Creating Strategic Thinkers

One of my good friends told me of a challenge he and his manager were facing. They needed their people to think more strategically but were having difficulty achieving this seemingly simple objective. As we discussed the issue, I began thinking of the problem in terms of a framework for strategy.

This way of thinking became a habit for me as this friend and I studied for certification in an IT management framework called ITIL®. Our coworker, and good friend, the ITIL lead at the time, had developed the habit of answering any IT management question posed to him by relating the answer back to the framework. As a result he came across as not only intelligent but also wise beyond his years.

One important aspect of a framework is that it allows us to evaluate a complicated or complex subject as an interrelated system where the answer to a problem is found in the underlying relationships. Any complex system can produce varying results based on seemingly trivial interactions within the system. In terms of a management framework we find that small connections in day-to-day routines can increase or reduce the options available to business managers.

In terms of a strategy framework we find that strategic thinking depends on more than just willpower or direction from above to do so. There are any number of underlying constraints that limit an individual’s ability to think strategically. The first is a common understanding of what it actually means to think strategically. The individual being asked to think strategically may consider strategic thinking to be executive level activity and not have the faintest idea of how to achieve that goal or any desire to tell his manager. Meanwhile the manager may simply be saying that he wants his people to think in terms of the next higher department’s goals and defined strategies before taking any actions.

The beauty of a framework is that it provides interlinking definitions of terms that provide clarity and a common understanding for effective communication. This article will explore what it means to think and act strategically. Following articles will enumerate related concepts that together provide a vision of what strategy is and how it can be used to create more success in human endeavors. This framework of strategy is intended to provide a foundation of knowledge that will open strategy to a larger audience and help strategists gain mastery of the subject much quicker.

There are two high level views of strategy that must be taken into account when determining what it means to think and act strategically. These views relate to the responsibilities people at different levels of organizations have related to strategy. One view is that strategy is performed at the highest levels and need only be communicated to lower levels for execution. The other view is that strategy is the responsibility of people at all levels of the organization.

If the first view of strategy is adopted then few people need understand strategy in any detail and it is perfectly acceptable for strategists to spend twenty years learning the art.

However, if the second view of strategy is adopted then many people need to learn about strategy, a common understanding of terms and expectations needs to be developed, and a quick and effective method of teaching the concepts of strategy is needed. This book takes the view that everyone needs to learn about strategy.

Starting from a high level everyone should be clear that strategy is about successfully achieving goals. We all have goals in life individuals and organizations alike. There are two basic approaches to achieving these goals. The first is to do nothing and pray that you get what you desire. The second is exemplified by and ancient saying, “pray for a good harvest but don’t stop hoeing.” Strategy at the highest level is nothing more than an approach for getting what we want (achieving goals) that produces better results than doing nothing and praying. It involves not only coming up with an approach but also taking action.

We all operate within a context or an environment that determines some of the goals that we set out to achieve. For individuals simple survival is a necessary goal that drives much behavior. Abraham Maslow is famous for creating a hierarchy of human needs that categorizes human goals into five categories, physiological, safety, love/belonging, esteem, and self-actualization. These goals are hierarchical in that the lowest must be achieved before much effort can be expended on the next highest and so on. This is a good starting point for understanding the context in which goals are set and how the strategist can be limited or empowered by the context in which they operate.

It is a complete waste of time to ask someone to care about moral problems or to expect creativity of someone who is hungry and going without sleep. The need to find food and get sleep will override any other activities until those needs are satisfied. A person can, however, think and act strategically about getting food and finding a place to sleep and many people do this on a daily basis. Homeless people develop strategies to get the necessary resources required to survive. Some find the best spots to ask passersby for money. Others entertain passersby to get more money. Some come up with clever slogans that encourage people to give such as “will work for food.” Each approach is a conscious effort to achieve a goal that is designed to work better than just aimlessly waiting for help.

In organizations there is always a culture that acts as context for those within the organization. This culture is a powerful influence on how people within the organization think and act. In a traditional command and control environment individuals and middle level managers are unlikely to think and act strategically for the organization as they are generally expected simply to follow orders. In this context people will limit their strategic thinking to issues of their own self interest such as achieving the goals that will get them what they desire, more money, promotion, etc. with little regard for the goals of the organization as a whole.

Increasingly, organizations are expecting more from individuals at every level of the organization. Successful companies today are often those who set direction and then free their people to pursue goals in creative ways. In this type of organization individuals are expected to strategize about more than just their personal interests. They are expected to take up the goals and interests of the organization and help develop methods for achieving those goals within their sphere of influence and control. The challenge for senior management then becomes more complicated than just creating a plan and driving everyone to execute.

In this type of organization senior management eschews a formal structured plan in favor of a direction and context for action. Senior managers actively mold the organization’s culture as a means of coordinating activities. This involves connecting with the human element of the organization and shaping how people attach to and operate within the organization. Some classic methods are sharing a common history of the organization, highlighting leaders who exemplify the values of the organization, placing more weight on organization fit over specific skills in recruiting, living the core values, etc. These kinds of actions and documentation can be found in long term successful organizations such as Toyota in the Toyota Way (Liker 2004), and the U.S. Army in the Army Field Manuals (Army 2005).

Organizations are getting larger and larger and more and more complex. The U.S. Army engages in activities on almost every continent, in almost every major culture, and on many different levels. Likewise global businesses have similar reach in their activities. In these kinds of organizations it is impossible for senior managers to have access to all the important information much less have the bandwidth to analyze, synthesize, and formulate strategies for every goal of the organization. Success in these environments requires at the very least that leaders at many levels create and execute strategies to achieve goals within their spheres of control and influence.

In hugely complex endeavors such as the nation building activities currently being pursued in Iraq, we find that the actions of even the lowest level soldiers has significant impact on the overall goals both political and military. A strictly command and control structure where soldiers simply follow orders results in constant conflict with the local people making the overall goals unobtainable. Success in this environment requires that many soldiers at the lowest levels of leadership evaluate the context of their environment, learn the context of the local people, and take initiative to act in ways that may otherwise be counterintuitive in the small picture but that are essential to achieve the larger goals.

Armies of the past could not have achieved the level of success we’ve seen in Iraq because their context limited them. Senior managers in complex organizations must create the conditions in which others can be strategically creative. Individuals must feel empowered to actively pursue organizational goals and be rewarded for success. To ensure concentration of forces, an ancient and critical strategic axiom, senior managers must create a structured set of goals and constraints that keep everyone moving in the same direction while being responsive to changes in the environment that require new direction. The classic danger in chasing too many unrelated goals is that limited resources are squandered and few goals receive enough resources to be achieved. If individual soldiers in Iraq behaved badly the United States could not possibly put enough soldiers in country to achieve the goal of creating a stable nation.

So for the more senior strategists the concern is to set high level goals that inspire people within the organization to get involved and take action; to craft a set of goals that work cohesively and marshal resources effectively, and to set constraints that guide action in the right direction. Individuals must be convinced to subordinate their personal goals to the organization’s goals as a strategy for personal success. Companies take many approaches to create this context today. Many speak of values and mission statements coming up with catchy phrases that do little to create effective context. Arguably one of the most effective examples of setting organizational context is the set of core principles, values, beliefs, and business methods known as The Toyota Way (Liker 2004).

Since Toyota’s Founding we have adhered to the core principle of contributing to society through the practice of manufacturing high-quality products and services. Our business practices and activities based on this core principle created values, beliefs and business methods that over the years have become a source of competitive advantage. These are the managerial values and business methods that are known collectively as the Toyota Way.
— Fujio Cho, President Toyota

The context created by senior strategists must not only engage people in strategic activities but it should also steer them in the right direction and identify directions that are off limits. Context allows people to make decisions in the field without direct communication with higher levels and to have confidence that those decisions are acceptable decisions. With the proper context people can develop strategy at all levels of the organization to achieve goals with confidence that they are acting in concert with the larger organization and that doing so will further their personal strategic goals.

Strategic thinkers must always think in terms of the context in which they operate and in terms of the context they create for others. In other words they must both manage up in the organization as well as managing down. Many people are unaware of this need to actively engage their context. Creating strategic thinkers often requires teaching people the necessity of tuning into their context, to learn how to operate within it, and to pass the ability along. Once engaged, the strategic thinker can begin to influence the context in which they operate.

Successful strategic thinkers in organizations must be able to operate in three primary directions, “manage up”, “manage down”, and “manage laterally”; and they must be able to influence the context in each direction. They must manage the context in which they operate by focusing upwards in the organization and engaging management in multiple levels and more broadly than just their direct chain of command. They must develop methods and plans that engage those below them to be more effective in contributing to organizational goals. And they must operate laterally, influencing their peers and collaborating on larger goals that require cooperation and coordination.

The larger and more complex the organization the more important it becomes to manage up the organization. Since senior leaders can’t possibly have the bandwidth or exposure to all the many challenges of the organization they depend on strategic thinkers to effectively highlight and communicate issues that impact organization level goals. The ability to get the attention of higher levels of management when appropriate is a tactical asset that every strategist in large complex organizations should develop. Providing context that facilitates managing up the organization is a survival requirement for any large complex organization.

The primary job of any strategist is to achieve goals, either those assigned by higher levels of organization or those set by the strategist. To do this the strategist needs a way to think about required activities and to execute those activities. Since most strategists can’t possibly learn all details about every way they might take action it is important to create useful abstractions and separate details of execution from the conceptual planning of that execution. These abstractions should be designed around the results that the strategist can expect from utilizing them. In this way the strategist can focus on identifying goals to be achieved then quickly map the execution results that best achieve the goal. We call these abstractions, tactics.

There are many views about the distinction between strategy and tactics. Some people believe that scale should be the differentiator making statements such as winning the war is strategic but fighting a battle is tactical. Many people use this distinction but it provides little real world usefulness leading only to endless arguments about what is tactical and what is strategic. Some people use time as the differentiator saying that medium and long term activities are strategic while short term activities are tactical. This, however, leads to the same dilemma, what is medium term, what is short term and how does this distinction add value. All of these types of distinctions imply that the basic activities used in strategy and tactics are the same and the only question is which arbitrary distinguisher is to be used to separate them.

This framework takes a different approach in concluding that strategy and tactics are different things entirely. Strategy deals with how we attain goals while tactics are about execution and results. Tactics are a unique combination of resources and capabilities designed to produce specific results. Tactics and operations work together to ensure that results are repeatable and can be produced where and when needed at the quantity needed. Together tactics and operations provide the execution element that so many strategists are seeking. Once the goals are decided then the strategist can choose from the available tactics and the operations capability those best suited to achieving the goals. Sometimes, the tactics and operations capability don’t exist sufficiently to achieve the goals leading the strategist to focus on creating the necessary tactics and operations capability.

This framework will tie together context, goals, strategy, tactics, and operations in a manner that helps the budding strategist understand what is expected of them and how they can operate. The experienced strategist will find useful the clarification of terms and concepts and the way they are integrated to produce a system for achieving greater more consistent results. For managers seeking to develop more strategic thinkers in their organization this framework will provide a common method of communicating ideas, concepts, and expectations to those potential new strategic thinkers.

Copyright 2010, Ron B Palmer