Stand well back – strategic thinking for success

This is a follow-up post to: Think about it – 8 ways to enhance your thinking

January is a great time to do some strategic thinking [but then so is any time!].

To think strategically, you need to stand back, look at the big picture, see the business as a whole and take the medium to longer-term perspective. You need the wide-angle rather than the telephoto lens.

Successful Strategies

Robert Grant suggests that successful strategies are based on four key elements:

Elements of Successful Strategies

1. Simple, clear, agreed objectives. If everyone is clear about what you are trying to achieve they should be able to work out how to help make it happen,
2. A profound understanding of the competitive environment. If you understand what is going on in the world and how it may affect your business, you know who you are competing with and on what basis then you can work out what you need to do to succeed.
3. An objective assessment of your resources and capabilities. If you understand whether you are fit enough to compete then you can work out how to exploit your advantages and set up approaches to improve where you have disadvantages.
4. Effective Implementation. Having good ideas is of no value if you can’t put them into action. This was discussed in a couple of earlier blog posts [Turning good ideas into effective action & One small step – from good idea to effective action .

Are you well equipped to develop and implement effective strategies? If not, what are you going to do to move forward? [If you are not moving forward, you are going backwards!]

Focus on the real issues

Most businesses need to do several things to move forward, but may find it difficult to work out what to focus on. There are many things which warrant attention and effective action requires focus on the things which really matter – developments inside or outside the business which have a significant effect on the organisation as a whole. They are likely to impact the business’s ability to meet its objectives or to compete effectively. These issues are also likely to require the application of significant amounts of money, time and effort and are often bound up in decisions which are not easy to reverse.

I like to think that most businesses will have between 3 and 7 [5 ± 2] issues of this type at any time [this matches recent thinking on the number of different things individuals can consciously focus on at the same time].

Strategic Issues and Relevant Questions

The graphic above suggests some questions you might find useful depending on the number of strategic issues you have.

Structure your issues

Many businesses think that they have many more than 7 issues to contend with. In most cases, however, this is due to a lack of structured thinking. Often it is easier to focus on the symptoms rather than the underlying disease. In these cases, structuring these issues can make it easier to see what the real issues are. This requires standing further back and taking a broader perspective.

Structuring Strategic Issues

Start with Strategic Thinking

Strategic thinking will help you to understand the underlying issues and focus your attention on what really matters. Structuring strategic issues in this way can reduce the feeling of being overwhelmed and the associated levels of stress by making it easier to see where attention should be concentrated.

Strategic thinking is a key component of pivotal thinking and needs to be spread throughout the business if you are to be successful. It is arrogant to assume that only the top people in the business can have the best ideas on how to move the business forward. In many cases, your frontline staff will have a much better understanding of what is going on in the world and what your real strengths and weaknesses are – so involve them in the process.

It is very easy to be drawn into operational thinking and focus on the details of the business – this can easily become the default thinking process.

There are many approaches to strategy and plenty of theory to structure your thoughts but the most important first step is to use effective strategic thinking.

Work at it

Effective strategic thinking needs effort and regular attention, it does not come naturally to most people and must be worked at. The strategic thinking muscle responds well to regular exercise.

Logical Developments … well maybe not!

If you are looking to develop your business and call in outside help, you are likely to be told to:

• Be clear about where you are trying to go [some form of vision or mission statement]
• Analyse what is going on in the market / world [STEP and market analysis]
• Examine your strengths and weaknesses [SWOT or resource analysis]
• Produce a plan to help you get there

Different advisors will use different jargon for each of these stages but they all mean the same thing – a logical analysis of the situation, a logical assessment of your capability to compete and a logical plan for moving forward. A very logical approach.

Usually, this is sound advice, particularly  if you want to improve gradually and it is certainly better than not doing any analysis but… there is a hidden danger.

if it is logical to you, it will be logical to everyone else!

and that will make it easy to copy and hard for you to differentiate yourself.

To make a step change in your performance and open up new possibilities, you sometimes need to think differently, look at the market differently and act illogically.

(c) Jim Yates 2011

Think about Stelios and EasyJet for example: He didn’t say… “how can I make air travel a bit cheaper?” – “He thought ..”If I can make it as cheap to fly from Liverpool to Malaga as it is to get a train from Liverpool to Edinburgh – enough people will go to Malaga for the weekend to make it profitable!” [You can insert your own choice of cities – the idea’s the same!] By doing this, he created a profitable niche in a very challenging market [and acquired a lot of imitators over time!]

It may sound logical once you get to the idea but you wouldn’t get there by logical, analytical thought processes. You might be able to construct a logic for how you got there by working backwards but you’d never get there in a logical linear fashion.

So how can you look at your product, service, market from a different angle and come up with an offering that excites new groups of customers?

Do you have the skills to help your team to come up with radical, illogical answers?

How can you encourage new ideas and more importantly stop crushing them?