large(p) to 415 dollars by December 31, 1990, while the same dollar invested in a visionary company stock fund would have grown to 6,356 dollars, a difference of over 1500 percent.According to Collins and Porras (1998), the visionary companies did not attain t his extraordinary long-term work because they wrote one of the elegant vision or mission statements that have become popular in late(a) years. They pointed out that Just because a company has a vision statement (or something like it) in no way guarantees that it will become a visionary company (p. 201, italics in original). Instead, leaders in visionary companies place strong emphasis on building an organisation that has a deep understanding of its reason for existence and of its core values, those fundamental and enduring principles that track down and inspire people throughout the organisation and bind them together or so a common identity. Thomas J. Watson, Jr. (1963), former IBM chief executive, made this point very clear I firmly believe that any organization, in order to survive and achieve success, must have a sound set of beliefs on which it premises all its policies and actions (p. 5).consistent concurrence (p. 229, italics in original).Developing a genuine vision and b uilding it into the very fabric of the organisation must be a central element of the daily work of strategic thinkers. A vision that is shared throughout the organisation fosters commitment rather than compliance and creates a sense of vulgarity that permeates the whole organisation. It inspires peoples imagination and provides a focus that allows individuals to contribute in ways that make the most of their expertise and talents. Ultimately, as Collins and Porras have shown, a genuine vision helps to achieve superior performance in the longterm.Strategic thinking at the organisational levelThe organisational level provides the context in which individual strategic thinking can occur. Organisations need to create the structures, processes and systems that 1 foster ongoing strategic dialogue among the top aggroup and 2 take advantage of the ingenuity and creativity of every individual employee.