LESSON 1 of 5

Understand Strategic Thinking

To stay ahead of the competition, you need to look beyond your daily tasks to create opportunities for the
future. Learn the importance of thinking strategically—whatever your role in your organization.

What is strategic thinking?

Whatever your role, you have many responsibilities, including planning, executing tasks, and perhaps leading a
team. But to bring the most value to your organization—and advance your career—you also need to be able to
think strategically.
Strategic thinking is a way of looking at your work with a broader focus and longer time frame than usual.
When you think strategically, you:
 Take a break from your daily activities and ask yourself questions like, “Why am I doing this task?” “How
can I do my job better?” and “Is my work supporting the organization’s strategic priorities?”
 Identify trends that might influence where your business unit and organization should be heading to best
serve your customers.
 Challenge assumptions about how things work in your department, organization, and industry.
 Look for signs of emerging opportunities and challenges and prepare fordifferent possible outcomes.
 Use the insights you gain to make smart choices about which activities to pursue—and which not to—and to
bolster your contribution to your organization’s success, both today and in the future.
You do these things with the goal of generating the best possible results for you, your department, and your
organization.
T O OL

Strategic Thinking Self-Assessment

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F R O M T H E C OL L EC T I ON

Why is strategic thinking important?

In today’s business environment, a narrow focus on daily tasks can result in short-term accomplishments but
fail to position you and your organization for long-term success. In contrast, studies show that people who think
strategically are among the most effective leaders. *
Some of the benefits you reap when you think strategically:

 You learn to use resources effectively and avoid costly mistakes.

 You make well-informed decisions and solve problems creatively.
 You prepare your team to take advantage of emerging trends—or to minimize the damage caused by
unforeseen events.
 You help your organization differentiate itself from its competitors and adapt to shifting conditions and
demands.
Organizations that don’t make strategic thinking a priority throughout the ranks run the risk of becoming
obsolete. Through strategic thinking, managers create the future rather than letting the future happen to them.

Strategic thinking and strategic planning

To remain competitive, an organization needs both strategic thinking and strategic planning.
 In strategic planning, leaders gather performance data and information about changes in the internal and external
environment. Through a series of meetings, they design the roadmap that guides how people through the
company:
 Set priorities

 Allocate resources and

 Plan actions to achieve key goals *
They then communicate that strategy throughout the ranks, where teams and business units take responsibility for
executing it.
With strategic thinking, employees at all levels and in all functions continually scan for new ways to contribute to
the organization’s success. They apply those insights as they carry out organizational priorities and provide input to
the overall strategy.
Strategic plans that lack a visionary, long-term view keep a company trapped in the past. At the same time,
strategic thinking can’t shape an organization’s future without a plan for putting insights into action. The
combination of strategic thinking and strategic planning determines the direction your organization is heading and
the steps for getting there.

The Difference Between Strategic Planning and Strategic Thinking

To remain competitive, an organization needs both strategic planning and strategic thinking. No matter where you are in the
organization, your job includes strategic thinking.

Who needs to think strategically?

Everyone in an organization must know how to think strategically. Only then can the company leverage the full
range of creativity and knowledge embodied in its workforce.
Strategic thinking is not something you do exclusively on your own. You also benefit by seeking other people’s
perspectives on complex issues. By drawing on each other’s expertise, points of view, and questions, you and
your peers make better decisions and take more effective actions.
EXAMPLE

Lucy works in accounts receivable and is working to update the company’s billing system to take advantage of important new
features. She realizes she needs to think beyond her department’s needs to consider the impact on others in the organization.
Through a conversation with Oscar in marketing, Lucy learns that the updated system will have significant consequences for
package design, since all designs will need to incorporate a larger bar code. As part of launching the new billing system, Lucy
now includes time in the schedule for package redesign.

Everyone Needs to Think Strategically

Anne Manning—Founding Partner, Drumcircle, LLC, and Instructor, Harvard University
By practicing strategic thinking, managers at all levels know where they're going and how to get there.

Characteristics of strategic thinkers

Managers who think strategically demonstrate specific characteristics. The good news: You likely already
possess many of these traits and can learn the ones you don’t. And by being aware of your gaps, you can make a
point of including people on your team who have complementary strategic thinking skills.
Strategic versus conventional thinkers

Strategic thinkers are . . . Conventional thinkers are . . .

Proactive: They anticipate change and look for
opportunities.
Curious: They are interested in what is going on
throughout their department, organization, industry,
and the larger business environment.
Focused on the long term: They are willing to invest
today to gain a better outcome tomorrow.
Open: They aren’t limited to past or current thinking
and are willing to try new methods.
Able to prioritize: They don’t equate being busy with
being effective. They place a high value on projects
with the potential for great impact and return.
Flexible: They are able to adjust and modify their
approaches.
Committed to lifelong learning: They proactively seek
knowledge and skills and are willing to teach others.
Creative: They consider unorthodox ideas.
Reactive: They rarely initiate ideas and wait to be told
what to do or what actions to take.
Isolated: They typically work without input from others
or without understanding others’ goals and objectives.
Focused on the short term: They often fail to consider
the potential impact of an action on long-term goals.
Cautious: They fear changing or challenging the status
quo.
Unable to prioritize: They often treat all tasks equally,
without regard to impact.
Inflexible: They may be unwilling to alter their plans
even when adjustments could yield a better return.
Satisfied: They normally are not interested in learning
new things or methods, and are content with their
current capabilities.
Predictable: They often stick with familiar paths.

Stay Open to New Ideas

Mason Weintraub — Director, Digital Engagement, Oxfam America
To be a strategic thinker, stay open to new ideas, wherever they may come from.

Strategic thinking as a habit

Taking the time to think strategically may seem like an unnecessary luxury. But to bring added value to your
organization, you must work not only in the business but also on it. Without strategic thinking, you’ll continue
 to do what you’ve always done, the way you’ve always done it, and fail to respond to changing customer needs
and industry practices.
To make strategic thinking a habit:

 Recognize it as a key aspect of your job. Rather than detracting from your ability to get your job done,
strategic thinking can make you more productive in the long run. When you reflect on your organization and
your role, you’ll identify smart new ways to approach your work.
 Free up time by delegating. If you have too many responsibilities to practice strategic thinking, then it’s time
to delegate. Identify tasks that you can pass along to someone else. You’ll free up some of your time and help
them develop new skills.
 Put it on your calendar. Regularly set aside blocks of time for research and reflection. You could reserve as
much as an hour a day or as little as one day a month. During that time, don’t respond to emails or phone calls,
and limit distractions.
 Capture your ideas and questions. When you reflect on opportunities and challenges, you’re likely to be
flooded by creative thoughts. Take notes or make sketches of ideas as they come to you.
 Meet with a partner. Identify someone to talk with about strategic issues. You can help each other keep your
commitment to practicing strategic thinking. Also, your partner is likely to have information or different ways
of thinking that might your expand your perspective.

Take Time to Think Strategically

Nina Bowman—Executive Coach and Managing Partner, Paravis Partners
You’ve been asked to be more strategic in your role. Begin by setting aside time to think.

Encourage others to practice strategic thinking

People who practice strategic thinking are able to make better decisions and take more effective actions than those who
don’t. To help your team sharpen their skills in this area:

 Encourage people to see strategic thinking as part of their job. Support them in finding time for reflection and
research during their workweek.
 Communicate the organization’s strategy. When employees understand the company’s philosophy, mission, and
goals, they can make the connection between their work and the organization’s strategic priorities.
 Keep team members informed. Regularly share details about what is happening throughout the organization. Also,
promote a sense of curiosity about the market, industry, and new technologies.
 Connect people with mentors. Pair a less experienced team member with someone who can help them focus on
strategic objectives.
 Reward a proactive not a reactive approach. Recognize people for actively seeking out opportunities and for
anticipating and avoiding problems rather than for solving crises.
LESSON 2 of 5

Identify Relationships and Trends

When you understand the forces affecting your business, you can make smart, strategic choices. Learn how to
spot trends inside and outside your organization.

Look at the larger context

When you are a strategic thinker, you know the importance of looking at the larger context in which your
organization operates:

 You study the trends and drivers of change likely to affect your organization and unit—today and in the
future.
 You know how the departments, functions, and people in your organization work together to achieve your
overall vision and shared goals.
 And you approach your role with a view for how it supports the organization’s strategic priorities.

Zoom In and Out

Rosabeth Moss Kanter—Professor, Harvard Business School
To be an effective strategic thinker, alternate between standing back to see the larger context and moving in to look at the
details.

Learn about your industry, customers, and competitors

To think strategically, you need to stay current with industry and cultural trends, customers’ needs, and
competitors’ moves. You can then begin to identify opportunities, generate effective solutions to problems, and
make truly strategic decisions for your organization and unit.

To assess developments outside your organization:

Area to explore Key questions to ask Actions to take

Industry trends What trends—in technology,
governmental policy, natural
resources, and other key forces
shaping our industry—might
have important implications for
our organization?
Customers Who are our customers, and
what do they value?
How might their needs evolve in
the future?
Competitors Who are our current
competitors, and what tactics
are they using?
 Read a wide range of
publications.
 Talk with other informed
professionals.
 Participate in trade and
professional associations.
To answer these questions, use:
 Customer surveys
 Focus groups
 Social media
To gain information about
competing organizations:
 Become their customer.
 How are we different from
them?
What strengths do they have
that might prove a threat to us
or that we could learn from?
 Read analysts’ reports.
 Network with others who
are familiar with these
firms.

What weaknesses might they

have that we could exploit?

EXAMPLE

After surveying customers about their current challenges, Erica, a manager at an industrial-gas supplier, proposes that the
company start providing consulting services on more efficient energy utilization. She wins approval for her idea, and the new
service proves a hit—enabling her organization to become a one-stop service for customers.
Listen for Opportunities

Brett Vankoski — VP, Wine Director, and Co-Founder, Latitude Beverage Company
Create opportunities by listening to what’s going on in the marketplace and to what your customers want.

Understand your organization’s and unit’s strategic priorities

To make smart decisions, you need to be aware of your organization’s and unit’s strategic priorities. To learn about
your organization’s strategy and how it affects your unit:

 Talk with your boss and peer managers

 Examine annual reports and other material
 Notice how management allocates resources
 Pay close attention to announcements from top executives
With every important decision, ask, “Will what I’m considering help my unit and organization carry out its strategy?
Or will my proposed course of action make it more difficult for us to achieve our strategic goals?”

EXAMPLE

Ted leads a product development group. He attends a presentation by his company’s CEO, where he learns that his organization
is expanding into new overseas markets. With his new awareness of this high-level strategy, Ted leads his team in evaluating
the appeal of their existing products in the targeted overseas markets.
POLL

Know your job’s strategic requirements *

Once you understand your organization’s strategy, be sure you are clear on how your role is intended to support
those priorities. If you have questions:

 Look at your job description or an organizational chart in light of your company’s strategic priorities.
 Talk to your manager about how they see the connections between your function and the overall corporate
strategy.
  Ask yourself, “What’s the most important thing I need to accomplish in my role to support the organization as
a whole?”
If your daily activities don’t align with the larger strategy, you may need to reprioritize how you spend your
time.
EXAMPLE

People in Riley’s department saw her as the go-to person for solving problems with a key vendor. In her previous role, she had
formed a strong working relationship with the vendor’s sales manager. Even after her promotion to team leader, the project
managers still turned to her to intervene in sticky situations. When Riley reflected on what the organization required of her in
her new role, she realized she needed to change her priorities to spend less time on short-term issues that her team could
manage. She arranged an in-person meeting for the project managers and the vendor’s sales team to help them build their own
relationships. Riley was then able to remove herself from all but the most challenging issues.

Make connections
As you gather information from inside and outside your organization, you’ll start to see connections you
previously hadn’t noticed. This ability to spot relationships, patterns, and trends constitutes a hallmark of
strategic thinking.

To further boost your ability to see non-obvious connections:

 Get out of the office. When you travel or do volunteer work, you test and challenge your worldview, and gain
valuable new perspectives.
 Feed your curiosity. Learn more about topics you’re interested in—and those you aren’t. You’ll see
connections between things you thought weren’t related.
 Play devil’s advocate. By arguing against what you believe, you gain insight into the strengths and
weaknesses of your own perspective.
 Spend time with people who challenge you. When you interact only with those who share your beliefs, you
limit your ability to learn and to see new connections.
 Look for stories in the data. When examining seemingly unrelated data or apparently unconnected events,
ask, “Is there a common theme underlying these different pieces of information or events? What do the data
seem to be telling me?”
EXAMPLE

Anton works in human resources. When reviewing employee turnover data, he notices that the employees who leave his
organization for other jobs tend to be individuals with expertise in leading-edge software applications. He decides to examine
how effectively the organization is using its most skilled employees, as well as how it employs recognition and rewards to retain
employees who possess unique skills. Based on his research, Anton makes a proposal for boosting employee retention.
T O OL

Worksheet to Identify Relationships, Patterns, and Trends

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Think visually *
A powerful way to see connections is by making your thinking visible. Putting your ideas down on paper
through shapes, images, words, and colors may help you discover associations that you can’t get from written
and spoken language.

A simple way to make your thinking visual is to create a mind map:

 1. Start with a blank sheet of unlined paper and colored pencils or markers.
2. Write the central topic in the middle of the paper and circle it.
3. Add main branches and sub-branches to capture your thoughts. Use words, pictures, colors, and symbols.
4. Connect related concepts using lines, arrows, and circles.
5. Ask others to add details and make note of associations between ideas.
Clarify cause-and-effect relationships
When you examine patterns and trends, it’s easy to confuse correlation—when two behaviors tend to occur at
the same time—with causality—when one behavior causes another.
Just because your research shows a possible link between two trends doesn’t mean that the first is causing the
second. The opposite could be true, or another unseen factor could be responsible.

Distinguishing between causality and correlation is important, because each kind of relationship can lead to
very different conclusions—and actions.
EXAMPLE

Ali purchases banner ads on key news sites to drive traffic to her company’s website. After several months, visits to the website
have gone up. She concludes that her plan is working and spends a significant portion of her budget on additional ads. Over the
next few months, visits to the website decline. When Ali talks to others in her department, she learns that the previous increase
in website traffic corresponded to a special email promotion of a new product. She realizes that her investment in banner ads
may not have caused the increase in website traffic after all.

To determine whether one action is causing another:

 Experiment. Test whether the action you’re taking is actually causing the result you’re seeing.
EXAMPLE

Ali buys a small second set of ads before making this a core part of the marketing plan.
 Do research. Collect additional data to support or disprove your conclusion.
EXAMPLE

Ali reviews website analytics to see how many visitors came from the news sites that carried the banner ads.
 Examine alternative causes. Look for other possible explanations for the results.
EXAMPLE

Ali considers various explanations for the rise in website traffic: Have there been any special promotions? Has an industry
publication mentioned the product? Has the IT department implemented site upgrades? Has the organization boosted its social
media efforts?
 Explore “why” and “how” the different potential causes and effects may be related. When you ask these
kinds of questions, you get a rich sense of the possible dynamics at play.
EXAMPLE

Ali and her team members analyze how and why banner ads may lead to an increase in website visits: “Do our ads attract
readers’ attention? How? Are people who visit the sites we’ve chosen looking for the kinds of solutions that our organization
offers? Why?”
 Find out how others interpret the same information. Your colleagues may view the data differently and
raise questions you hadn’t considered.
EXAMPLE

Ali consults with a manager from another department, who asks about viewer demographics: Are the banner ads attracting the
kinds of customers who will actually purchase the product? The question prompts Ali’s team to conduct surveys of the people
clicking on the banner ads to get more details about their interests and needs.

Practice the 5 whys

Many situations are caused by a chain of events, in which one action leads to another, which leads to another. When trying to
determine the cause of an issue, people often stop with the first explanation they find—which is seldom the correct one.

The “5 whys” technique quickly gets you to the root cause. Begin by asking, “Why is this happening?” When you have the
answer, ask “Why?” again. Ask at least five times to ensure sufficient depth of analysis.

When you find the real cause, and not just the symptoms, you can take effective action to keep the problem from happening
again.
EXAMPLE

Problem: Our client is unhappy because we didn’t deliver the proposal on time.

1. Why? Because the proposal took longer than we anticipated.

2. Why? Because we underestimated the complexity of the job.
3. Why? Because we made a quick estimate of how long it would take. We didn’t spend the time to list the different stages
of the project and how long each would take.
4. Why? Because we were busy with other projects.
5. Why? Because we don’t have enough consultants to both serve current clients and create proposals for potential
customers.

The Five Ways

Eric Ries—Entrepreneur-in-Residence, Harvard Business School
Ask “why” five times to get to the root cause of an issue.
 Focus on the whole—not the parts
It’s not enough for you and your team to work in isolation to achieve your goals. When you see the connections
within your organization, and the impact that activity in one area has on others, you can take coordinated action
that benefits the firm as a whole.

To be sure your team’s work supports the organization as a whole—and not just your business unit: *
 Be clear about the organization’s overall goals.

 Question the value of any assignments that don’t align with those goals.
 Set as a priority any work that benefits both customers and the business

EXAMPLE

Management has set an aggressive quarterly goal for Eitan’s sales team. He and his colleagues decide to heavily promote a
new product with existing customers. Before starting the initiative, Eitan explores the impact of this strategy on the
manufacturing group. He learns that, to fill anticipated orders for the new product, manufacturing would have to draft people
from other production lines. As a result, other products would be on back order—meaning lower sales and less potential
revenue for the company as a whole. So Eitan and his team come up with a new sales plan that results in fewer negative
consequences for other product lines.

Share the Vision

Cynthia Montgomery—Professor, Harvard Business School

Whatever your role, you need to understand why your job matters and how it fits into the larger organization.

LESSON 3 of 5

Broaden Your Perspective

Learn to move past your assumptions so you can spark creativity and identify novel approaches to challenges
and opportunities.

Expand your thinking

As you develop your ability to think strategically, it’s important to recognize—and overcome—certain barriers.
Like everyone else, you have biases and assumptions that limit your perspective. When you learn to challenge
them, you increase your ability to identify strategic opportunities.

Other ways to broaden your thinking include exercising creativity, asking strategic questions, and inviting
others to stretch and challenge your perspectives. When you follow these practices, you will become a more
flexible thinker—and bring added value to your organization.
T O OL

Overcome cognitive biases

It’s no surprise that your experience, knowledge, and preferences shape the way you interpret the information you
receive. These “filters” help you decide how to act in given situations, but they also limit your range of responses.

Here are tips for preventing three kinds of cognitive biases, or preconceived notions, from limiting your
strategic thinking:
 Cognitive bias Disadvantage it presents Remedies
Confirmation bias Prevents you from getting a complete view of Make sure you have complete and
a situation accurate information.
A tendency to favor Vigorously test your theories.
information that Example: Rob thinks, “I talked to a customer Explore any contradictions in your
reinforces existing the other day who said our prices are too high. beliefs.
beliefs. I’ve been saying for months that we have to Ask others to challenge your
lower our prices to stay competitive with assumptions.
other firms.”
Hindsight bias Hinders you from learning from past Keep a diary.
experiences Take notes during meetings.
A tendency to believe Explore alternative explanations for
that outcomes should Example: Jalisa thinks, “Kim should have events.
have been predictable, known that the marketing campaign wouldn’t
despite lack of evidence result in new customers.”
for this assertion
Groupthink Interferes with your ability to collect honest Create an environment in which team
feedback members feel safe expressing their
A tendency for group opinions.
members to confirm Example: During a design approval meeting, Recruit people to your team or project
each other’s beliefs. the team quickly converges on one of the who share your values but are also
designs. Ellis voices his agreement, even as he independent thinkers.
feels concerned about the similarity between Hold your opinion until everyone else has
this look and that of one of the company’s had a chance to weigh in.
competitors.

Challenge assumptions
When you challenge your beliefs about how things should be done in your organization or industry, you increase
your ability to generate valuable new ideas. By identifying and dismantling notions that you and your organization
have taken for granted, you open the way to fresh possibilities. Problems that seemed impossible suddenly seem
solvable, and previously unimagined responses emerge.

With your team or a partner, follow these steps to challenge your assumptions in ways that lead to strategic
opportunities:

1. List your shared assumptions around an issue or opportunity.

Part 1: The team lists their assumptions

EXAMPLE: Team members at a boutique hotel challenge their assumptions about their business, with the goal of identifying
new opportunities.

2. Drop each assumption one by one and see what possibilities open up.
Part 2: The team challenges their assumptions
EXAMPLE: Team members at a boutique hotel challenge their assumptions about their business, with the goal of identifying
new opportunities.
 3. For each possibility, discuss the implications for your process.
Part 3: The team discusses alternative strategies
EXAMPLE: Team members at a boutique hotel challenge their assumptions about their business, with the goal of identifying
new opportunities.

4. Consider the impact of each new approach on others inside your organization, customers, and so on.
Part 4: The team considers the business implications
EXAMPLE: Team members at a boutique hotel challenge their assumptions about their business, with the goal of identifying
new opportunities.

Reverse the situation *

How you define a situation can actually block new ways of thinking about it. To overcome this roadblock—and kindle new
insights and potential solutions—study the challenge from various angles:

 Change a negative statement to a positive one.

EXAMPLE

Nadya and her peer managers meet to explore ways to expand the clientele—and increase sales—for the chain of high-end
department stores where they work.

She says, “Here’s an assumption we’ve all been making: that bargain hunters won’t shop at high-end retail clothing stores.
What if we reframed this as a positive statement?”

Felicia says, “A positive statement would be: Bargain hunters will shop at high-end retail stores—if those stores feature lower
prices.”
 Define what the situation is not like, and why.
EXAMPLE

“Our stores are not like an airline, where different customers pay different prices, depending on the demand. Our high-end
customers would perceive that kind of discounting as indicating lower quality.”
 Change the direction or location from which you view the situation
EXAMPLE

“Looking at the store floor from above, I see racks of clothing with sale items mixed with full-price items. What if the discount
clothes were in a different area? What if they were in an entirely different location?”

By changing their perspective, Nadya and her peer managers come up with a strategy of launching a number of outlet stores to
attract bargain hunters, while still maintaining the upscale clientele at their flagship department stores.

Exercise creativity
In a business context, creativity is the ability to generate fresh alternatives, visualize new possibilities, and
formulate novel approaches to getting things done. When you creatively tackle organizational challenges, you
and your team:
 Let go of the status quo and take risks

 Draw on information and inspiration from numerous, sometimes unlikely, sources

 Propose ideas that might be controversial or seem naive or uninformed
Certain practices can help you and your team break free from conventional ways of thinking and acting:

 Be positive. View problems as challenges and opportunities. Open your mind to new ideas, even if they seem
preposterous at first.
  Change your routines. Make small changes in your daily routines and physical environment to help you see
that things can be done in different ways.
 Seek inspiration. To help you flex your creative-thinking muscles, take a fiction writing or improvisational
acting course. Or read about masters of innovation and creativity from different fields, such as Pablo Picasso
(art), Marie Curie (science), and Steve Jobs (technology).
 Trigger insights. After you’ve spent time researching an area of interest, take a break to exercise, listen to
music, or engage in a repetitive task. You may be surprised how easily an insight comes to you when you stop
thinking about your challenge.
 Listen for resistance to change—in yourself and others. As soon as you hear someone say anything along
the lines of “We’ve always done it this way,” be willing to challenge that attitude.
 Model creativity. By exploring playful ideas with others, you model creative thinking. Others may emulate
you—further stimulating the creative energy in your group.
Catalyzing Innovation in Your Team
Frank Barrett—Professor, Management and Global Public Policy, The Naval Postgraduate School
To spark creativity, disrupt people’s routines.

Five myths about creativity

Creativity isn’t limited to certain artistic or imaginative individuals; each of us can generate creative solutions to problems and
challenges. And rather than being a solo activity, creativity thrives when practiced in small teams of people who trust each other
and can be playful together.

Here are five myths about creativity, and the corresponding facts:

Myth
1. Only certain people in
certain fields are creative.
2. Younger people are more
creative than older people.
3. Creativity is a solitary act.
4. You can’t manage creativity.
5. Creativity happens in a flash
of inspiration.
Fact
Everyone, in every department in the organization, has the potential to develop
creativity and the ability to innovate.
While younger people may have fewer preconceived notions and may thus be more
open to different approaches, more seasoned employees can draw on vast stores of
knowledge and experience to generate breakthrough ideas.
Most creative ideas come from groups who bounce ideas off each other, challenge
one another, and build on one another’s thinking. When an individual comes up with
a creative breakthrough, it’s usually been sparked by collaborative interactions.
Managers can boost creative thinking by designing workplace cultures that foster
trust and promote the free exchange of ideas
Research has shown that creativity is often the result of hard work and practice.

Ask strategic questions *

In many organizations, managers believe they aren’t doing their jobs unless they spend the bulk of their time
finding the “right answers” to challenges, queries from their managers and direct reports, and so on. But what
would happen if you and your team focused on searching for the “right questions” instead?

When you pose probing, open-ended questions, you bypass stale problem-solving processes and instead initiate
lively conversations where people can learn together.

Strategic questions:

 Are simple and clear

  Provoke thought and discussion
 Generate energy
 Focus inquiry
 Surface assumptions
 Open new possibilities

Examples of strategic questions include:

 What doesn’t fit?

 What would an outsider do?
 What would it [our team, our product, our process] look like if we designed it from scratch?
 Why do we do it this way?
 What might be the long-term consequences of this course of action?
 What’s the most important thing my organization needs from me?
 What questions are we not asking ourselves about [a given situation]?
 Where did the big surprises—both good and bad—come from in our organization this year?
 What happened this year in our organization where we lacked key insights ahead of time?
EXAMPLE

Max’s social media team has fallen behind on several projects. He schedules a meeting to figure out how to avoid this problem
in the future. Rather than ask the team, “What’s happening here, and who’s to blame?” he decides to pose the question,
“What’s possible here, and who wants to contribute?” After a lively discussion, the team comes up with a set of proposals for
keeping future projects on track.
The Art of Asking Questions
You can't get the right answers unless you ask the right questions.

Invite dissent
When you hear the words “strategic thinking,” you may assume it’s something that takes place mainly in your own
head. But you can’t think or act strategically without inviting other people to stretch and challenge your
perspectives.

To become better informed and more flexible: *

 Make dissent a job requirement. To make robust decisions, you need people on all sides of an issue to speak
their minds. By letting team members know that speaking up is an important part of their jobs, you free them
to provide important input.
 Be approachable. If you want people to speak openly, you need to create an environment where they feel
comfortable doing so. Hold “listening sessions,” where people can share ideas and concerns without critique.
 Model candor. If you aren’t willing to “speak truth to power,” then your team members won’t be either. Be
sure your group knows the issues you feel strongly about and are willing to raise with your own manager.
 Create a sense of ownership. When people feel they have a stake in the organization’s success and their
opinions make a difference, they are more willing to contribute their thoughts.
Collaboration by Difference
Cathy Davidson—Professor, Duke University
Structure ways to hear dissenting voices, or you’ll end up with groupthink instead of innovation.

LESSON 4 of 5

Look for Emerging Opportunities

Create ongoing value for your organization by continually scanning for new opportunities.

Train your brain

To be successful in your role, you need to balance working on your day-to-day tasks with strategizing for the
future. By practicing divergent and convergent thinking, priming yourself to spot opportunities, imagining a
future event, and preparing for different scenarios, you train your brain to see opportunities and threats well
before they happen. In the process, you improve your decision making and its impact on today as well as
tomorrow.
Diverge and converge *
As you begin to look for evolving opportunities, give yourself the freedom to diverge—explore many different
paths—before you converge on one way forward.

Most managers are well practiced in convergent thinking—that is, using analysis, logic, and reasoning to process
information and home in on “the best” option. People tend to be less comfortable with divergent thinking, which
involves generating many wide-ranging ideas, with the goal of finding innovative approaches.

Divergent Thinking Convergent Thinking

Spontaneous Systematic
Free-Flowing Logical
Suspension of judgment Judgement
Expansion of options Narrowing of options
Subjective Objective
Creative Conventional
Many diverse response One right answer
Risk Taking Risk Avoidant
 Best for open-ended problems Best for closed-ended problems
New ideas Concrete steps
Big Picture Details

Divergent and convergent thinking are not either-or modes. When you first diverge as a team to generate ideas
and then converge on a path forward, you link creativity and productivity. You also improve your ability to
design and implement strategic actions.

To make the most of divergent and convergent thinking: *

 Practice these thinking styles sequentially. Otherwise, you may end up with only conventional ideas.
 Allow enough time. Don’t try to force or rush idea generation. Keep detailed notes—either in words or
images—as thoughts come to you.
 To keep the processes separate, use separate tools. For example, during divergence, you might capture
ideas on sticky notes. When you’re in convergent mode, you could create a document outlining next steps.
 Stay on track. When you’re ready to analyze and sort your ideas, intentionally shift to “converge mode.” If
you find yourself slipping back into divergent thinking, make an effort to refocus on your action plan.

Divergent Thinking for Sparking New Ideas

Anne Manning — Founding Partner, Drumcircle, LLC, and Instructor, Harvard University
Tamp down hasty judgment and let new ideas flow through divergent thinking.

Practice Divergent Thinking

Anne Manning — Founding Partner, Drumcircle, LLC, and Instructor, Harvard University
Use a technique from improvisational theater to prompt bold new ideas.

Prime yourself to spot opportunities *

The ability to spot opportunities isn’t an innate talent or practiced skill; it’s something everyone can learn to do. It
involves putting yourself in a frame of mind for identifying gains (a promotion focus) rather than preventing
losses (a prevention focus). People with a promotion focus generate more—and more innovative—solutions than
those who concentrate on prevention.
The main characteristics of these two mindsets:

Promotion focus Prevention focus

Creativity Careful planning
Open-Mindedness Accuracy & Reliability
Confidence Fear
Vision of advancement, achievement, and rewards Avoidance of loss and risk; maintenance of the status quo

To prepare for spotting opportunities:

 Reflect on a recent accomplishment. Doing so puts you in an expansive and positive frame of mind.
 Outline your goals. For each goal, list what you and your organization will gain if you are successful. Review
this list regularly.
  Picture what you would like the future to be like. If you achieve your goals, what will you, your team, or
your organization be doing? How will the future be different from today?
As you use these practices, you’ll strengthen your promotion focus and your ability to come up with innovative
solutions.

Shift your language *

One word can make a difference in either limiting or expanding your thinking about the future. Here are two shifts in language
that can make your explorations more strategic:

 Expand your options. When people think about the future, they often pose the question, “What should we do?”
But that way of framing the issue assumes there is one correct course of action. When you ask instead,
“What could we do?” you open up the conversation to a wider range of possibilities.
 Imagine a range of outcomes. Likewise, as you plan a course of action, you probably take the time to consider,
“What will happen?” This question assumes you can predict the impact your actions will have in the real world.
Shifting the query to “What may happen?” lets you explore a range of potential outcomes.

Imagine a future event *

Tracking trends—sales, industry, economic—is an important aspect of strategic thinking. But when you look only at
changes in key indicators, you may:

 Come away with a false sense that tomorrow won’t be much different from today.
 Make incremental improvements, instead of preparing for a future defined by different conditions.
 Fail to grapple with the feelings that the reality of a vastly changed world may bring.
One way to combat these tendencies is to envision a concrete future event. It should:

 Represent a major shift or innovation for your organization, such as the opening of a manufacturing plant
that produces a completely new line of products.
 Be based on actual projections of factors such as demographic patterns or economic indicators. For
instance, experts predict that by 2025, artificial intelligence and robotics will be part of almost every aspect of
people’s daily lives in the US. * Given that prediction, what might your organization look like on a typical
day then?
To bring the event to life, you may want to write a fictional news article describing it in detail. Then, discuss what
this event means for your team. What changes would your organization need to make to continue to be successful
in those circumstances? What advantages might you have over your competitors? Disadvantages?

This activity is designed to shake up your ideas about what tomorrow’s challenges and opportunities might be. It
also introduces a sense of emotion into what might otherwise be a purely analytical exercise.

EXAMPLE

Federica is a manager at a property and casualty insurance company. She and her team have been following variations in
insurance payouts for coastal flood damage over the past few years. To help bring the abstract data to life, they decide to
imagine what might be happening at their corporate headquarters in Boston on a specific date in 2050. They discover that, if sea
levels rise as predicted, the building—along with 25% of the city—will be covered in water. This projection prompts the team
to research opportunities to insure renewable energy projects at favorable rates.

Prepare for different scenarios

 No organization can afford to wait for change to happen, and then respond to it. By envisioning several
plausible future scenarios, you can begin to craft plans that will be successful, no matter how the future unfolds.

When you draft scenarios, you and your team create several vivid stories about how relevant issues might
evolve over time. The goal is not to predict the future; it is to stretch your thinking about opportunities and
threats—and their implications for your organization.

Use scenarios when: Do not use scenarios when:

You are working in a highly uncertain environment.
Leaders are open to dialogue and change.
You have time for creative conversations about the
future.
You are dealing with a strategic issue and the solution is
unclear.
You are working in an environment in which the outcome
is predetermined.
Leaders want to maintain the status quo.
You are too busy with a crucial project to step back and
reflect.
The problem is not central to your organization, or the
problem and solution are clear.

To create and test future scenarios: *

1. Define the situation you are looking to explore.
2. Specify the timeframe: Is it 5, 10, 20 years in the future?
3. Make a list of what you know about the situation (driving forces).
4. Identify what you don’t know about the situation (critical uncertainties).
5. Brainstorm different possible outcomes.
6. Identify three or four plausible, interesting, and relevant scenarios, ensuring your final set covers a wide range
of possibilities.
7. Come up with a memorable, descriptive name for each scenario to make the scenarios come alive for your
team.
8. Test your current strategy against each scenario.
9. Look for opportunities suggested by the different scenarios.
EXAMPLE

Emmanuel and his team at a medical supply manufacturer want to explore the impact of customer needs, technologies, and
competitors that might emerge in the next decade. Through a lively scenario process, the group develops four plausible future
scenarios, which they call “Double Helix,” “Dr. Me,” “Holistic Healer,” and “Biggest Pharma.” Emmanuel leads the team in
testing their current strategies against each scenario. The group realizes that, in all of the scenarios, patients will take a more
active role in managing their own health than they do today. They assign a smaller group to research how their company
might market its products directly to consumers.

Why a Good Idea Isn’t Enough

Brian S. Cohen—President and CEO, Strategic Growth Advisors, and Member, Young Presidents’ Organization
Your great idea probably isn’t unique. Outthink your competitors by exploring scenarios for success.
Avoid pitfalls when using scenarios *
Creating scenarios of the future can be a fun, challenging activity. To gain the most value from the exercise, avoid the following
pitfalls:

 Pitfall 1: Thinking of the scenarios as being predictions. Use them for sparking thought and dialogue, not as the basis
for data-driven analysis.
 Pitfall 2: Being overwhelmed by the possibilities. Keep the process simple. Don’t try to capture every detail.
  Pitfall 3: Believing you have to choose one scenario. The purpose of scenario thinking is to test your strategy against
different possible futures, not choose one you think will happen.
 Pitfall 4: Assuming the future will look like the present. Be expansive in your thinking and assume major shifts will
take place between now and then.
FR

LESSON 5 of 5

Put Strategic Thinking into Action

It’s not enough to think strategically; you also need to act on your insights. Apply your knowledge to make
smart, well-informed decisions with both the present and future in mind.

Evaluate key data

Whenever you’re confronted with complex decisions on the job, you need to ensure that you’ve got the right
data.
Identify critical information
Begin by identifying the critical information you need in order to understand and resolve the issue. Make a
point of taking a fresh perspective on the situation and asking questions as if you were an outsider.
EXAMPLE

Tabitha runs an order-fulfillment group. Recent survey results indicate that customers are not satisfied with the timeliness of
their order deliveries. Tabitha believes there might be a demand for an expedited delivery service at a premium price. Before
she explores this option, she considers questions such as:

 What does the survey tell us about how important speed of delivery is to overall customer satisfaction?
 How would an expedited delivery service contribute to our organization’s strategy?
 What other improvements or services might contribute as much, or more, to overall customer satisfaction?
T O OL

Worksheet for Collecting Key Information

Download Tool

Build on existing knowledge

As you gather crucial information:

 Look for how others inside or outside your organization have handled similar situations.
 Don’t limit yourself to your own industry. Identify new approaches being used by your competitors or
organizations in other lines of business. Often, companies in completely different industries may have faced
similar challenges or opportunities.
 Think about how you might build on these practices to accommodate the unique conditions in your own unit
or organization.
Screen out irrelevant information
To focus on data that will help you home in on a course of action:
  Don’t be distracted by information that may be interesting but marginally useful or overly time-consuming to
collect.
 Try not to overanalyze small discrepancies in your data.
 Continually ask: “Would gathering more information fundamentally change the answer that I already have?”
If the answer is no, then you need to move on. If it’s yes, then you need to collect more information.
EXAMPLE

Gillian is investigating product defects created by a piece of manufacturing equipment. One week, the machine generates 150
defective products. Another week, it generates 160. It’s probably not worth Gillian’s time to analyze this small discrepancy. But
if the machine produced 150 defective products one week and 450 another, then she probably should explore the matter further.

Take internal stakeholders’ needs into account

You also need to consider how your choices will affect others in your organization—your own manager, your
peers, and your direct reports, if you manage a team.

To understand your internal stakeholders’ needs and concerns:

 Identify stakeholders and their interests. Ask, “Who’s involved in this process? What are their roles and
responsibilities? What’s the nature of the relationships among them? What are their goals?”
 Get their input. Ask open-ended questions about your idea, such as, “What problems do you foresee? What
ideas do you have for improving the plan? What’s needed for this idea to work for you? What do you see as
the pitfalls?”
 Gauge your support. While weighing alternative courses of action, think about who will support a particular
idea and who will oppose it. Ask whose support you can live without, and whose backing and buy-in you
absolutely need. This information may influence which option you decide to pursue.

Sound Strategic
ina Bowman—Executive Coach and Managing Partner, Paravis Partners
It’s not enough to think and act strategically; you also create value by sounding strategic.
T O OL

Worksheet for Considering Internal Stakeholders’ Needs

Download Tool

Consider trade-offs
Most decisions you make involve trade-offs—that is, accepting that there likely will be costs associated with the
expected benefits of a proposed course of action. Applying your strategic thinking skills means assessing and
selecting the most appropriate trade-offs in any given situation.
EXAMPLE

Satish’s budget for a major initiative has enough funding to cover three of the four deliverables he’d like to see the project
provide. After talking with others in the organization about the trade-offs, he decides which deliverable to omit.
Think Ahead

Adrian Beggan—Director, Sales and Marketing Intelligence, Google

Managers should strive to balance short-and long-term objectives.
T O OL

Worksheet for Making Trade-Offs

Download Tool

POLL

Assess pros and cons

Whenever you consider a potential course of action—a new strategy for your group, a new product feature, an
initiative to improve a business process—ask yourself what advantages and disadvantages might be associated
with that choice.
EXAMPLE

Jaime’s team is considering developing the next generation of an existing product—a version that would include many
innovative features.

She creates the following list of pros and cons:

Pros and cons of new product version
Advantages
Lets us charge a higher price
Might attract new customer segments
Could improve brand awareness: Our company would be
seen as on the leading edge of our industry’s technology
Disadvantages
Might cannibalize sales of previous product version
New features could be perceived as unnecessary or
annoying by some consumers
Would require expensive redesign of base product

Weigh the pros and cons of your idea in light of your organization’s and unit’s strategic goals. For instance, do
these goals emphasize:

 Reducing costs?
 Improving brand awareness?
 Simplifying processes?
Your answers can guide decisions about whether to proceed, and if so, how.
EXAMPLE

Rex’s group is evaluating the possibility of creating tiered versions of a product—high-end, midmarket, and low-end. Based on
data he has collected, he’s made a strong argument against introducing a low-end product: “It’ll hurt our brand image, reduce
sales, and ultimately cut into our profits.” Because no one can think of advantages that offset these possible disadvantages, his
team decides to eliminate the low-end version from its list of projects under discussion.
Balance short- and long-term outcomes
In considering a course of action, think through the potential immediate and long-term impacts. The actions you
take today should support your organization’s priorities for the future.
In certain circumstances, you may need to prioritize short-term results at the expense of long-term outcomes.
But before doing so, look for solutions that serve both current and future organizational needs, rather than one
or the other.
EXAMPLE

Mila is wondering whether to offer promotional discounts on a product line that has experienced declining sales. She realizes
that this move could increase sales revenue during the promotional period. But it could also hurt sales over the long run,
because customers might wait to buy more of the products until the company provides another discount. However, if boosting
sales immediately is a high priority for the organization, Mila may decide to trade off future revenue for a short-term increase in
sales.
Balance unit and organization needs
Some decisions involve trade-offs between your department or group and the larger organization. Be sure not to
optimize your team’s success at the expense of other business units or the company as a whole.
EXAMPLE

Charlotte leads a sales group whose representatives have won numerous new accounts by promising customers early delivery
dates on a new product. That’s great for her group. However, it puts a burden on the product development, manufacturing, order
processing, and customer service departments—all of which must accelerate their processes in order to meet the promises the
sales reps have made. Charlotte needs to consider whether to forgo some new sales in return for smoother operation of the rest
of the company’s functions—so the organization can serve all its customers, not just the newest ones.

Decide on high-priority actions

Once you’ve carefully thought through your options, you have likely narrowed them down to a short list of
viable alternatives. Now ask yourself:

 Which of these are the most critical; that is, which will generate the most important results for my group
and organization?
 Which are less critical; that is, which don't have as much bearing on my group’s or organization’s high-
priority goals?
Remember that some actions may be urgent, but not important, in the big scheme of things. If you put too much
emphasis on completing urgent but not important tasks, you risk neglecting more strategically valuable actions.

By identifying high-priority actions, you can figure out how to best use your time and which tasks to focus on in
what sequence.
Anticipate unintended consequences
In a setting as complex as an organization, any action is bound to create unintended consequences. In fact, some
problems you encounter may actually be the side effects of previous solutions.
 Before making any strategic decision, take the time to anticipate the impact—both intended and unintended—of
your actions.

To anticipate and prevent unintended consequences:

 List the potential effects of the proposed action—both positive and negative. Talk to others to assess how
your decision will affect different constituencies. Evaluate the potential impact on other functions in your
organization.
 Look at alternative solutions. Come up with other approaches, and assess the positive and negative effects
these actions might have.
 Determine which course of action is most beneficial—and least harmful—to your organization. The best
strategy is not always the one that generates the most short-term revenue or cost savings.
 Include a review process. Schedule regular conversations to make sure your course of action is on track, and
is having the desired impact on your organization.
Some actions may have unintended consequences. But by taking the time to explore the possible impacts of
your decisions, you can cut down on surprises and help ensure positive results.
EXAMPLE

Eli’s company decides to save money by discontinuing updates and support for a legacy software program. Eli contacts existing
customers and offers them a discount to upgrade to a newly released program. To his surprise, few customers take advantage of
the upgrade offer. Through surveys, Eli learns that rather than upgrading, many of those customers have switched to a
competitor’s software and ancillary products.

Learning Together in a U.S. Hospital

Anne Manning— Founding Partner, Drumcircle, LLC, and Instructor, Harvard University
Cross-functional groups can accomplish surprising results when they think strategically together.