The sentiment comes through as a consistent complaint from CEOs. It sounds like this: “What we lack in this organization is strategic thinkers” or “It’s hard to get the executive team to think strategically” or “What’s holding us back is a lack of strategic thinking.” In consequence, CEOs worry strategic opportunities are passing them by and the organization will be left behind.
The knee-jerk reaction is to get in some training to teach managers to “think strategically”. It’s simple. Business spends a fortune on training managers to think this way. But what if the solution isn’t about training? Wouldn’t that change your allocation of time, effort, and money?
Tapping into Strategic Thinking
My research and years of consulting experience suggest that there are five drivers of strategic thinking in a business. You can think of these as expanding concentric circles from the individual manager to the wider organization.
Manager knowledge. One of the impediments to strategic thinking in an executive team is a manager’s lack of awareness of his or her business environment. This produces personal blind spots which induce managers to think operationally (focusing on efficiency) rather than strategically in four key areas – industry changes, industry trends, competitors, and competitive advantage.
Manager behavior. This driver shifts from knowledge to action and includes the effect that a manager’s behavior has on staff. For example, when key conditions change some managers enjoy looking for solutions and adjusting plans, others would rather stick their heads in the sand.
Boss’s knowledge. It’s clear that an executive team’s disposition to think strategically is affected by its leader’s knowledge around strategy. For example, if a boss appears unaware of the long-term changes in the industry or seems unsure who the competitors are, this rubs off on subordinate managers.
Boss’s behavior. In the same way, a boss’s actions impact subordinate managers’ strategic thinking. If a department manager or CEO shies away from anything to do with strategy or doesn’t encourage, promote, and recognize strategic thinking, it won’t happen.
Organization systems. Features of an organization either encourage or inhibit strategic thinking. For example, whether an executive team is composed of people with diverse perspectives; the quality of information about company competitiveness; the kind of performance measures applied by a business; whether these metrics tap into organizational outcomes; and whether the business encourages taking a long-term view of results as well as a short-term one.
Your Steps to Improved Strategic Thinking
Consider these results from managers at an air conditioning manufacturers and installers annual conference. There were 78 managers registered for the conference each from different organizations from whom we received 62 responses. The results are instructive and suggest actions that will take you towards improved practice.
Our strategic thinking survey involves 32 statements used to assess the strategic capacity of any group of managers and links this has to an organization’s structure and culture. It takes around eight minutes to complete with responses placed on a zero to ten scale with ten being “completely” or “always.” While the items cluster around the five drivers, they are randomly distributed on the form itself.
The mean score from the survey for all 32 statements was 7.55 and the range was 5.30 to 8.71.
Allocate time. The lowest score for all 32 statements was for a manager-behavior statement: “I allocate regular, specific time with my team to develop new products or services.” This was backed up by the lowest score for “boss’s behavior ,” for the statement: “My boss allocates regular, specific time with my team to develop new products or services.”
The message here is clear. If you want strategic thinking in your organization you must allow specific time for it to happen. It won’t spring spontaneously from the day-to-day grind and no amount of training in strategic thinking will change this circumstance. So, design your organization’s routine in such a way that time is put aside for your managers to address strategic issues on a regular basis. Make sure you don’t let day-to-day operational issues encroach on this precious time. Otherwise, the daily grind will simply take over and strategic thinking will be long gone.
Encourage “odd” ideas. Research has shown that managers are in a bind when it comes to encouraging new ideas from direct reports. This springs from sitting on the middle rung in their organization’s structure. Firstly, they don’t feel empowered to act on the novel ideas from below as their agenda around efficient performance is proscribed from above. Secondly, they feel compelled to adopt a short-term outlook on their work because of the way their performance is assessed.
The results from our survey back this up with another low-rating score for the statement: “My boss encourages new ideas from staff, even if the ideas appear odd at first.” The message here is that if your organization emphasizes conformity don’t expect original thinking. Training alone won’t counteract conformist pressures. Also, tap into the state of psychological safety (the confidence that candor and vulnerability are welcome) in your work environment. If it’s risky to be a pioneer, address this.
Provide high-quality information. Our survey found that the workplace information systems were also not working well. Of the ten statements that tapped into “organization systems” the lowest score was for the statement: “The information provided by my organization on changes and trends in my industry is comprehensive.” This is in concert with other research which found that the lack of quality, timely data was holding back managers’ strategic thinking.
Training your managers in “strategic thinking” will have no impact if they lack the required information to make strategic decisions. Worse, they’re likely to become frustrated if they’re trained in something and not given the resources required to do it. So, take time to work out, with your managers, what they need to get across changes and trends in your industry. Engage them in that conversation and don’t confine them to input about operational matters alone.
Allocating Your Money and Attention
While these results can only be regarded as indicative they accord with other research on leadership which suggests that “leadership training fails” because “context sets the stage for success or failure.” The authors of that research state that “it’s important to attend to organizational design and managerial processes first.”
Likewise, training managers in “strategic thinking” may simply be a waste of time and money. While most managers are born strategic thinkers, and many exhibit this capability away from their workplace, they switch this off when they come to work.
Why? Put simply, colleagues, bosses, and organization systems put the brakes on managers’ willingness to think that way.
So, instead of continuing to pour funds into strategic thinking training, start by reconfiguring the environment in which your managers work. Change that and your strategic thinkers will blossom.
