• Strategic Thinking: 5 Principles for Business Success

    Strategic Thinking: 5 Principles for Business Success

    “You read a book from beginning to end. You run a business the opposite way. You start with the end, and then you do everything you must to reach it.”
    Harold Geneen, businessman (1910–97)

    How much are the business leaders of today governed by the rule of strategic thinking? For the successful ones, it seems like the answer is quite a lot. In 2013, a large global study carried out by Management Research Group (MRG) found out that strategic thinking was, on average, 10 times more important to the perception of a leader’s effectiveness than other behaviours. It was twice as important as the first runner-up, communication, and almost 50 times more important than hands-on tactics.

    So what is strategic thinking, and why is it seen to be so important? Surely the most important things if you want to be successful are simply commitment and graft; as William Hague put it, ‘There’s only one growth strategy: work hard’.  

    Of course, growth requires hard work – but there’s more to business success than this comment implies. There is a difference between driving full steam at whatever issue happens to be in front of you, and thinking strategically about which actions need to be taken and when.

    Strategic thinking involves thinking systematically – that is, how decisions will affect different parts of an organisation, as well as suppliers and customers – and in multiple time frames: what will we need to be doing in 3 months, 6 months, 6 years? It often means choosing what not to do, and being discerning about where your energies should be spent. Although it might seem like an encumbrance – why spend time planning, you might ask, when you could be getting on with things? – it is a proven way to increase an organisation’s long-term productivity, efficiency and turnover.

    If you are, or would like to become, a leader within your organisation, strategic thinking can help you on a personal career level as well. In the MRG study, the participants who scored well on strategic skills were six times more likely to be seen as effective leaders than their less-strategically-minded counterparts – regardless of their other qualities. The likelihood that they would be thought to have ‘significant future potential’ in their organisation quadrupled. Opinions in the boardroom back this up: 95% of the time, executives chose ‘strategic’ as the most critical leadership quality. Showing that you are a strategic thinker might help you to earn a place at the top of the ladder – and stay there.

    It might feel like we’re too far into 2016 to be making resolutions – but implementing a culture of strategic thinking will always be worth your while. To make this easier, we’ve collected some of the habits and approaches you can use to make strategic thinking a central part of your business.

    1.      Keep people informed about what is happening in the company and the industry. Strategic thinking demands a broad perspective: what is often called ‘peripheral vision’, rather than a blinkered approach to completing the task in front of you. This requires some awareness about what’s going on in other departments. One way to make it easier for employees to feel engaged with the bigger picture might be to release weekly or monthly bulletins, summarising key changes. This has the added benefit of engendering a more cohesive company culture – something that’s well worth doing in itself.

    2.      On the subject of Company Culture, create an ethos that rewards thinking, not reacting to situations. This might mean recognising when delegates make a considered decision to refrain from acting in response to a particular problem, or simply praising efforts to research and create strategy as much as you praise its implementation. 

    3.      Make anticipation a habit. It can be easy to become focussed on the stresses and challenges of the present, but a more forward thinking mindset can lead to more efficient prioritisation of tasks. More importantly, keep one eye on the horizon of your industry could leave you more alert to future changes than your competitors.

    4.      Think Critically. Lead by example in asking ‘why’ and ‘when’ questions, both when planning and implementing strategy. Making a habit of questioning the received wisdom of your industry will leave you more equipped to anticipate changes and distinguish your business from the rest of the pack.

    5.      Be flexible. No matter how much time you’ve spent crafting a seemingly flawless strategy, you have to make allowances for unexpected changes. Forcing yourself or your team to stick rigidly to a plan isn’t the answer; rather, aim to encourage strategic thinking on a day-to-day level in all your people.

    To find out more about how 5th Wall can improve your business’s effectiveness, click here