Many people confuse strategic planning with strategic thinking. They are not the same. As the name implies, strategic planning refers to posturing and positioning the business for growth. There is a competitive bent to strategic planning, where the company makes plans to outsmart, outdo and outperform the competition. The tools of strategic planning include Porter’s five forces, SWOT & PEST analyses, affinity diagrams, game theory and the like. The outcome of these activities is a plan to ensure that the goals of the company are met.
The difference between strategic thinking & strategic planning
Strategic thinking is more fundamental than that. The difference between strategic thinking and strategic planning is simply the difference between the two words planning and thinking. Planning is a function that is performed by only a select group of people in a company; thinking is the job of everyone. Hence, strategic thinking really is a function of every employee in an organisation to ensure that the decisions they make are robust and complete. And this does not just apply for the company. It applies to all decisions that they make. Hence, strategic thinking has a wider application for the individual than does strategic planning. This is not to say that we cannot apply strategic planning tools for our individual issues; but it does seem a little of an overkill if we were to look at the power of suppliers and buyers when we are deciding whether to change our car or not. Hence, strategic planning’s domain is in the company, strategic thinking is in the person – professional as well as personal.
What do we focus on in strategic thinking?
So while strategic planning will look at the environment and assess the impact of their plans in that ecosystem, strategic thinking takes on a less targeted view. It applies an expansive view of the situation. Henry Mintzberg wrote in 1995 that strategic thinking comprises a series of perspectives; 3 pairs of opposing perspectives and one overarching one as shown in the picture.
a. Seeing ahead and seeing behind
Obviously strategic thinking is future-focused. That is the “seeing ahead” perspective. Yet as we look ahead, we cannot forget where we came from and what brought us here. That is seeing behind. We therefore need both opposing perspectives to maintain a strategic view.
b. Seeing from above and seeing from below
Another term for seeing from above is “helicopter vision”. This is indeed an important skill and Shell employees were previously assessed on their helicopter vision. To be promoted to higher levels, one needs to be able to demonstrate helicopter vision. This is a very strategic skill.
Yet if one were to ride in a helicopter and look down on the canopy of a forest, it looks like a carpet. You cannot see any details. There is therefore a need to see from below as well; in essence to be able to discern the trees for the forest. This ability to see both from above and from below is another very important strategic skill.
c. Seeing beside and seeing beyond
Another term for seeing beside is to look laterally. Lateral thinking is a creative aspect of thinking made popular by Edward deBono. Hence, to see beyond the current frame, one needs to be able to see beside. In other words, one needs to apply creativity to get past the current situation as we strive to become more strategic.
d. Seeing it through
The final perspective really, is where the rubber will meet the road – to see the thinking through.
Hence, you will see that strategic thinking is the application of perspectives to understand the situation from all sides, to understand the underpinnings of the situation and from there to make the right decision.
The outcome of strategic thinking
Everyone knows that the outcome of strategic planning is the plan for the company that can stretch well into 5 or sometimes even 10 years. The outcome of strategic thinking is not too far off although it is not a plan per se but a decision. That decision must of course lead in to a plan in time. But that is not really the outcome of strategic thinking. In a sense, strategic thinking must lead into strategic planning.
So when one applies strategic thinking and sees his situation for what it is, it will allow him to make a better and more robust decision. A robust decision is one that can withstand the scrutiny of many eyes. In that sense, the multiple perspectives that strategic thinking gives to the decision maker will allow him to see his situation from those eyes and therefore come up with a better decision. After all, behavioural psychologists have identified many biases and heuristics that will impact a person’s ability to see things from all sides, and this causes him to make the wrong decision. Strategic thinking forces the decision maker to look beyond his current frame, ensuring that there is more balanced thinking before the decision is being made. There is therefore a critical element to strategic thinking.
Blending strategic thinking into decision making
Strategic thinking in and of itself may still be abstract. It needs to be wrapped up in the decision process in a seamless manner so that one applies strategic thinking whenever one is making a decision. This brought us to our Strategic Decision Making model, as expounded in this other page. When we present strategic thinking in this manner, we don’t need to grapple with the abstractness of strategic thinking, or the process to take. After all, strategic thinking is a way of thinking to get us to the right decision every time. In that sense, we have extracted the strategic thinking juice and blended it into this easy to digest form.
So if you want to think strategically, use our Strategic Decision Making framework.