strategic thinking

1. Strategic Thinking
Session 1

2. AGENDA
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What is the Strategic Thinking?
Evolution of Strategic Management
Evolution of Thinking in Management
Elements of Strategic Thinking
Levels of Strategic Thinking
Strategic Thinking Process

3. What is Strategic Thinking?

4. What is Strategic Thinking?
• Strategic thinking is defined as a mental or
thinking process applied by an individual in
the context of achieving success in a
game or other endeavor.
• It‟s a cognitive activity.
• It produces thought.

5. What is Strategic Thinking?
• When applied in an organizational strategic
management process, strategic thinking involves the
generation and application of unique business insights
and opportunities intended to create competitive
advantage for a firm or organization.
• It can be done individually, as well as collaboratively
among key people who can positively alter an
organization's future.
• Group strategic thinking may create more value by
enabling a proactive and creative dialogue, where
individuals gain other people's perspectives on critical
and complex issues. This is regarded as a benefit in
highly competitive and fast-changing business
landscapes.

6. Evolution of Strategic Management

7. First Phase: CEO Era
• The first phase in the evolution of the strategy
paradigm involved “basic financial Planning”
in the 1950s where the typical planning focus
for the firm was the Preparation of the
financial budget with a timehorizon barely
beyond 12 months.
• The success of the organization was
dependent on the quality of the CEO and the
top management team and their knowledge
of products, markets and rivals (Gluck et al.,
1980).

8. Second Phase: Forecast Based Planning
• The second phase of “forecast based
planning” in the 1960s resulted in
organizations embracing a longer time
horizon, environmental analysis, multi-year
forecasts and a static resource allocation as
the firm responded to the demands of growth
(Gluck et al., 1980).

9. Second Phase: Forecast Based Planning
• Introduction of SWOT analysis by Andrews
• He described the strategy as “…the
pattern of major objectives, purposes or
goals…stated in such a way as to define
what business the company is in or is to
be in and the kind of company it is or is to
be”

10. Fourth Phase: The Change Era
• The change from Strategic Planning to
Strategic Management
• The raise of the importance of the firms
internal resources and capabilities in
creation of competitive advantage!

11. Fourth Phase: The Change Era
Key Characteristics:
• A planning framework that cuts across
organizational boundaries and facilitates
strategic decision making about customer
groups and resources.
• A planning process that stimulates
entrepreneurial thinking.
• A corporate values system that reinforces
managers „commitment to the company
strategy”

12. Fifth Phase: Raise of Strategic Thinking
Strategic Thinking becomes the essence of
strategic management:
• 1. Changing concept of strategy;
• 2. Changing process of strategic
formulations;
• 3. New tools of strategy analysis
(Grant, 2010, 25).

13. 1950:
Financial
Budgeting
1960s:
Corporate
Planning
1970s1980s:
Strategy as
Positioning
1990s:
Quest for
Competitive
Advantage
2000s:
Strategy for
New
Economy
2010s:
Strategy for
the New
Millennium
Evolution of Strategy Concept

14. From Mechanical to Strategic Mindset!
EVOLUTION OF STRATEGIC THINKING

15. Subjects
Thinking Process
Evaluation
Solution
Results: Rearrangement of the factors
Mechanical Thinking!

16. Subjects
Thinking Process
Evaluation
Solution
Results: Regional optimization or seeing the
trees instead of forest!
Intuitive Thinking!

17. Subjects
Thinking Process
Evaluation
Solution
Evolving or changing the place of the factors!
Strategic Thinking!

18. ELEMENTS OF STRATEGIC THINKING

19. Intelligent
opportunism
Intent Focus
System
Perspective
Thinking in
time
Strategic
Thinking
Hypothesis
Driven
Model of the Elements of Strategic Thinking

20. System Perspective
• A strategic thinker has a mental model of the
complete system of value creation from
beginning to end, and understands the
interdependencies within the chain.
• The systems perspective enables individuals
to clarify their role within the larger system
and the impact of their behavior on other
parts of the system, as well as on the final
outcome.

21. System Perspective
• This approach addresses, therefore, not only the
fit between the corporate, business, and functional
levels of strategy, but very importantly, the person
level.
• From a vertical perspective, strategic thinkers see
the linkages in the system from multiple
perspectives and understand the relationship
among the corporate, business, and functional
levels of strategies to the external context, as well
as to the personal daily choices they make. From
a horizontal perspective, they also understand the
connections across departments and functions,
and between suppliers and buyers.

22. Intent Focused
• Strategic intent provides the focus that allows
individuals within an organization to marshal and
leverage their energy, to focus attention, to resist
distraction, and to concentrate for as long as it
takes to achieve a goal. In the disorienting swirl of
change, such psychic energy may well be the
scarcest resource an organization has, and only
those who utilize it will succeed.
• Therefore, strategic thinking is fundamentally
concerned with, and driven by, the continuous
shaping and re-shaping of intent.

23. Thinking in Time
• Strategy is not solely driven by the future,
but by the gap between the current reality
and the intent for the future, by connecting
the past with the present and linking this to
the future, strategic thinking is always
“thinking in time.”

24. Hypothesis Driven
• It mirrors the “scientific method”, in that it deals
with hypothesis generating and testing as central
activities. Because it is hypothesis-driven,
strategic thinking avoids the analytic-intuitive
dichotomy that has Long Range Planning
characterized much of the debate on the value of
formal planning (liedtka, 1998).
• Strategic thinking is both creative and Critical, in
nature. Figuring out how to accomplish both types
of thinking simultaneously has long troubled
cognitive psychologists, since it is necessary to
suspend critical judgment in order to think more
creatively.

25. Individual
• 1. A holistic
understanding of
the organization
and its
environment;
• 2. Creativity;
• 3. A vision for the
future of the
organization.
Organizational
• 1. Foster ongoing
strategic dialogue
among the top
team;
• 2. Take advantage
of the ingenuity
and creativity of
every individual
employee.
LEVELS OF STRATEGIC THINKING

26. Ask
Clarify
Consider
Reframe
Simplify
The Process of Strategic Thinking