Founder of Michael Cobbin & Associates
What does strategic thinking mean in today’s chaotic world?
To be strategic you need to monitor your external environment constantly and be prepared to shift gears fast, combining planning with entrepreneurship.
Being strategic is vital for success in business today. Competitors can outflank you so fast that you won’t know what happened. You must therefore think continuously about where you should place your main efforts and investments.
Strategic thinkers have an external focus. They constantly review the state of their markets; they keep a sharp eye on the latest trends and what competitors are up to. But strategic planning is extremely difficult in volatile markets where you can’t make any firm predictions about future trends.
Being strategic used to mean a lot of analysis and planning, like doing research on possible holiday destinations. But now the territory you want to visit is rapidly and constantly changing so you don’t really know where you will end up even if you have a firm destination in mind.
Strategic thinkers today recognize the chaos they have to navigate. Now it’s more about continuous monitoring and adapting. It’s more about being entrepreneurial, opportunistic and adaptable. Sure, you have to make hard investment decisions, often months or years in advance of payback time, but it is equally important to cultivate a culture of fast responsiveness to the unexpected. There is a new school of strategic thinking called emergent strategy. The idea here is that strategy is less about planning ahead and more about continuous monitoring of the environment, rapid learning and fast adaptation. The classic example of emergent strategy is the old Honda story where executives moved to California in the 1960s to sell large motorbikes but when the public noticed the scooters the executives were riding around town on and started asking for them, Honda changed the strategy.
To be more strategic, the key is to keep in close touch with the leading edge movers and shakers in your industry. Look at related industries to see if you can spot emerging trends. All strategies are risky unless yours is to be a fast follower. Businesses like Microsoft have such a monopoly that they don’t need to be very original, provided they move quickly when someone else does, like when they introduced Internet Explorer not long after Netscape Navigator took off. They did the same with Windows when the noticed the appeal of Apple’s graphical user interface and they haven’t changed their approach at all over the years. However, if you don’t have Microsoft’s clout, you need to stick your neck out and take some risks. You need to have a few strategies. Don’t forget the advantages of diversification, so you don’t put all your eggs in one basket. Also, keep in mind the need to be strategic about your own personal time, talent, resources and energy. This means reviewing regularly how to invest your time for the best return and religiously refusing to do low value things.