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Strategic
Thinking

Session 03- 04
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Formal Planning
- Very analytical
- Preservation and rearrangement of
established categories the existing levels of
strategy
Real strategic change demands inventing new
ones rather than such a rearranging the
established categories.

Adapted from Mintzberg, H (1994)

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Strategic thinking generates the
creative act of synthesizing
experiences into a novel strategy
(Synthesis of the insight to transform
the company).

Synthesis: combining of elements into a whole.
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Strategic planning:
- Expected to formulate best strategies
- Outlined step-by-step instructions for carrying out
those strategies.
- Based on the manipulation of numbers (analysis)
that spoils strategic thinking
- Suppresses managers creative thinking.

Indeed, strategic planning is not strategic thinking.
The most successful strategies are visions, not
plans
Adapted from Mintzberg, H (1994)
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Strategy-making process should be capturing what
managers learn from all sources (soft and hard
data) and then synthesizing that learning into a
vision of the direction that the business should
pursue (Mintzberg 1994).

Planners can help strategists for strategy
processes through formal analyses (or supplying
hard data) rather than influencing to discover the
one right way.



Adapted from Mintzberg, H (1994)

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Strategic Programming !
Strategic Planning, as it has been
practiced, has really been strategic
programming, the articulation and
elaboration of strategies, or vision, that
already exist.
Mintzberg, 1994.


Articulation: act or mode of jointing. b joint.
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What Strategic Thinking is ?
Strategic Thinking is about synthesis. It
involves intuition and creativity. The
outcome of strategic thinking is an
integrated perspective of the enterprise,
a not-too-precisely articulated vision of
direction
Adapted from Mintzberg, 1994.
Intuition: immediate insight or understanding without conscious reasoning.
Synthesis: combining of elements into a whole.
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Strategic Thinking: Emergent
Strategies
Strategies, evolve through strategic
thinking, cannot be emerged on schedule
(set of steps; and formalizing those steps)
and immaculately conceived. They must be
free to appear at any time and at any place
in the organization, through messy
processes of informal learning at various
levels of the organization.
Adapted from Mintzberg, H (1994)
Immaculately= perfect messy : difficult to deal with; awkward.
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Strategy making goes beyond the
boxes, life is larger than our
categories.



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The pitfalls of planning
Calculating style of management, not a
committing style
To reduce the power of management
over strategy making.

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Fallacies of Strategic Planning
Prediction: the world is supposed to stay
the same while a plan is being developed
and implemented
Detachment: strategists can be detached
from the subjects of their strategies
Formalization of strategy making process
Fallacy: 1 mistaken belief. 2 faulty reasoning; misleading argument.
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Innovation has never been
institutionalized. Systems have never been
able to reproduce the synthesis created by
the genius entrepreneur or even ordinary
strategist

Strategic planner is trying to paint the big
picture with little strokes who abstracts the
daily details (Mintzberg 1994).
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Strategic Thinking:
an act of geniuses ?
If an organization is managed by
intuitive geniuses there is no need for
formal strategic planning.
But how many organizations are so
blessed?
And, if they are, how many times are
intuitives correct in their judgment.
George Steiner in Mintzberg, 1994.
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Left- and Right- Handed Planners

Analytic thinker: S/he is dedicated to
bringing order to the organization
Creative thinker: S/he seeks to open up
strategy-making process. As a soft
analyst, s/he likes to find strategies in
strange places and encourage others
to think strategically.
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Danger of Formalization
It limits (or badly affect) our creative
activities
Systems do not think, when they are used
for more than the facilitation of human
thinking, they can suppress thinking
Strategic planning has a greater use
without arbitrary formalization, and a
contribution around the strategy making
process.

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Intuition
Strategic
Thinking
Analysis of Essence
Transformation of Changed
Configuration
Local optimization
or Seeing the Tree
not the Forest
Rearrangement of
Elements
Problem
Prototype
Process of
Thought
Solution
Mechanical Systems
Thinking
Three Kinds of
Thinking Process
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prototype : original as a pattern for imitations, improved forms,
representations,
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Setting Organizational Direction:
Industrial Foresight and Strategic
Intent
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What is Industry Foresight?

A deeper insight
of the future





A deeper insight
of the future




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Gaining an understanding of the
trends and discontinuities of the
environment, deeper than the
competitors
Transform industry boundaries
and create a new competitive
space
&
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How to See the Future
Looking
Outward
Spending much time to look in to the
external issues rather than internal ones
Looking
Forward
Spending much time for understanding the
future rather than dealing with current
issues
Build a collective
view of the future
Consulting colleagues to build a
collective view of the future and
the ways of dealing with it.
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Why Industry Foresight
Quest for industry foresight
Gaining an understanding of the trends and
discontinuities deeper than the competitors,
Stakeout a
leadership
position in
the market
Informs
corporate
directions
Lets the
company
control the
evolution of
the industry
Lets the
company
control its
own destiny
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What it requires?
Creativity and imagination
Unlimited Curiosity
Desire to spend a great amount of time
on understanding the future
Significant expenditure of intellectual
energy
Willingness to move far beyond the
issues on which it can claim expert
status

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What it requires?...
Not being customer-led but be much
more than that: (Desire to do more than
satisfying customers amazing them)
Not taking competitors as benchmarks
Going beyond traditional modes of
market research


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The Danger Of Being
Customer- Led
Customers are notoriously lacking in
foresight.

Meeting only the articulated needs
of customers already served
you cedes vast opportunities to
more farsighted competitors.
cede : formal give up one's rights to or possession of
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THE DANGER OF BEING CUSTOMER- LED




















Todays
Business
C
U
S
T
O
M
E
R

N
E
E
D
S

Unarticulated
Articulated
Served Unserved
CUSTOMER TYPES
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Strategic Fit
Strategic Intent
Vs
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? Strategic Fit ?
Tries to create a fit between the
existing resources of a company and
current environmental opportunities,
and not enough upon building new
resources and capabilities to create
and exploit future opportunities

Strategies formulated through this
model tend to be more concerned with
todays problems than tomorrows
opportunities
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Strategic Intent
The notion that strategy formulation
should involve setting ambitious goals,
which stretch a company, and then
finding ways to build the resources and
capabilities necessary to attain those
goals.
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Strategic intent envisions a desired
leadership position and establishes the
criterion the organization will use to
chart its progress.
Examples:
Komatsu set out to Encircle
Caterpillar. Canon sought to Beat
Xerox.
Honda strove to become a second
Ford an automotive pioneer.
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Focusing the organizations attention on the
essence of winning.
Motivating people by communicating the
value of the target.
Leaving room for individual and team
contributions.
Sustaining enthusiasm by providing new
operational definitions as circumstances
change.
Using intent consistently to guide resource
allocations.
Strategic intent concept also encompasses an
active management process that includes
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Strategic Intent vs. Strategic Fit
Two approaches are not mutually
exclusive

Managers do have to analyze the external
environment, analyze companys
resources and capabilities as they did in
the fit model,
but strategic management process should
begin with challenging goals and, through
out the process the emphasis should be
on finding ways to develop the resources
and capabilities necessary to achieve
these goals.
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The role of strategic level
managers on strategic intent
For corporate challenges to lead to
competitive advantage, top
management must:
Create a sense of urgency
Develop a competitor focus at every
level through widespread use of
competitive intelligence
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Provide employee with the skills they
need to work effectively
Give the organization time to digest
one challenge before launching
another
Establish clear milestones and review
mechanisms.