Developing Strategic Thinking To Achieve Competitive Advantage

Overview

Strategic thinking is the capacity to think on a macro and micro scale, long and short term, and into the legacy cases with a focus on reshaping the present landscape. Although everyone in a company may benefit from strategic thinking, it gets more and more crucial as you ascend the ladder. In fact, without it, you can find it challenging to advance in your career or be successful as a leader. It's crucial to take the initiative and develop strategic thinking skills. This toolkit guides managers and leaders on how to apply strategic thinking to influence the direction of their teams and find solutions to pressing business issues. Moreover, it covers how to set up a time for strategic thinking, gather data, draw lessons from the past, develop a vision for the future, and integrate strategic thinking into your team.

See. Understanding Organizational Development (OD) From Specialists’ Lens

Adopting the Strategic Mindset

Anyone’s progress might stagnate and finally degrade if they continue to perform things without inquiring. How can you cultivate this skill? It is not a one-time task where you design a strategy and stick to it indefinitely. You must adapt your strategy as the conditions change. This is where strategic thinking is required. Reassessing new knowledge/information and making appropriate adjustments must become a way of life. Leverage the following actions to develop a strategic mindset.

Inquiring into presumptions comes first. Make it a practice to inquire why we do things a certain way. You may frequently find novel concepts and efficiencies that others haven't even considered if you can carefully examine routines and behaviors. For instance, for the sales personnel, wouldn't the second part of orientation be more effective if it was held in a field office? Wouldn’t it be wise to incentivize employees, not just for performances but also for the company values and leadership traits that employees exhibit? Asking the right questions may occasionally reveal enormous possibilities.

Observing comes next. Modern corporate life is much about doing, moving quickly, multitasking, and achieving more. This frequently results in missed opportunities. Spending all of our time doing keeps us from properly refining what we are doing since it prevents us from observing others or ourselves from which we might learn. Even more importantly, we aren't taking note of the broad picture, the macro patterns, or how organizational components interact. Knowing where and how you and your business might achieve a competitive advantage frequently depends on your ability to perceive what others aren't even looking at.

The final step is reflection. David Allen, a proponent of productivity and author of "Getting Things Done," said, "To have a breakthrough idea, it doesn't take time. It takes space." This implies that a brilliant realization can strike in an instant, but it doesn't happen very often since we are too busy or distracted to allow it to. To mentally clear the decks, we must learn to be present, reflect on our experiences, discuss fresh concepts, and just sit with our thoughts. That is the way creativity works. We may start to develop a strategic thinking mindset by challenging presumptions, paying attention, and reflecting.

Naturally, each team must have its own strategies in place in order to carry out the objectives of the company. For instance, if your company is growing in Mumbai, HR may need to concentrate on employing or preparing existing personnel to have a grasp on the regional market and culture, operations may need to rent office space in Bandra or Juhu, and marketing may want to begin holding focus groups in the area.

See. Human Sigma At The Epicentre Of Holistic Business Strategy

Corporate Strategy vs. Business Strategy

What if your company management needs a master plan that can lead to the long-term success of your organization? Well, this is when you will design a corporate strategy, which refers to the top management plan holistically encompassing the organization. Now, what about a business strategy?

You might face certain challenges while implementing your corporate strategy that impacts the entire organization. A business strategy addresses these concerns. It is a specific plan of action that enables enterprises to realize a certain corporate goal.

A successful business strategy must help attract new investors, mainly by familiarizing creditors with the financial health of the business. The below grid will help you distinguish between business strategy and corporate strategy.

Types of Corporate Strategies

It will be easier to plan a corporate strategy once you have a view of and have defined leadership within your organization. It will be helpful for you to familiarize yourself with some of the popular types of corporate strategy, as explained below.

Stability Strategy: It is developed with the intent to maintain the current market position and share by operating in the same industry with an existing suite of products and services. This corporate strategy type offers modest and sustainable growth.

Expansion Strategy: It revolves around launching a new line of services and/or products, expanding the business into new markets, and more. It talks about innovation.

Retrenchment Strategy: This is developed for damage control or to reduce losses. It involves remedial action.

Combination Strategy: It involves combining different corporate strategy types in the right balance instead of focusing on only one. This is the most used strategy type by large organizations and multinationals.

The Framework of Strategy - Goals and Tactics

After you have a strategy in place, it's time to consider your goals. How do you operationalize your plan? For example, conducting a campus recruiting drive can be the best course of action if you need to fill multiple positions with freshers across functions. Or if your goal is to complete and submit a critical report once every week. Your tactic could be to block an hour in your schedule each morning before you start work or follow a piecemeal approach to fill parts of the report each day while commuting to the office instead of listening to music.

There can be many possible ways to achieve your strategy. The ones you pick become the goals that you work to accomplish. Big goals are often too complex and require numerous steps. To make sure you don't get distracted, it's crucial to be clear on your tactics so that you don't get lost or side-tracked. For instance, if you are working on measuring training effectiveness to get views on a particular training program, the tactics could involve securing informational interviews with business line heads who enrolled in the program to gauge how effective the program was and simultaneously sampling participants from each function to monitor their post-progress effectiveness.

Tactics are the concrete actions you undertake to achieve your goals that will ultimately shape your strategy and, therefore, your vision will come to life. Thinking strategically is a virtue but execution is paramount. In order to execute strategy, you must understand how its components fit together and what goals and tactics you must use to accomplish it.

Strategic Thinking Demands Time

Here are a few ways to build time for strategic thinking into your schedule. Please refer to the checklist to help you with this.

See. Make Time for Developing Strategy

1. Turn off the noise. We often fill up every spare minute with information and distractions. Instead, once every week, turn it all off and be deliberate about asking yourself the targeted questions. What do you want to accomplish? Will your HR objectives support company goals? Are you headed in the right direction? Giving yourself space on a regular basis can yield insightful breakthroughs.

2. Create a weekly calendar. Nearly all of us have some degree of control over our calendars, and we can choose to exercise it more purposefully. Take just an hour a week, maybe late Friday evening, when the workweek is about to end. Block that time out on your schedule each week and treat it as a serious commitment. Make that your strategy time to think about the big picture and experiment with the best place to do the thinking. Expand this habit to your team and make them come up with solutions to ongoing problems. Guard the time, and don’t let the activity get suspended.

3. Enlist an accountability partner. Commitments are easier to keep if you have an accountability partner. If you have a reliable buddy or coworker, who would be interested in honing her strategic thinking abilities, you could schedule a regular meeting, once every week or month, to collaborate online or offline, brainstorm, and discuss ideas. At the end of every week, get in touch with your buddy to verify and track your progress. Again, encourage and empower your team to follow this as well.
   

Learning to Broaden Your Horizons

To be a strategic thinker, you must look beyond the present, beyond the day-to-day. You must assess the future by examining patterns and anticipating potential outcomes, as well as analyze the past in order to learn from it. Here's how to get both talents down pat.

No one's foresight is perfect when it comes to the future. All you can do is speculate. With practice, your assumptions become far more informed and nuanced. One important element is recognizing both macro and micro trends that will impact the business or the HR function, such as the rise of hybrid working, spiking demand for equity and inclusivity, a growing passion economy and gig work, or even a pandemic situation.

You can be far ahead of others by staying on top of the trends, so when disruption hits, you not only have a plan but are already executing it. To effectively monitor trends, read general and industry-specific publications. Identify people who are well-informed. It can be an industry expert, a thought leader, a person who works at a think tank, or even a reporter you run into at events. Inquire about what interests, excites, or concerns them, and learn from their insights.

Scenario building is a powerful process mostly popular with the military. The process involves mapping out, writing down like a story, various probable outcomes that the future could play out. A scenario is unlikely to happen precisely as you imagine it, but pieces of multiple scenarios might well happen, and identifying possible weaknesses or opportunities early on can allow you to plan more effectively for them.

Most of us are good at identifying explanations, but after we find one that's plausible, we stop seeking. In fact, there may be numerous reasons something happened. For instance, if the company made bad hiring, it could be because the line manager felt threatened and turned down the best suitable profiles, the HR team didn’t get adequate time to search and source rights profiles, and various hiring sources were not appropriately tapped in the race to fill the position quickly and complete the targets without missing on the deadline. We need to train ourselves to draw answers that represent the whole story and ask ourselves if there is more that we should be aware of. Becoming good at strategic thinking means taking stock of the present, developing an intuition about the future, and having a crystal-clear understanding of the past.

Creating An Informed Strategy

A strategy must be informed. Faulty assumptions cannot result in desired outcomes. Let us explore the ways to be smart and nuanced in your strategic thinking.

First, a good strategy doesn't necessarily have to be innovative. Though it can be transformative. A good strategy is about making the right choices that don't have to be unique. Review historical records and note what's worked before, and that might give a useful guide and direction for the future. Be informed about what your competitors are doing; there is probably a good reason for it.

Second, explore your industry-specific future trends. Ask. What do you suspect the next breakthrough in your industry or HR is going to be? How can you most likely achieve this breakthrough? This will offer you a clear picture of where you could be underinvesting and where you might reallocate your resources or attention. Intuit about where things are heading and position yourself advantageously to be the first to reach there.

Finally, make sure you're soliciting input from diverse sources. It's tempting to rely on your own opinion or a tight little circle of people from inside your company. But to get wider insights and trends, seek inputs from employees of other companies about what they find valuable. Interview other HR experts about what they foresee. Attend conferences and events to meet like-minded people and learn from their opinions and stances. The issue with strategic blind spots is that you have no idea you're missing something, and therefore, you don't even know to look for it. Nevertheless, by making it a practice to bring in new perspectives, you may increase your chances of detecting blind spots.

Making Strategy Come to Life

A smart strategy in principle isn't much assistance in practice. You want your strategic thinking to be relevant and practical, and that is why it must be put to the test to know what would work best in the real world. Here's how to go about it.

First, map out your organization’s assets and allies. What repertoire of skills, knowledge, or experience does it possess? If your company wants to expand in UAE, say, Dubai. Recruiting a workforce speaking Arabic is going to be a huge plus. What relationships or allies can you tap into? Engaging on social media with the regional people in Dubai is a good tact, to begin with. Perhaps you have a college acquaintance who is now a company leader in Dubai and can provide you with on-the-ground intel on the country's market situations. Keeping track of your assets and allies allows you to see how you can leverage them to your advantage.

Next, give yourself a reality check and take note of the constraints that you might face. It could be people related, structural, or even cultural. Perhaps there is an operations head who wants to deploy his own guy in Dubai rather than a person that you, as HR, believe will be the best choice. Or maybe you are unable to find local, regional talent willing to work in an India-based company. Or perhaps your company believes in hiring local candidates as against your plan to prepare and promote earmarked employees to strategically important positions in Dubai. You know these earmarked people have relevant experience, exposure, and enthusiasm, but it's hard to convince management about your viewpoint. Taking stock of the challenges helps see how you can begin to overcome or work around them.

Lastly, break your strategy down into specific steps, develop specific goals, and identify the tactics to use to make your strategy come alive. For example, you want to be a strategic partner in your company’s goal to expand business in Dubai. Your goal might be to make a specific person land a specific leadership role in the team. And your tactics could be, over the next four months, understanding who makes the hiring decisions and making sure your allies recommend that person. You can also suggest/arrange training for that person to refresh their Arabic and spend time researching the UAE/ Dubai market through study, research, and informational interviews to hit the ground running. Thinking strategically is not enough, it must also be realistic and attainable.

See. Framework of Organisational Development (OD) From Specialists’ Lens

Involving People

It is good to plan strategically on your own, but you cannot always achieve your goals by yourself. It is best to have the agreement and backing of your superiors, co-workers, and staff.

First, avoid unveiling your approach at the strategy meeting if you are still at the formulation stage. Make an effort in advance by methodically briefing key individuals to gather their thoughts and views and to allay any potential worries.

The second crucial step in mapping out your strategy is identifying potential objections and coming up with thorough responses. Put aside time to think about the arguments people might raise against you on the way and brainstorm ways to deal with them.

Finally, you should set up a system to keep your team players accountable. This would entail following up on each meeting with an email summarizing what was decided and who is in charge of what. On a macro scale, it entails regularly reiterating your timelines and the markers on the route and ensuring there is no slippage en route.

Step back and reflect if your strategy creates a value chain for people. Identify the value creation for people and destruction factors and determine what needs to be changed, repositioned, or redesigned. Make technology and analytics your supporting partner for designing and deploying solutions. Do check the link below for a detailed understanding of how to involve or leverage people in the process of strategic thinking.

See. Human Resource Management: From Support Function to Strategic Partner

Measure Progress and Success

How will you gauge whether your strategy is on the correct track? You developed it with the best of intelligence, accounting for all the facts and factors at the time. But circumstances change and evolve, and so should your strategy. Below is a three-step approach that can be put to use to measure progress.

First, picture the outcome that you assumed. You can't tell whether your strategy is working if you are unsure about what success will look like. For instance, if you want to know whether the staff is taking your newly launched training program seriously. Keep the analytics handy about - How many people are attending it and how many already have completed it? How many mentions are there in the company’s social platforms, or how many people are enthusiastic about it? Whether the talks are negative or positive? What is the feedback? Only by assuming the outcome can you realistically discern how you're doing and whether it's time to adjust your approach.

Second, assess your progress at regular intervals. Creating long-term annual plans might not be a useful habit anymore in these fast-moving times. Create quarterly plans instead. They are nimbler and adaptable to evolving environments. It is essential to predetermine milestones at regular intervals (quarterly or otherwise) while developing a strategy where you can evaluate progress against your assumptions. For example, evaluating progress/performance after each batch completes training, each time after fifty percent hiring for every project is achieved, after every batch of onboarding, etc. The trick is to plan ahead of time when and how you will track your progress so that it is not overlooked while you are in the thick of implementing, particularly during tumultuous times.

Lastly, document your processes. Remember, you are engaged in strategic thinking because you want to get better at making smart decisions. Aim to learn and improve over time. However, you don't get to be a better recruiter by closing a few dozen positions following a lousy way. You get to be a strategic recruiter by enhancing your networking and people engagement skills and examining your bad hires to learn what went wrong and how to improve it. Make constant learning a deliberate practice. Similarly, you may learn to make wiser decisions and build sharper strategies by reviewing your assumptions, comparing them to marked milestones, and recognizing where you are overconfident and where you have blind spots.

Every Strategy Has Limits

Everyone has a plan until the going is good. What if something happens that was not anticipated at all? What if your company gets acquired and the hiring and promotion system changes, or you are asked to drive HR for a location that is completely strange for you, say, Australia? A strategy is tremendously useful under regular circumstances and known possibilities, but it has limitations when something unexpected occurs. That is where the true value of strategic thinking lies since it is more than simply a fixed plan; it is the capacity to think strategically while adapting to changing conditions.

First, stop clinging to past assumptions and take new data into account. In case of a disruption when your expectations have blown up, accept that, so you can quickly move to formulate a new plan.

Next, respond decisively. Move swiftly, and don't let the condition worsen. It does not mean that you drastically overhaul the strategy in an hour, but if a crisis is unfolding, take steps to mitigate the situation. It may involve sending out a message to employees saying management is aware of the situation and HR will provide every possible support to employees during a pandemic.

Finally, embrace improvisation. Consider the vision for your organization or employees and recognize that if the current strategy no longer works, you can scan the horizon and devise another one that will help you accomplish your vision. Strategic thinking also involves recognizing the limits of a given strategy and being willing to come up with a new one.

Habituating Thinking Strategically

Strategic thinking is not a once-in-a-while task. Set a course and keep at it ongoing. Don't let a change in circumstances cause you to veer dramatically off course. As a rule of thumb, if you've taken the time to develop a thoughtful strategy, stay with it rather than bouncing from one thing to the next based on whims.

Ask yourself- Are you failing to meet your initial expectations? This is the most evident situation where a strategy shift may be warranted. For example, you assumed 300 individuals would sign up for the program, and only 55 did. It is critical not to jump to conclusions and scrap the plans immediately. First, examine your tactics; perhaps your marketing was ineffective. If you examine and everything else checks out, the initial premise had flaws, and you should adjust your strategy and offer a new program instead.

See if it is a case of a major shift in circumstances. Sometimes unexpected things happen, and we have to adapt to the repercussions. For instance, after months of work, you are on the verge of closing an extremely critical leadership position for a crucial project, and the candidate suddenly blew the contract and decided to join your competitor instead. Now is the right time for a change of strategy. You need to identify an in-house resource and engage him in developing his skills immediately to prepare him to lead the project. Or make use of the opportunity marketplace and incentivize/encourage the gig workers to volunteer to take up the new role. Develop a new corporate campus to overcome such dire situations just in time and to train all qualified applicants for the new role. Roll out an assessment to shortlist the best candidate out of all who applied.

Consider what would cause you to quit a strategy that is operating well. It is conceivable that you might find a better opportunity and get excited about it. But do not get yourself into believing you can pursue both opportunities simultaneously and equally well. If you're absolutely persuaded, conduct a test to determine whether your theory holds up, and don't make any decisions without consulting your trusted colleagues and advisors first. To switch away from a strategy that is already working well, the bar must be very high. Moreso, it must be done sparingly and strategically.

Related Studies and Resources

Making decisions strategically is a competitive advantage capable of paying handsome dividends to a company and its workforce in due course. Here are some of the essential studies and resources to help you inculcate strategic thinking and create order and structure in your decision-making.

1. Checklist: Make Time for Developing Strategy
2. Infographic: 5 Brainstorming Tips
3. Infographic: 5 Way To Adopt A Strategic Mindset
4. Human Resource Management: From Support Function to Strategic Partner
5. Human Sigma At The Epicentre Of Holistic Business Strategy
6. Understanding Organizational Development (OD) From Specialists’ Lens
7. Framework of Organisational Development (OD) From Specialists’ Lens