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Demonstrating Strategic Thinking: Essential Skills for Organizational Leaders


In today's complex and ever-changing business environment, strong strategic thinking is a pivotal skill for any organizational leader. Now more than ever, executives must be able to guide their companies through uncertainty and make insightful long-term decisions. However, demonstrating strategic thinking can be challenging without concrete practices and techniques.


Today we will explore how leaders can learn specific strategies for integrating strategic thinking into their day-to-day work.


Understanding Strategic Thinking


Before delving into demonstrations of strategic thinking, it is important to define the concept. Strategic thinking refers to the cognitive process of formulating strategies and making strategic decisions that will enable long-term success for an organization (Mintzberg, 1994). At its core, strategic thinking involves synthesizing information from a variety of sources, anticipating potential obstacles and opportunities far into the future, and determining flexible courses of action for guiding an enterprise (Rosenhead, 1998). Conceptual frameworks in the field of strategic management provide useful models for leaders to develop these thought processes.


Porter's Five Forces Framework


Michael Porter's Five Forces model has been used by strategists for decades as a tool for industry analysis (Porter, 2008). This framework prompts leaders to consider five crucial factors that impact an industry's long-term profitability: threat of new entrants, threat of substitute products or services, bargaining power of suppliers, bargaining power of buyers, and rivalry among existing firms (Porter, 2008). Applying Porter's model requires evaluating each force's influence on a company's situation and considering what steps could be taken to gain favorable positioning (Porter, 2008). Simply reviewing industry dynamics through this structured lens is one way leaders can demonstrate strategic thinking.


Scenario Planning


Scenario planning is another strategic management technique that fosters strategic thinking. This approach involves envisioning multiple potential future conditions that may result from uncertainty and important driving forces (Shoemaker, 1995). Rather than focusing on a single predicted outcome, scenario planning prompts leaders to consider how their company might adapt under various plausible scenarios (Shoemaker, 1995). Crafting two to four detailed scenarios, analyzing each scenario's impact, and outlining appropriate responses require integrating information from different functional areas to envision the long-term future (Shoemaker, 1995). Using scenario planning signals a leader's ability to think flexibly when facing uncertainty.


Demonstrating Strategic Thinking in Action


Having reviewed core concepts and frameworks, the following provide tangible methods leaders can employ to showcase strategic thinking within their organization and industry. With practice and discipline, these approaches can become second nature for any executive.


Developing Vision and Strategy Documents


One straightforward way for leaders to demonstrate strategic thinking is by articulating their vision and strategic plan through formal documentation. A company's mission, values, objectives, and high-level strategies establish its long-term direction and priorities (Thompson et al., 2018). Creating compelling yet realistic vision and strategy statements forces leaders to synthesize organizational capabilities, market dynamics, and future opportunities into a cohesive roadmap. Distributing and referring back to these documents signals the application of strategic analysis and decision making from the top down.


Leading Discussions on Strategic Issues


Whether at board meetings, senior leadership retreats, or one-on-one check-ins, fostering engaging discussions on strategic questions is another strategic thinking demonstration. When introducing strategic topics, leaders should outline relevant context and implications before facilitating open dialogue (Mintzberg et al., 2009). Strong facilitators reference previous points, probe unexplored areas, and encourage dissenting perspectives - all signaling their ability to understand multiple viewpoints on strategic uncertainties (Mintzberg et al., 2009). Summarizing recurrent themes and action items from the exchange culminates the display of strategic facilitation skills.


Conducting Industry and Competitor Analysis


Staying abreast of industry trends and competitors' activities through regular analysis is another method for showcasing strategic thinking. Leaders can demonstrate this skill by sharing analysis of industry reports, highlighting relevant news articles, or presenting findings from primary research (Porter, 2008). Discussing implications of industry shifts, changes in competitive dynamics, and new market entrants provide insights into a leader's comprehensive scanning abilities (Porter, 2008). Initiating strategic discussions based on robust analysis signals an ability to anticipate industry evolution and position the company accordingly.


Considering Different Perspectives in Decision Making


As strategic decisions can have widespread long-term effects, integrating diverse viewpoints strengthens the decision process. One way for leaders to demonstrate consideration of varied perspectives is scheduling pre-meeting discussions with direct reports (Nielsen & Nielsen, 2013). Asking direct questions to department heads enables comprehending implications across functions before strategizing (Nielsen & Nielsen, 2013). During meetings, probing assumptions, reasonably challenging recommendations and expressing reasoning behind viewpoints signals taking a strategic approach (Nielsen & Nielsen, 2013). This transparency fosters buy-in during execution of strategic choices.


Speaking Strategically in Public Settings


Presenting one's strategic thinking to external audiences through public speaking is another impactful demonstration. When discussing the organization's strategy, vision and challenges, leaders should convey a cohesive narrative that considers industry disruption, core competencies and future opportunities (Ghoshal, 2005). Referencing relevant contexts with clarity and conviction demonstrates familiarity with strategic concepts (Ghoshal, 2005). Addressing strategic questions from audience members with confidence provides further exposure. Public displays of strategic framing signal long-term perspective and situational awareness.


Industry Example – Unilever’s Strategic Leadership


A compelling example of demonstrated strategic thinking comes from Unilever, a global CPG conglomerate. In the 2000s, Unilever faced challenges from industry disruption and changing consumer demands (Thompson et al., 2018). CEO Paul Polman led a strategic overhaul by developing a comprehensive sustainability vision and emphasizing stakeholder responsibility over short-term profits (Thompson et al., 2018).


By conducting extensive stakeholder engagement, integrating sustainability into core operations and publicly advocating for long-term value creation, Polman signaled strategic reflection beyond quarterly earnings (Thompson et al., 2018). Unilever has experienced steady growth by addressing industry shifts proactively through Polman's demonstrated strategic leadership.


Conclusion


In today’s hypercompetitive environment, organizational leaders require robust strategic thinking abilities more than ever. While naturally developing over time and experience, strategic thinking skills can also be deliberately honed. This paper outlined essential frameworks for comprehending strategy concepts and provided tangible techniques for executives to showcase their strategic mindsets within their companies and industries. From vision development to public communications, strategic analysis to multi-perspective decision making, intentional application of these approaches bolsters comprehension of competitive landscapes and positions leaders to make insightful long-term choices. With continued focus on the methods discussed, executives can strengthen their strategic impact and steer enterprises forward during periods of volatility and disruption. Overall, deliberate demonstrations establish leaders as strategic visionaries who can guide organizations toward ongoing success.


References


  • Ghoshal, S. (2005). Bad management theories are destroying good management practices. Academy of Management Learning & Education, 4(1), 75–91. https://doi.org/10.5465/amle.2005.16132558

  • Mintzberg, H., Ahlstrand, B., & Lampel, J. (2009). Strategy bites back. Prentice Hall.

  • Mintzberg, H. (1994). The rise and fall of strategic planning: Reconceiving roles for planning, plans, planners. Free Press.

  • Nielsen, S., & Nielsen, B. B. (2013). Top management team diversity and firm performance: A multilevel exploratory study. Management Decision, 51(3), 561–581. https://doi.org/10.1108/00251741311309263

  • Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard Business Review, 86(1), 25-40, 141.

  • Rosenhead, J. (1998). Complexity theory and management practice. Science as Culture, 7(3), 345–372. https://doi.org/10.1080/09505439809526351

  • Shoemaker, P. J. H. (1995). Scenario planning: A tool for strategic thinking. Sloan Management Review, 36(2), 25–40.

  • Thompson, A. A., Jr, Peteraf, M. A., Gamble, J. E., & Strickland, A. J., III. (2018). Crafting and executing strategy: The quest for competitive advantage (21st ed.). McGraw-Hill Education.

 

Jonathan H. Westover, PhD is Chief Academic & Learning Officer (HCI Academy); Chair/Professor, Organizational Leadership (UVU); OD Consultant (Human Capital Innovations). Read Jonathan Westover's executive profile here.


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