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4 Ways to Develop Your Strategic Thinking Skills

• 10 Sep 2020

Think back to the last time you participated in a strategic planning meeting for your organization. You were likely presented with a challenge to solve or goal to achieve.

Do you remember your contributions during that meeting? Did you offer compelling ideas and plot a course of action, or find it difficult to think strategically and develop a solution? Did you have a good idea, but struggle to communicate it in a logical way? Were you an active participant in the conversation, or did others helm it?

Strategic thinking skills are among the most highly sought-after management competencies. Why? Because employees capable of thinking critically, logically, and strategically can have a tremendous impact on a business’s trajectory.

If you want to improve your strategic thinking skills, the good news is that, with the right mindset and practice, you can.

Here are four ways to improve your strategy skills , so the next time you’re involved in a strategic planning meeting, you can ensure your contributions are noticed.

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What Are Strategic Thinking Skills?

Strategic thinking skills are any skills that enable you to use critical thinking to solve complex problems and plan for the future. These skills are essential to accomplish business objectives, overcome obstacles, and address challenges—particularly if they’re projected to take weeks, months, or even years to achieve.

Strategic thinking skills include:

• Analytical skills: To ideate a strategy that helps your organization reach its objectives, you must be capable of analyzing a variety of inputs—from financial statements and KPIs , to market conditions, emerging business trends, and internal resource allocation. This initial analysis is crucial to creating a strategy that aligns with the current reality facing your organization.
• Communication skills: Putting a strategy into place for your company, regardless of its size, requires solid communication skills . The ability to communicate complex ideas, collaborate with internal and external stakeholders, build consensus, and ensure everyone is aligned and working toward shared goals are all central to strategic thinking.
• Problem-solving skills: Strategic planning is often used to solve problems or address challenges, such as missed financial targets, inefficient workflows, or an emerging competitor. Implementing a strategy that addresses the central challenge you face requires you to first understand the problem and its potential solutions. From there, you can craft a strategy that solves it.
• Planning and management skills: Strategy isn’t just about thinking of a solution—it involves implementation, too. Once data has been analyzed, the problem is understood, and a solution has been identified, you need strong planning and management skills to bring everything together.

How to Improve Your Strategic Thinking Skills

1. ask strategic questions.

If you want to improve your strategic thinking skills, one of the simplest things you can do is ask more strategic questions. Doing so allows you to exercise your planning skills, become adept at spotting opportunities, and develop a more strategic mindset you can leverage throughout your career.

According to the Harvard Business School Online course Disruptive Strategy , strategic questions can relate to a challenge, opportunity, or ambiguity you face in your current situation, whether personal or professional. They might, for instance, relate to launching a new business or product, beating a competitor, or structuring your organization for innovation.

It’s also important that your questions apply to your role and responsibilities so you can act on them.

Some examples of strategic questions you might ask include:

• How can we strategically position ourselves to enter a new market?
• What’s the direction for growth for each of our products or services?
• Where will the organization's growth come from in the next five years, and how does it compare with where growth has historically come from?
• How should the organization respond to the threat presented by potentially disruptive competitors ?

2. Observe and Reflect

In addition to asking strategic questions, you need to answer and address them skillfully. One of the most effective ways of accomplishing this is to observe and reflect on your current situation, ensuring any strategy you conceive is grounded in facts.

For example, imagine that the business you work for has begun losing market share for one of its products among its traditional customers. At the same time, it’s gained market share from an entirely new customer base. It’s easy to assume why this might be happening, but doing so can lead you down the wrong path at a critical moment in your organization’s existence.

Instead of blindly following an assumption, gather as much information as possible to use when crafting your strategy. For example, this might include conducting user interviews with new customers to identify the different jobs they hire your product to perform.

Understanding why new customers are attracted to your product can enable you to tailor your marketing strategy and product development to better embrace their needs .

3. Consider Opposing Ideas

Once you’ve landed on a strategy that can help your organization reach its goals, question your assumptions, and put your hypothesis through rigorous testing. By doing so, you can ensure you’re not overlooking another possibility.

Playing devil’s advocate with your ideas can allow you to preemptively identify weaknesses in your argument, and equip you to defend your strategy when others ask questions. It can also help you sharpen the logic skills you need to communicate and execute your strategy.

To develop this skill, get in the habit of questioning yourself any time you’re about to make an assertion. Should you consider a different perspective? Is there another possibility you may have overlooked?

4. Embrace Formal Training

By practicing the methods described above, you can improve your strategic thinking skills at your own pace. However, there are other learning options you can pursue.

If you need to quickly ramp up your strategy skills—to address a pressing need your organization is facing, position yourself for a new role, or finally launch your own business—formal training might be your best option.

For example, by enrolling in the online course Disruptive Strategy , you can discover how to make innovation a reality for your organization. Over six weeks, you’ll learn about the jobs to be done framework and disruptive innovation theory, and build skills to identify and execute high-level strategy.

Cultivating a Strategic Mindset

Whether in the long- or short-term, a strategic mindset can be developed through self-exploration, critical questioning, and formal training.

The advantage of having a strategic mindset is learning how to think rather than what to think. Although you might not always have the right answers, strategic thinking skills can empower you to spot new opportunities, address emerging challenges, and plan for future success.

Are you looking to develop a strategic mindset? Explore our portfolio of online strategy courses and download the free flowchart to determine which is the best fit for you and your goals.

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Strategic Thinking Definition, Skills, Examples, and Steps

Published: 29 January, 2024

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Welcome to Digital Leadership, where we are committed to harnessing emerging technologies and innovative business models to better serve customers. As experts in innovation and digital transformation, our mission is to guide organizations in creating value for all stakeholders, supporting them from strategic conceptualization to effective execution. The ability to think strategically is a cornerstone for success, strategic thinking centres on discovering and cultivating distinctive opportunities to enhance organizational value.

Digital Leadership’s expertise in strategy and execution, invites business entrepreneurs to delve deeper into the realms of strategic thinking for enduring success. We provide Strategic Management Consulting services to empower businesses to elevate their strategic acumen and navigate the complex landscape of value creation . Through collaborative initiatives, we guide organizations in unlocking unique opportunities and ensuring enduring success in today’s dynamic business environment.

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Corporate training, innovation consulting and much more.

This article delves into the intricacies of strategic thinking , outlining its definition, key characteristics, and its vital role in both leadership and business. We will explore the steps to develop strategic thinking skills and provide real-life examples to illustrate its application. As we navigate through this exploration, we will differentiate strategic thinking from strategic planning and highlight its significance in digital transformation strategy.

What is Strategic Thinking?

Strategic thinking is centred on identifying and cultivating distinctive opportunities that can generate value for your organization. It asserts that even non-statistically significant data in various forms deserves thorough consideration to inform decisions about the future. It is a multifaceted concept that goes beyond mere planning. It involves the ability to analyze situations, anticipate future trends, and make informed decisions that contribute to an organization’s long-term success.

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The UNITE Perspectives On Strategy – A Framework For Strategic Thinking

Strategic thinking is a crucial element of effective leadership, involving the ability to envision and plan for the future while navigating the complexities of the present. It goes beyond day-to-day tasks, focusing on long-term business goals and adapting to dynamic environments. Strategic thinking and strategic planning, while interconnected, serve distinct roles in organizational development and decision-making. Strategic thinking is a continuous and dynamic mental activity that envisions the future, identifies opportunities, and fosters innovation. It emphasizes creativity, adaptability, and a proactive mindset, laying the conceptual foundation for an organization’s direction.

Strategic planning is a systematic process that translates strategic thinking into actionable plans. It involves setting specific goals, defining measurable objectives, and outlining the steps and resources needed for implementation. While strategic thinking explores possibilities and challenges assumptions, strategic planning focuses on specific actions, resource allocation, and timelines. Strategic thinking is future-oriented and adaptable, providing the vision upon which strategic planning builds the roadmap for organizational development. Both are essential components, working collaboratively to navigate the complexities of the business landscape.

At Digital Leadership, strategic thinking is perceived as the art of proactively shaping an organization’s future. This involves anticipating challenges, recognizing opportunities, and aligning resources effectively. To delve deeper into the intricacies of strategic thinking and its role in crafting innovative business strategies , explore the insights provided in our book, “How to Create Innovation.” It serves as a comprehensive guide, offering valuable perspectives on navigating the dynamic landscape of strategic decision-making and fostering a culture of innovation within your organization.

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Strategic Thinking Skills

Enhancing strategic thinking skills is crucial for effective decision-making and leadership. Here are key skills compiled from various sources:

• Active Listening: Engage attentively to comprehend diverse perspectives.
• Analytical Skills: Utilize data and insights to make informed decisions.
• Implement the Plan: Execute strategies efficiently to achieve business goals.
• Observing and Seeking Trends: Stay vigilant to identify emerging patterns and trends.
• Question Everything: Foster a questioning mindset to challenge assumptions.
• Strategic Thinking: Cultivate the ability to envision and plan for the future.
• Understand the Consequences: Evaluate potential outcomes and impacts.
• Articulate Your Goals Clearly: Clearly express your objectives for better alignment.
• Being Creative: Embrace creativity to generate innovative solutions.
• Communicate Clearly: Convey ideas and strategies with clarity.
• Consider Opposing Ideas: Encourage diverse viewpoints for comprehensive decision-making.
• Critical Thinking: Assess information objectively to make well-founded decisions.
• Get Other Perspectives: Seek input from different sources to broaden your understanding.
• Learn and Improve: Embrace a continuous learning mindset for personal and professional growth.
• Vision and Purpose: Align decisions with a clear vision and overarching purpose.
• Prioritization: Effectively prioritize tasks and goals based on strategic importance.
• Adaptability: Be flexible and adapt strategies to changing circumstances.
• Ask Strategic Questions: Pose insightful questions to deepen strategic insights.
• Be Aware of Bias: Recognize and mitigate personal biases in decision-making.
• Analysis: Break down complex situations into manageable components for analysis.
• Scenario Planning: Anticipate potential scenarios and plan accordingly.

These skills collectively contribute to developing a robust strategic thinking mindset, essential for navigating complex business landscapes.

How to Develop Strategic Thinking Skills

Acquiring the art of strategic thinking is a developed skill, not an innate talent. This section outlines practical steps to guide individuals in enhancing their strategic thinking skills . Tailored for aspiring strategic thinkers and leaders, these steps offer valuable insights to successfully navigate the complexities of the business landscape.

(1) Pose Thoughtful Queries for Strategic Insights

Challenge conventional wisdom by formulating insightful questions that stimulate critical thinking, fostering a deeper understanding of issues and encouraging innovative solutions.

(2) Observe, Reflect, and Stay Informed

Allocate time to observe industry trends and changes, reflecting on these observations to gain valuable insights that inform strategic decisions.

(3) Embrace Diverse Perspectives Through Opposing Ideas

Foster a culture that values diverse viewpoints, actively seeking and considering opposing ideas to formulate well-rounded and robust strategic plans.

(4) Invest in Continuous Learning and Professional Development

Systematically refine strategic thinking skills through continuous learning. Enroll in courses, workshops, or programs dedicated to enhancing strategic thinking.

(5) Master Your Organization and Industry Dynamics

Acquire in-depth knowledge of your organization, industry, and market sector to make informed strategic decisions based on a comprehensive understanding of internal and external factors.

(6) Prioritize Strategic Thinking with Dedicated Time

Schedule specific time slots for focused strategic thinking in your routine. Utilize this time to address fundamental questions about your organization’s direction, challenges, and opportunities.

(7) Effectively Communicate Strategic Insights to Influence

Cultivate strong communication skills to articulate strategic insights clearly. Effective communication is pivotal for gaining support and buy-in for proposed strategic initiatives.

By systematically incorporating these steps into your professional journey, you actively develop and refine your strategic thinking skills. This intentional approach empowers you to confidently navigate the complexities of strategic decision-making.

Strategic Thinking Examples

Strategic thinking manifests in various scenarios, demonstrating its impact on organizational success. Below are real-life examples showcasing how strategic thinking has influenced key decisions and outcomes:

• Distinguish between urgent and important tasks to allocate resources efficiently and achieve optimal outcomes.
• Strategically allocate resources based on the prioritization of tasks, ensuring maximum efficiency and effectiveness.
• Systematically analyze customer feedback to identify trends and insights, informing strategic decisions for product enhancements and customer satisfaction.
• Develop a strategic roadmap by setting both long-term and short-term business goals aligned with the organization’s overarching vision.
• Utilize past sales data to derive insights, identify patterns, and inform strategic decisions for future product development and market positioning.
• Conduct thorough market analysis to identify gaps and opportunities, allowing for strategic entry or expansion into specific market segments.
• Evaluate the alignment between products and market demands, ensuring a strategic fit that resonates with the target audience.
• Develop and implement a deliberate brand positioning strategy that aligns with market trends, consumer preferences, and organizational values.

These examples showcase how strategic thinking is applied across various facets of business operations. By integrating these practices, organizations can foster a strategic mindset, leading to informed decision-making and sustainable success.

In a real-world scenario, imagine a tech company facing fierce market competition and disruptive technological shifts. A strategic thinker in the managerial role would first pinpoint the challenges: intense competition and the impact of tech disruptions. By actively analyzing industry trends and asking crucial questions, such as how to stand out in a crowded market, strategic thinking takes shape.

Encouraging team discussions to gather diverse perspectives ensures a comprehensive understanding of potential strategies. Crafting innovative solutions collaboratively, like exploring unique product features or strategic partnerships, follows. Proactively anticipating future challenges and formulating contingency plans showcase the hands-on nature of strategic thinking.

Effective communication of the strategic vision is crucial. Aligning stakeholders, fostering commitment to the plan, and conveying a well-defined vision are integral. This example highlights that strategic thinking is not just theory; it’s a practical skill with tangible outcomes in navigating complex business landscapes.

What is Strategic Thinking in Leadership

Strategic thinking in leadership goes beyond day-to-day decision-making; it involves a comprehensive approach to envisioning and navigating an organization’s future. It’s the capability of leaders to analyze the current landscape, anticipate future challenges and opportunities, and formulate innovative strategies to drive the organization toward success. Here’s a deeper exploration of what strategic thinking entails in leadership:

• Visionary Leadership: Strategic thinking leaders possess a visionary outlook, setting a clear and inspiring direction for the organization’s future.
• Long-Term Planning: Instead of focusing solely on immediate concerns, strategic leaders plan for the long term, considering sustainable growth and evolution.
• Adaptability: Leaders who think strategically are adaptable, and ready to adjust strategies in response to changing circumstances and market dynamics.
• Risk Management: They evaluate risks meticulously, making calculated decisions that balance potential rewards with potential pitfalls.
• Innovation Advocacy: Encouraging innovation is a key aspect. Strategic leaders foster a culture where novel ideas are valued, leading to continuous improvement.
• Decision-Making: Strategic thinking leaders make decisions based on a holistic understanding of the organization’s goals, industry trends, and competitive landscape.
• Collaborative Approach: They understand the importance of collaboration, seeking input from diverse teams to enhance the quality of strategic decisions.
• Communication Skills: Effective communication is paramount. Leaders articulate the strategic vision in a way that inspires and aligns the entire organization.
• Alignment with Values: Strategic leaders ensure that strategic initiatives align with the organization’s core values and mission.
• Continuous Learning: Leaders committed to strategic thinking engage in continuous learning, staying informed about industry advancements and emerging trends.

In essence, strategic thinking in leadership is about proactively shaping the organization’s future, and making informed choices that lead to sustained success and relevance in a dynamic business environment.

Key Characteristics of Strategic Thinking

Strategic thinking is a multifaceted skill encompassing various key characteristics that contribute to its effectiveness. These attributes set strategic thinkers apart and form the foundation for navigating complex business landscapes. Here are the key characteristics of strategic thinking:

• Forward-Thinking: Strategic thinkers have a future-oriented mindset, anticipating trends, challenges, and opportunities to proactively shape the organization’s destiny.
• Analytical Acumen: The ability to analyze vast amounts of information, discern patterns, and derive meaningful insights is crucial for strategic thinking.
• Innovative Vision: Strategic thinkers embrace innovation, seeking novel solutions and envisioning possibilities that disrupt conventional norms.
• Adaptability: Recognizing the dynamic nature of the business environment, strategic thinkers are adaptable and agile in responding to changes and uncertainties.
• Holistic Perspective: They consider the bigger picture, understanding the interconnectedness of various elements within and outside the organization.
• Risk Assessment: Strategic thinkers evaluate risks objectively, weighing potential rewards against potential drawbacks and making informed decisions.
• Long-Term Orientation: Rather than focusing solely on short-term gains, strategic thinkers prioritize long-term objectives and sustainable growth.
• Open-Mindedness: Embracing diverse perspectives and being receptive to new ideas fosters a climate of creativity and robust strategic planning.
• Effective Communication: Strategic thinkers communicate their vision and plans clearly, ensuring alignment and understanding throughout the organization.
• Results-Driven: Ultimately, strategic thinkers are driven by results, aiming to create lasting value and impact for the organization’s stakeholders.

These key characteristics collectively empower individuals to think strategically, guiding organizations toward success in today’s dynamic and competitive business landscape.

Strategic Thinking in Business

Strategic thinking in the realm of business is a dynamic and critical process that involves the exploration and refinement of existing business models . This approach entails a comprehensive evaluation of the strengths and weaknesses inherent in the current model. By strategically thinking, businesses can foster innovation, identify new revenue streams , optimise operational processes, and adjust to the evolving demands of the market. This strategic perspective is essential for staying competitive and ensuring long-term success in the business landscape.

Applying Strategic Thinking to Business Models

Strategic thinking serves as a catalyst for transforming and optimizing traditional business models. This process entails a meticulous examination of the current model, pinpointing both its strengths and weaknesses. Through strategic thinking, businesses can unleash innovation by exploring novel revenue streams, refining operational processes, and adapting to the ever-changing landscape of market demands. This application of strategic thinking is instrumental in steering businesses towards resilience, growth, and sustained success.

The Business Model Canvas becomes a crucial tool in the strategic thinking process. It provides a visual framework for understanding, designing, and reinventing business models. By leveraging the canvas, organizations gain insights into key components such as value proposition , customer segments, channels , and cost structures. This clarity enhances strategic decision-making and fosters a more agile and adaptive business model.

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The significance of strategic thinking in digital transformation.

In digital transformation, strategic thinking holds immense significance. It serves as the guiding force that shapes and directs the course of digital initiatives. It ensures a holistic approach, considering not only technological aspects but also the broader implications on business models, processes, and customer experiences. By strategically navigating the complexities of the digital transformation strategy , organizations can leverage emerging technologies effectively, enhance operational efficiency, and stay ahead in the competitive digital landscape. The application of strategic thinking becomes a linchpin for organizations aiming to achieve meaningful and sustainable digital transformation outcomes.

Real-Life Examples of Strategic Thinking in Business

To illustrate the tangible impact of strategic thinking, let’s delve into real-life examples where organizations successfully applied this approach to achieve remarkable outcomes.

• Apple Inc.: Apple’s strategic thinking is evident in its continuous innovation and product development. The introduction of the iPod, iPhone, and iPad showcased a forward-thinking approach that revolutionized the consumer electronics industry.
• Amazon: Amazon’s strategic thinking is exemplified in its customer-centric model and diversification. The company started as an online bookstore and strategically expanded into diverse product categories, cloud services (AWS), and even original content creation.
• Tesla: Tesla’s strategic thinking is embodied in its pursuit of sustainable energy solutions. The decision to focus on electric vehicles, solar energy, and energy storage reflects a long-term vision that goes beyond automotive manufacturing.
• Netflix: Netflix’s strategic thinking is evident in its shift from a DVD rental service to a global streaming platform. Embracing digital disruption, Netflix strategically invested in original content creation, transforming the entertainment industry.
• Google: Google’s strategic thinking is showcased in its commitment to innovation. From dominating the search engine market, Google expanded into diverse areas such as online advertising, mobile operating systems (Android), and artificial intelligence.

Differentiating Strategic Thinking from Other Types of Thinking

Thinking is a multifaceted cognitive process that varies across different contexts and objectives. Let’s delve into the distinctions between strategic thinking and other types of thinking:

• Strategic Thinking: Involves envisioning the future, identifying opportunities, and devising plans to achieve long-term goals.
• Critical Thinking: Focuses on analyzing, evaluating, and forming judgments about information or situations, emphasizing logical reasoning.
• Strategic Thinking: Emphasizes planning and decision-making for achieving organizational objectives, often involving a systematic approach.
• Creative Thinking: Involves generating novel ideas, solutions, or approaches, fostering innovation and unconventional thoughts.
• Strategic Thinking: Encompasses a holistic view, considering the overall direction and positioning of the organization.
• Analytical Thinking: Concentrates on breaking down complex problems into smaller components for in-depth examination and understanding.
• Strategic Thinking: Primarily concerned with defining goals, formulating plans, and aligning resources to achieve a predefined vision.
• Design Thinking: Centers around a human-centric approach, empathizing with end-users, and iteratively prototyping solutions for complex problems.
• Strategic Thinking: Focuses on organizational strategy, often involving hierarchical planning and coordination.
• Systems Thinking: Considers the interrelated components and relationships within a system, emphasizing holistic understanding and feedback loops.
• Strategic Thinking: Involves dynamic, adaptive, and non-linear planning, considering various scenarios and external influences.
• Linear Thinking: Follows a sequential and step-by-step approach to problem-solving without necessarily accounting for broader systemic factors.
• Strategic Thinking: Concentrates on forward-looking planning, often in a structured manner, to gain a competitive advantage.
• Lateral Thinking: Encourages unconventional and creative approaches to problem-solving, challenging traditional thought patterns.

Understanding these differences is crucial as it highlights the versatility of thinking processes and underscores the need for a well-rounded cognitive toolkit, incorporating strategic thinking when long-term planning and vision are paramount.

In conclusion, strategic thinking is the compass that guides businesses through the complexities of today’s ever-evolving landscape. By developing and nurturing strategic thinking skills , organizations can pave the way for sustained success and create value for everyone they serve. At Digital Leadership, we are passionate about empowering organizations to embrace strategic thinking. If you’re ready to elevate your strategic approach, contact us today for a transformative journey from strategy to execution.

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Strategic Thinking: Because Good Ideas Can Come From Anywhere

As part of our update to the Harvard ManageMentor Strategic Thinking topic, we asked Mason Weintraub, Director of Digital Engagement at Oxfam America, about the importance of strategic thinking. Here’s what Mason had to say:

I often think I’m expected to have all the answers about what to do with digital strategy. But the reality is that I lead a very talented team, and one of the ideas that we have tried to engender on the team is that good ideas can come from anywhere.

“Good ideas can come from anywhere.” Most of us recognize the wisdom embedded in that statement, yet we still see strategy as the realm of our organization’s senior leaders. That may be because of our tendency to equate strategic thinking with strategic planning. Although these practices are related and equally necessary for organizational success, they are actually quite distinct.

Strategic planning vs. strategic thinking

In strategic planning, leaders gather data and decide on the path the organization will take to achieve its goals. 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. In this way, strategic thinking is part of everyone’s job – whatever their role or level of responsibility.

Why is this ability to think strategically especially important now? Today’s organizations are more dispersed and less hierarchical than ever before. With the pace of change continuing to rise, it’s no longer feasible for people to wait for “orders from above.” All employees must keep an eye on the future, not just react to what’s happening in the present. They need to look beyond their functional areas to become aware of the bigger context in which they operate. And they have to be agile learners who identify opportunities by challenging their own and their team’s assumptions about how things work in their organization and industry.

Becoming a strategic thinker

With strategic thinking taking on even greater importance in organizations, we’ve made key updates to the Harvard ManageMentor Strategic Thinking topic. The content we’ve added is geared to helping people boost their productivity and effectiveness by making strategic thinking a habit, and includes practical ways that enable them to do so.

One practice is simply making the time to think strategically – something that’s not always easy in today’s fast-paced business settings. Another involves inviting dissent on your team. To make strategic 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.

Other strategic thinking practices are useful for training yourself to see opportunities and threats well before they happen. For example, most of us are comfortable using convergent thinking – analysis, logic, and reasoning – to come up with the “best” option from a set of choices. We tend to be less adept at divergent thinking, which involves generating lots of ideas with the goal of finding innovative solutions. This isn’t an either-or process: When you first diverge as a team to generate ideas and then converge on a path forward, you improve your ability to design and implement strategic actions.

Don’t let the future surprise you

The future will undoubtedly look a lot different from today. No one can predict tomorrow, but by identifying different scenarios, you and members of your team stretch your thinking about what opportunities and threats might emerge, how they might impact your organization, and what you can do about them. You learn to enact truly meaningful change rather than make incremental improvements. And it all begins with strategic thinking.

How do you foster strategic thinking throughout your organization?

Janice Molloy is a content researcher with Harvard Business Publishing Corporate Learning. Email her at  [email protected] . 

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How To Use Strategic Thinking as an Entrepreneur

Updated: August 20, 2024

Published: September 06, 2023

Entrepreneurs come in all shapes and sizes, but one thing they invariably have in common is vision. They see opportunities to innovate and improve the things around them. 

But is vision enough?

As author, professor, and organizational behavior expert Lee Bolman says, “A vision without a strategy remains an illusion.” 

In other words, vision alone can’t build companies, create change, or weather the ups and downs of your professional life. You need strategic thinking skills to turn your ideas into reality despite the obstacles in your way.

What is strategic thinking?

At its most basic level, strategic thinking is the ability to analyze the present and solve complex problems to plan for future success. It involves intentionally considering your strengths and weaknesses and how they might interact with opportunities and threats in the environment.

Strategic thinking lets you view the day-to-day operations of your business through a big-picture lens. This allows you to more effectively evaluate how the decisions you make today will impact your future growth. 

The importance of strategic thinking in business

Strategic thinking skills help you identify opportunities for your business and come up with a plan to take advantage of them. By doing so, you can increase your market share and profit, helping to create long-term growth .

In particular, developing strategic thinking skills can help you do the following:

• Improve decision-making: Strategic thinking gives you the tools to analyze a challenge and make informed decisions to move your company forward. As a result, you avoid indecision paralysis. 
• Identify priorities: If you’re like most business owners, you have limited resources and seemingly unlimited things to accomplish. By honing your strategic thinking skills, you can better identify the actions that are most likely to generate long-term growth and de-prioritize tasks that may get in the way of high-impact work.
• Focus on the big picture: The strategic planning process goes beyond defining day-to-day work. It involves looking at your business holistically and choosing strategies and initiatives that create short- and long-term growth.
• Create competitive advantages: By looking forward and anticipating trends, you can position your company as an early adapter. This allows you to build your market share while others are working to catch up.
• Minimize risk : When you consider the future impact of your decisions, you’re better able to avoid choices that might hurt consumer or stakeholder trust and put your startup at legal or financial risk.

Types of strategic thinking skills

Strategic thinking skills help you develop possible solutions for a complex problem and then identify which path forward will optimize your chances of success. 

Here are a few skills that fall under the umbrella of strategic thinking:

• Critical thinking: Analyzing a problem or situation, often by breaking it down into smaller components and observing how various factors and inputs interact
• Problem-solving: Identifying and prioritizing problems then developing solutions and taking action
• Communication: Explaining a problem, asking for insight, and collaborating to come up with a solution
• Objectivity: Viewing your business and its challenges without personal bias, or the ability to recognize and filter your biases
• Environmental scanning: Regularly keeping an eye on internal and external factors that may impact the future growth of your business, such as product development, competitors, and regulations

Effective strategic thinkers aren’t necessarily born with these skills. Instead, they recognize the importance of these abilities and take steps to learn and practice them. 

How to develop strategic thinking skills

Here are strategies you can use to cultivate and maintain your strategic thinking skills to become a better leader and decision-maker for your business.

Conduct SWOT analyses

The SWOT analysis framework looks at your strengths, weaknesses, opportunities, and threats. It’s a valuable tool for strategic thinking because it forces you to honestly consider your company’s competitive position and the context of your business environment. 

Here’s a quick breakdown of each category:

• Strengths: Your company’s core competencies, including your competitive advantages , internal resources, and intellectual property
• Weaknesses: Things your company lacks or areas where your competitors outperform you
• Opportunities: External factors and trends that benefit you, such as positive press coverage, an increase in demand for your products, and having few competitors
• Threats: External factors and trends that present challenges, such as an economic recession, a decrease in consumer demand, or an increase in competition

This type of analysis is beneficial because it involves proactively looking for threats and opportunities. By doing so, you give yourself more time to respond to threats or take advantage of opportunities before your competition does.

Continue educating yourself

Strategic thinkers are lifelong learners . In order to make informed decisions, you have to be constantly studying up on your business and the world around you.

Phil Portman, founder of the SMS marketing software company Textdrip, recommends that entrepreneurs keep learning “through reading books, attending seminars, joining industry associations, and engaging in online courses or webinars.”

By keeping your skills sharp and your knowledge current, you’ll be better able to identify threats and opportunities for your business. Not to mention, you’ll have more resources to draw from as you craft creative solutions to potential problems.

Seek out diverse perspectives

While continuing education is essential to strategic thinking, it’s important to realize you can’t learn everything there is to know. Instead, you can collaborate with others who have different experiences and ways of thinking.

For instance, if you have expertise in finance, consider working with people who have scientific, engineering, or creative backgrounds. 

Talking through problems with people who use different approaches opens your mind to new thinking processes. It also can help you identify a solution you may not have seen on your own.

As an entrepreneur, you can take this one step further and actively seek senior executives with different experiences than you. 

Argue both sides

Learning to argue both sides of an issue can help you identify potential weaknesses in your approach. Analyzing the pros and cons of a business strategy forces you to gather more information and stress-test the logic you used to arrive at a given conclusion. 

Cultivating a strategic mindset can also include asking others to help you assess your proposed initiatives. Joan Denizot, founder of the bicycle company Zize Bikes, tells other entrepreneurs to “actively seek feedback from mentors, advisers, and peers. Constructive criticism can help identify blind spots and refine your strategic thinking approach.”

Embrace creativity

Creativity is the ability to bring about something new, whether it’s a product, business model, or solution to a problem. As an entrepreneur, you likely have some innate creativity in you. That said, it’s crucial to continue to sharpen your creative skills. 

The Harvard Business Review notes that brainstorming, proactive problem-finding, time blocking, delaying decisions, and accepting failures can all boost creativity. Creativity tactics like these give you the time and space your mind needs to break free of conventional thinking and come up with new ideas.

Ask strategic questions

Strategic questions focus on the big picture of your company and invite others to consider the long-term impact of decisions. When you ask yourself and others these big questions, you break free from your day-to-day thinking and can see the whole forest, not just the trees. 

Asking strategic questions can help identify priorities and stimulate creative solutions to current problems.

Examples of strategic questions to ask include:

• What does success for the company look like in five years?
• What is the biggest challenge our company is facing?
• What do we need to do to win against our main competitors?
• Which part of our business has the most potential for future growth?

Learn from the experience of others

People do some of their best learning through experience, but that’s not always feasible for entrepreneurs. If you’re just beginning your journey — or want to enter a new market — you may not have a trove of relevant experience. 

As an entrepreneur, you can get impactful lessons by observing other businesses. Tim Cameron-Kitchen, founder of the digital marketing agency Exposure Ninja, recommends that entrepreneurs “study successful companies and analyze their strategies to understand how they achieved their goals.”

Remember that failure is also a valuable learning tool . Look at the wins and losses of these companies to uncover possible pitfalls and understand how successful leaders respond to setbacks. 

By learning through others, you can avoid costly mistakes that are especially dangerous for young companies with limited financial runway.

Becoming a strategic thinker as an entrepreneur

When trying to create a new business or product, you want to be armed with more than just a vision in your head. You need to know how to reach each milestone, whether that’s finding the right co-founder, crafting your first prototype, or securing investment capital . 

That’s where a strategic mindset comes in. Cultivating your strategic thinking skills will enable you to become a leader who can reach short-term goals in a way that sets your business up for success in the long run. 

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What is Strategic Thinking? A Complete Guide

Explore our blog on What is Strategic Thinking and learn how to make informed decisions and identify opportunities and threats to set achievable goals. Understand the fundamentals and key elements that underpin this cognitive skill. Discover the benefits of Strategic Thinking and learn how to cultivate it.

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It is not just a buzzword, or a fancy phrase thrown around in the business world. It is a crucial skill that can be applied in various aspects of life, from personal relationships to professional endeavours. So, to step on the ladder to success, it is crucial to understand the concept in detail. Further, this blog will delve deeper into What is Strategic Thinking by exploring its definition, key elements, benefits, and practical tips to develop and enhance this skillset. 

Table of Contents   

1) Understanding What is Strategic Thinking

2) Benefits of Strategic Thinking

3) Key elements of Strategic Thinking

4) How to improve Strategic Thinking Skills?

5) Conclusion  

Understanding What is Strategic Thinking

Strategic Thinking stands as a keystone of intentional and rational thought processes essential for navigating the complexities of business, team dynamics, or individual endeavours. It encompasses a deliberate analysis of critical factors and variables influencing long-term success. This multifaceted approach entails careful consideration of present circumstances and envisioning future scenarios, anticipating potential threats, and identifying lucrative opportunities.

Central to Strategic Thinking is the proactive identification and mitigation of risks while capitalising on emerging prospects. Individuals and organisations can navigate uncertainties with agility and resilience by cultivating a strategic mindset.Moreover, Strategic Thinking extends beyond mere planning; it requires a synthesis of research, analytical acumen, and creative problem-solving. It demands an openness to new ideas and a willingness to challenge conventional wisdom, fostering an environment conducive to innovation and growth. Influential strategic thinkers possess strong communication and leadership skills, enabling them to articulate visions, mobilise resources, and inspire action.

Strategic Thinking is not limited to top-level executives or leaders. It is a skill that can benefit anyone looking to make better decisions and achieve desired outcomes in both personal and professional settings. It can be a powerful tool whether you're an entrepreneur aiming to grow your business, a student planning your academic path, or even an individual seeking personal growth.   

Why is Strategic Thinking important?

Strategic Thinking is indispensable for achieving long-term success, fostering adaptability, mitigating risks, identifying opportunities, optimising resources, solving problems, making sound decisions, and cultivating effective Leadership.

It serves as a guiding compass for individuals and organisations navigating the complexities of an ever-changing world. Strategic Thinking holds paramount importance in various aspects of life, business, and organisational management due to several key reasons:

1) Adaptability: Strategic Thinking enables individuals and organisations to anticipate and respond effectively to shifts in the external environment, whether technological advancements, market trends, or regulatory changes.

2) Risk mitigation: Strategic Thinking involves proactively assessing potential risks and vulnerabilities. By identifying threats early on, individuals and organisations can implement measures to mitigate risks, safeguarding against potential disruptions and setbacks.

3) Problem-solving: Strategic Thinking equips individuals with the analytical skills and creative mindset necessary for effective problem-solving. By approaching challenges strategically, individuals can identify root causes, explore alternative solutions, and implement strategic interventions to address complex issues.

4) Decision-making: Strategic Thinking provides a structured framework for decision-making. By weighing the potential outcomes and consequences of different courses of action, individuals can make informed decisions that align with overarching objectives and priorities.

5) Leadership development: Strategic Thinking is a hallmark trait of influential leaders. By cultivating Strategic Thinking skills, individuals can inspire and motivate others, foster innovation, and navigate organisational challenges confidently and clearly.

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Benefits of Strategic Thinking

Strategic Thinking is a skill that offers a multitude of benefits, empowering individuals to navigate challenges, seize opportunities, and achieve their goals. Here's how it helps individuals:

Enhanced decision-making  

Strategic Thinking equips individuals with a structured approach to decision-making. By considering various factors, analysing data, and anticipating future outcomes, Strategic Thinkers are better positioned to make informed and effective decisions. This ability to evaluate options and weigh potential risks leads to more favourable outcomes and minimises the likelihood of costly mistakes.  

Improved problem-solving  

It goes beyond addressing immediate problems and focuses on long-term solutions. It encourages individuals to identify the root causes of challenges and develop comprehensive strategies to overcome them. By employing a systematic and forward-thinking approach, Strategic Thinkers can find innovative solutions that address underlying issues, leading to more sustainable resolutions.  

Goal alignment and focus  

Strategic Thinking helps individuals align their actions and decisions with their overall goals. By considering the bigger picture and evaluating how different choices contribute to their desired outcomes, Strategic Thinkers can focus and prioritise tasks that truly matter. This clarity of purpose enables individuals to allocate their time and resources efficiently, resulting in increased productivity and progress towards their objectives.

Anticipation of trends and opportunities  

Strategic thinkers have an innate ability to anticipate emerging trends and identify opportunities before others do. They can proactively leverage favourable trends and capitalise on emerging opportunities by staying informed, analysing market dynamics, and considering the future landscape. This foresight enables Strategic Thinkers to stay one step ahead of the competition and make timely moves that drive success.

Effective resource management

Strategic Thinking involves assessing available resources and optimising their utilisation. By considering the strengths and limitations of resources, Strategic Thinkers can allocate them strategically to achieve maximum impact. This efficient resource management ensures that individuals make the most of their time, money, and other assets, resulting in greater efficiency and effectiveness in their endeavours.

Adaptability

In a dynamic and rapidly evolving world, adaptability is crucial for success. Strategic Thinking cultivates a mindset that embraces change and encourages individuals to be flexible in their approaches. By anticipating and embracing change, Strategic thinkers can navigate uncertainties, adapt their strategies, and seize opportunities that arise from shifting circumstances.  

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Key elements of Strategic Thinking  

Observation

Strategic Thinking hinges on discerning pertinent information and assimilating it effectively. Observation, therefore, plays a pivotal role as it furnishes strategic thinkers with the insights crucial for informed decisions and meticulous planning. The accumulation and analysis of relevant data serve as the bedrock upon which strategic plans are built.

Planning, a cornerstone of Strategic Thinking, entails a multidimensional approach. It requires a deep understanding of prevailing circumstances, organisational imperatives, and insights from observation and analysis. Strategic planners adeptly delineate achievable objectives, charting a course of action while anticipating potential challenges and opportunities. 

Extensive research, including competitor analysis, is often integral to planning, enabling informed decision-making and proactive adaptation to market dynamics. Strategic planning is a comprehensive endeavour analysing insights, objectives, and resources to chart a path toward organisational success.

Creativity and innovation  

It encourages creative and innovative approaches to problem-solving. It involves thinking outside the box, generating fresh ideas, and exploring unconventional solutions. By embracing creativity, Strategic Thinkers can uncover new opportunities, challenge existing norms, and find unique ways to achieve their objectives.

Adaptability   

Strategic Thinking requires adapting and adjusting plans based on changing circumstances. It involves being open to new information, embracing alternative perspectives, and being willing to revise strategies when necessary. Adaptability allows Strategic thinkers to navigate uncertainties and seize emerging opportunities, ensuring they stay on the right path towards their goals.  

Systematic thinking  

Strategic thinkers understand that actions and decisions have ripple effects across interconnected systems. They consider the broader ecosystem in which they operate and analyse how different variables interact. By taking a systematic thinking approach, Strategic thinkers can identify leverage points, understand interdependencies, and make holistic decisions that address multiple aspects of a situation.  

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How to improve Strategic Thinking skills?

Strategic Thinking is important for success in today's dynamic and competitive world. It involves analysing complex situations, anticipating future trends, and making effective action plans. Fortunately, Strategic Thinking Skills can be used and developed over time through deliberate practice and a focus on continuous improvement. Here's a comprehensive guide on how to enhance your Strategic Thinking abilities:

Cultivate curiosity and open-mindedness:

Strategic Thinking begins with a curious and open mindset. Foster a habit of questioning assumptions, exploring alternative perspectives, and seeking new information. Embrace diverse viewpoints and be receptive to feedback and constructive criticism. Cultivating curiosity helps expand your mental horizons and lets you see possibilities beyond the obvious.

Develop a big-picture perspective:

Influential strategic thinkers have a knack for seeing the forest for the trees. Develop the ability to zoom out and analyse situations from a broader perspective. Consider the long-term implications of decisions and actions and strive to understand how different variables interconnect. This holistic view allows you to identify patterns, trends, and potential opportunities or disadvantages that may not be immediately apparent.

Enhance analytical skills

Analytical thinking is fundamental to strategic decision-making. Sharpen your analytical skills by practising critical thinking, problem-solving, and data analysis. Learn to evaluate information objectively, identify critical insights, and draw logical conclusions. Use tools such as SWOT analysis, scenario planning, and risk assessment to assess situations comprehensively and make informed decisions.

Foster creative problem-solving

Strategic Thinking often requires thinking outside the box and finding innovative solutions to complex challenges. Cultivate your creativity by brainstorming, lateral thinking exercises, and mind mapping. Encourage experimentation and take failure as an opportunity for learning and growth. By fostering a culture of creativity, you'll be better equipped to generate novel ideas and approaches.

Practice systems thinking

Develop a “systems thinking” mindset by recognising the interconnectedness of various components within a system. Understand how changes in one aspect of the system can affect the entire system. Use causal loop diagrams, flowcharts, and other tools to visualise relationships and feedback loops. Systems thinking allows you to anticipate the unintended consequences of decisions and develop more robust strategies.

Cultivate strategic agility

Adaptability and flexibility are essential for strategic success in today's fast-paced world. Cultivate strategic agility by embracing change, staying abreast of emerging trends, and adjusting your plans accordingly. Be willing to pivot and course-correct based on new information or shifting circumstances. Develop resilience to navigate uncertainty and thrive in dynamic environments.

Seek feedback and continuous learning

Feedback is invaluable for improving Strategic Thinking skills. Actively seek input from peers, mentors, and stakeholders to understand different perspectives and identify blind spots. Be open to constructive criticism and use it as an opportunity for self-reflection and growth. Additionally, commit to continuous learning by staying updated on industry trends, best practices, and new technologies.

Practice strategic decision-making

Finally, practice your Strategic Thinking skills by making strategic decisions in both professional and personal contexts. Start with small-scale decisions and gradually tackle more complex challenges. Evaluate the outcomes of your choices, reflect on lessons learned, and refine your approach over time. By embracing strategic decision-making as a habit, you'll strengthen your Strategic Thinking muscle and become more adept at navigating uncertainty and driving success.

Conclusion  

We hope that after reading this blog, you have understood What is Strategic Thinking and its significance. It is not just a skill reserved for top-level executives; it is a valuable skill anyone can develop and apply in various aspects of life. It involves analysing situations, making long-term decisions, and connecting the dots to achieve desired outcomes. With this skill as your guiding compass, you can navigate complexities and unlock endless possibilities for success and personal fulfillment. 

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Frequently Asked Questions

Strategic Thinking is pivotal in leadership and career growth, guiding decisions towards long-term objectives. It fosters innovation, problem-solving, and adaptability, essential for navigating complexities and driving success in dynamic environments.

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Thinking strategically

In the late 1970s, Fred Gluck led an effort to revitalize McKinsey’s thinking on strategy while, in parallel, Tom Peters and Robert Waterman were leading a similar effort to reinvent the Firm’s thinking on organization. The first published product of Gluck’s strategy initiative was a 1978 staff paper, "The evolution of strategic management."

The ostensible purpose of Gluck’s article was to throw light on the then-popular but ill-defined term "strategic management," using data from a recent McKinsey study of formal strategic planning in corporations. The authors concluded that such planning routinely evolves through four distinct phases of development, rising in sophistication from simple year-to-year budgeting to strategic management, in which strategic planning and everyday management are inextricably intertwined.

But the power of the article comes from the authors’ insights into the true nature of strategy and what constitutes high-quality strategic thinking. The article is also noteworthy for setting forth McKinsey’s original definition of strategy as "an integrated set of actions designed to create a sustainable advantage over competitors" and includes a description of the well-known "nine-box" matrix that formed the basis of McKinsey’s approach to business portfolio analysis.

Ten years later, a team from the Firm’s Australian office took portfolio analysis a step further. Rather than basing portfolio strategy only on metrics of a business unit’s absolute attractiveness, as suggested by the nine-box matrix, John Stuckey and Ken McLeod recommended adding a key new decision variable: how well-suited is the parent company to run the business unit as compared with other possible owners? If the parent is best suited to extract value from a unit, it often makes no sense to sell, even if that unit doesn’t compete in a particularly profitable industry. Conversely, if a parent company determines that it is not the best possible owner of a business unit, the parent maximizes value by selling it to the most appropriate owner, even if the unit happens to be in a business that is fundamentally attractive. In short, the "market-activated corporate strategy framework" prompts managers to view their portfolios with an investor’s value-maximizing eye.

The evolution of strategic management

Frederick W. Gluck, Stephen P. Kaufman, and A. Steven Walleck

A minor but pervasive frustration that seems to be unique to management as a profession is the rapid obsolescence of its jargon. As soon as a new management concept emerges, it becomes popularized as a buzzword, generalized, overused, and misused until its underlying substance has been blunted past recognition. The same fate could easily befall one of the brightest new concepts to come along lately: strategic management.

In seeking to understand what strategic management is, we have conducted a major study of the planning systems at large corporations. This study is unique in that it attempts to pass judgment on the quality of the business plans produced rather than only on the planning process.

We found that planning routinely progresses through four discrete phases of development. The first phase, financial planning, is the most basic and can be found at all companies. It is simply the process of setting annual budgets and using them to monitor progress. As financial planners extend their time horizons beyond the current year, they often cross into forecast-based planning, which is the second phase. A few companies have advanced beyond forecast-based planning by entering the third phase, which entails a profound leap forward in the effectiveness of strategic planning. We call this phase externally oriented planning, since it derives many of its advantages from more thorough and creative analyses of market trends, customers, and the competition. Only phase four—which is really a systematic, company-wide embodiment of externally oriented planning—earns the appellation strategic management, and its practitioners are very few indeed.

It doesn’t appear possible to skip a step in the process, because at each phase a company adopts attitudes and gains capabilities needed in the phases to come. Many companies have enjoyed considerable success without advancing beyond the rudimentary levels of strategic development. Some large, successful enterprises, for instance, are still firmly embedded in the forecast-based planning phase. You might well ask, are these companies somehow slipping behind, or are they simply responding appropriately to an environment that changes more slowly? The answer must be determined on a case-by-case basis.

Phase one: Financial planning

Financial planning, as we have said, is nothing more than the familiar annual budgeting process. Managers forecast revenue, costs, and capital needs a year in advance and use these numbers to benchmark performance. In well over half of the companies McKinsey studied—including some highly successful ones—formal planning was still at this most basic phase.

Note the word formal. Many firms that lack a sophisticated formal planning process make up for it with an informal "implicit strategy" worked out by the chief executive officer and a few top managers. Formal strategic planning, in fact, is just one of the possible sources of sound strategy development. There are at least two others: strategic thinking and opportunistic strategic decision making (Exhibit 1). All three routes can result in an effective strategy, which we define as "an integrated set of actions designed to create a sustainable advantage over competitors."

Phase-one companies, then, do have strategies, even though such companies often lack a formal system for planning them. The quality of the strategy of such a company depends largely on the entrepreneurial vigor of its CEO and other top executives. Do they have a good feel for the competition? Do they know their own cost structures? If the answer to such questions is yes, there may be little advantage to formal strategic planning. Ad-hoc studies by task forces and systematic communication of the essence of the strategy to those who need to know may suffice.

Phase two: Forecast-based planning

Still, most large enterprises are too complex to be managed with only an implicit strategy. Companies usually learn the shortcomings of phase-one planning as their treasurers struggle to estimate capital needs and make trade-offs among various financing plans, based on no more than a one-year budget. Ultimately, the burden becomes unbearable, and the company evolves toward phase two. At first, phase-two planning differs little from annual budgeting except that it covers a longer period of time. Very soon, however, planners become frustrated because the real world does not behave as their extrapolations predict. Their first response is usually to develop more sophisticated forecasting tools: trend analysis, regression models, and, finally, simulation models.

This initial response brings some improvement, but sooner or later all extrapolative models fail. At this point, a creative spark stirs the imaginations of the planners. They suddenly realize that their responsibility is not to chart the future—which is, in fact, impossible—but, rather, to lay out for managers the key issues facing the company. We call this spark "issue orientation."

The tough strategic issue that most often triggers the move to issue orientation is the problem of resource allocation: how to set up a flow of capital and other resources among the business units of a diversified company. The technique most commonly applied to this problem is portfolio analysis, a means of depicting a diversified company’s business units in a way that suggests which units should be kept and which sold off and how financial resources should be allocated among them. McKinsey’s standard portfolio analysis tool is the nine-box matrix (Exhibit 2), in which each business unit is plotted along two dimensions: the attractiveness of the relevant industry and the unit’s competitive strength within that industry. Units below the diagonal of the matrix are sold, liquidated, or run purely for cash, and they are allowed to consume little in the way of new capital. Those on the diagonal—marked "Selectivity, earnings"—can be candidates for selective investment. And business units above the diagonal, as the label suggests, should pursue strategies of either selective or aggressive investment and growth.

Phase three: Externally oriented planning

Once planners see their main role as identifying issues, they shift their attention from the details of their companies’ activities to the outside world, where the most profound issues reside. The planners’ in-depth analyses, previously reserved for inwardly focused financial projections, are now turned outward, to customers, potential customers, competitors, suppliers, and others. This outward focus is the chief characteristic of phase three: externally oriented planning.

The process can be time-consuming and rigorous—scrutinizing the outside world is a much larger undertaking than studying the operations of a single company—but it can also pay off dramatically. Take the example of a heavy-equipment maker that spent nine person-months reverse engineering its competitor’s product, reconstructing that competitor’s manufacturing facilities on paper, and estimating its production costs. The result: the company decided that no achievable level of cost reduction could meet the competition and that it therefore made no sense to seek a competitive advantage on price.

Phase-three plans can sometimes achieve this kind of dramatic impact because they are very different from the kind of static, deterministic, sterile plans that result from phase-two efforts. In particular, they share the following features:

Phase-three resource allocation is dynamic rather than static. The planner looks for opportunities to "shift the dot" of a business into a more attractive region of the portfolio matrix. This can be done by creating new capabilities that will help the company meet the most important prerequisite for success within a market, by redefining the market itself, or by changing the customers’ buying criteria to correspond to the company’s strengths.

Phase-three plans are adaptive rather than deterministic. They do not work from a standard strategy, such as "invest for growth." Instead, they continually aim to uncover new ways of defining and satisfying customer needs, new ways of competing more effectively, and new products or services.

Phase-three strategies are often surprise strategies. The competition often does not even recognize them as a threat until after they have taken effect.

Phase-three plans often recommend not one course of action but several, acknowledging the trade-offs among them. This multitude of possibilities is precisely what makes phase three very uncomfortable for top managers. As in-depth dynamic planning spreads through the organization, top managers realize that they cannot control every important decision. Of course, lower-level staff members often make key decisions under phase-one and phase-two regimes, but because phase three makes this process explicit, it is more unsettling for top managers and spurs them to invest even more in the strategic-planning process.

Phase Four: Strategic management

When this investment is successful, the result is strategic management: the melding of strategic planning and everyday management into a single, seamless process. In phase four, it is not that planning techniques have become more sophisticated than they were in phase three but that they have become inseparable from the process of management itself. No longer is planning a yearly, or even quarterly, activity. Instead, it is woven into the fabric of operational decision making.

No more than a few of the world’s companies—mainly diversified multinationals that manufacture electrical and electronic products—have reached this fourth phase. Perhaps the need to plan for hundreds of fast-evolving businesses serving thousands of product markets in dozens of nations has accelerated evolution at these companies. Observing them can teach executives much about strategic management.

The key factor that distinguishes strategically managed companies from their counterparts in phase three is not the sophistication of their planning techniques but rather the care and thoroughness with which they link strategic planning to operational decision making. This often boils down to the following five attributes:

A well-understood conceptual framework that sorts out the many interrelated types of strategic issues. This framework is defined by tomorrow’s strategic issues rather than by today’s organizational structure. Strategic issues are hung on the framework like ornaments on a Christmas tree. Top management supervises the process and decides which issues it must address and which should be assigned to operating managers.

Strategic thinking capabilities that are widespread throughout the company, not limited to the top echelons.

A process for negotiating trade-offs among competing objectives that involves a series of feedback loops rather than a sequence of planning submissions. A well-conceived strategy plans for the resources required and, where resources are constrained, seeks alternatives.

A performance review system that focuses the attention of top managers on key problem and opportunity areas, without forcing those managers to struggle through an in-depth review of each business unit’s strategy every year.

A motivational system and management values that reward and promote the exercise of strategic thinking.

Although it is not possible to make everyone at a company into a brilliant strategic thinker, it is possible to achieve widespread recognition of what strategic thinking is. This understanding is based on some relatively simple rules.

Strategic thinking seeks hard, fact-based, logical information. Strategists are acutely uncomfortable with vague concepts like "synergy." They do not accept generalized theories of economic behavior but look for underlying market mechanisms and action plans that will accomplish the end they seek.

Strategic thinking questions everyone’s unquestioned assumptions. Most business executives, for example, regard government regulation as a bothersome interference in their affairs. But a few companies appear to have revised that assumption and may be trying to participate actively in the formation of regulatory policies to gain a competitive edge.

Strategic thinking is characterized by an all-pervasive unwillingness to expend resources. A strategist is always looking for opportunities to win at low or, better yet, no cost.

Strategic thinking is usually indirect and unexpected rather than head-on and predictable. Basil Henry Liddell Hart, probably the foremost thinker on military strategy in the 20th century, has written, "To move along the line of natural expectation consolidates the opponent’s balance and thus his resisting power." "In strategy," says Liddell Hart, "the longest way around is often the shortest way home." 1 1. See B. H. Liddell Hart, Strategy , second edition, Columbus, Ohio: Meridian Books, 1991.

It appears likely that strategic management will improve a company’s long-term business success. Top executives in strategically managed companies point with pride to many effective business strategies supported by coherent functional plans. In every case, they can identify individual successes that have repaid many times over the company’s increased investment in planning.

About the Authors

Frederick Gluck  was the managing director of McKinsey from 1988 to 1994;  Stephen Kaufman  and Steven Walleck  are alumni of McKinsey’s Cleveland office. This article is adapted from a McKinsey staff paper dated October 1978.

MACS: The market-activated corporate strategy framework

Ken McLeod and John Stuckey

McKinsey’s nine-box strategy matrix, prevalent in the 1970s, plotted the attractiveness of a given industry along one axis and the competitive position of a particular business unit in that industry along the other. Thus, the matrix could reduce the value-creation potential of a company’s many business units to a single, digestible chart.

However, the nine-box matrix applied only to product markets: those in which companies sell goods and services to customers. Because a comprehensive strategy must also help a parent company win in the market for corporate control—where business units themselves are bought, sold, spun off, and taken private—we have developed an analytical tool called the market-activated corporate strategy (MACS) framework.

MACS represents much of McKinsey’s most recent thinking in strategy and finance. Like the old nine-box matrix, MACS includes a measure of each business unit’s stand-alone value within the corporation, but it adds a measure of a business unit’s fitness for sale to other companies. This new measure is what makes MACS especially useful.

The key insight of MACS is that a corporation’s ability to extract value from a business unit relative to other potential owners should determine whether the corporation ought to hold onto the unit in question. In particular, this issue should not be decided by the value of the business unit viewed in isolation. Thus, decisions about whether to sell off a business unit may have less to do with how unattractive it really is (the main concern of the nine-box matrix) and more to do with whether a company is, for whatever reason, particularly well suited to run it.

In the MACS matrix, the axes from the old nine-box framework measuring the industry’s attractiveness and the business unit’s ability to compete have been collapsed into a single horizontal axis, representing a business unit’s potential for creating value as a stand-alone enterprise (Exhibit 3). The vertical axis in MACS represents a parent company’s ability, relative to other potential owners, to extract value from a business unit. And it is this second measure that makes MACS unique.

Managers can use MACS just as they used the nine-box tool, by representing each business unit as a bubble whose radius is proportional to the sales, the funds employed, or the value added by that unit. The resulting chart can be used to plan acquisitions or divestitures and to identify the sorts of institutional skill-building efforts that the parent corporation should be engaged in.

The horizontal dimension: The potential to create value

The horizontal dimension of a MACS matrix shows a business unit’s potential value as an optimally managed stand-alone enterprise. Sometimes, this measure can be qualitative. When precision is needed, though, you can calculate the maximum potential net present value (NPV) of the business unit and then scale that NPV by some factor—such as sales, value added, or funds employed—to make it comparable to the values of the other business units. If the business unit might be better run under different managers, its value is appraised as if they already do manage it, since the goal is to estimate optimal, not actual, value.

That optimal value depends on three basic factors:

Industry attractiveness is a function of the structure of an industry and the conduct of its players, both of which can be assessed using the structure-conduct-performance (SCP) model. Start by considering the external forces impinging on an industry, such as new technologies, government policies, and lifestyle changes. Then consider the industry’s structure, including the economics of supply, demand, and the industry chain. Finally, look at the conduct and the financial performance of the industry’s players. The feedback loops shown in Exhibit 4 interact over time to determine the attractiveness of the industry at any given moment. 

The position of your business unit within its industry depends on its ability to sustain higher prices or lower costs than the competition does. Assess this ability by considering the business unit as a value delivery system, where "value" means benefits to buyers minus price. 2 2. See Michael J. Lanning and Edward G. Michaels, 'A business is a value delivery system,' on page 53 of this anthology.

Chances to improve the attractiveness of the industry or the business unit’s competitive position within it come in two forms: opportunities to do a better job of managing internally and possible ways of shaping the structure of the industry or the conduct of its participants.

The vertical dimension: The ability to extract value

The vertical axis of the MACS matrix measures a corporation’s relative ability to extract value from each business unit in its portfolio. The parent can be classified as "in the pack," if it is no better suited than other companies to extract value from a particular business unit, or as a "natural owner," if it is uniquely suited for the job. The strength of this vertical dimension is that it makes explicit the true requirement for corporate performance: extracting more value from assets than anyone else can.

Many qualities can make a corporation the natural owner of a certain business unit. The parent corporation may be able to envision the future shape of the industry—and therefore to buy, sell, and manipulate assets in a way that anticipates a new equilibrium. It may excel at internal control: cutting costs, squeezing suppliers, and so on. It may have other businesses that can share resources with the new unit or transfer intermediate products or services to and from it. (In our experience, corporations tend to overvalue synergies that fall into this latter category. Believing that the internal transfer of goods and services is always a good thing, these companies never consider the advantages of arm’s-length market transactions.) Finally, there may be financial or technical factors that determine, to one extent or other, the natural owner of a business unit. These can include taxation, owners’ incentives, imperfect information, and differing valuation techniques.

Using the framework

Once a company’s business units have been located on the MACS matrix, the chart can be used to plan preliminary strategies for each of them. The main principle guiding this process should be the primary one behind MACS itself: the decision about whether a unit ought to be part of a company’s portfolio hangs more on that company’s relative ability to extract value from the unit than on its intrinsic value viewed in isolation.

The matrix itself can suggest some powerful strategic prescriptions—for example:

Divest structurally attractive businesses if they are worth more to someone else.

Retain structurally mediocre (or even poor) businesses if you can coax more value out of them than other owners could.

Give top priority to business units that lie toward the far left of the matrix—either by developing them internally if you are their natural owner or by selling them as soon as possible if someone else is.

Consider improving a business unit and selling it to its natural owner if you are well equipped to increase the value of the business unit through internal improvements but not in the best position to run it once it is in top shape.

Of course, the MACS matrix is just a snapshot. Sometimes, a parent company can change the way it extracts value, and in so doing it can become the natural owner of a business even if it wasn’t previously. But such a change will come at a cost to the parent and to other units in its portfolio. The manager’s objective is to find the combination of corporate capabilities and business units that provides the best overall scope for creating value.

MACS, a descendent of the old nine-box matrix, packages much of McKinsey’s thinking on strategy and finance. We have found that it serves well as a means of assessing strategy along the critical dimensions of value creation potential and relative ability to extract value.

Ken McLeod  is an alumnus of McKinsey’s Melbourne office, and  John Stuckey  is a director in the Sydney office. This article is adapted from a McKinsey staff paper dated July 1989. Copyright © 1989, 2000 McKinsey & Company. All rights reserved.

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The 7 critical skills of successful strategic thinkers.

• In a study conducted by Harvard Bussiness Review, 97% of the 10,000 senior executives asked chose strategy as the most critical leadership behavior to their organizations’ future success.
• Strategic thinkers are able to create and stick to a very clear visioning process.
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Inscription Plan in notepad, close-up, top view, the concept of planning, goal setting photo credit: ... [+] Getty

Life as business are both long-term races. They require to fully commit to the present while seeing through years ahead in order to define and achieve the best of the future. They require to embrace today while deciding on objectives, understanding the options, creating possible alternative scenarios and situations and determining the direction to be followed. They require strategic thinking.

Defined as the process that determines the manner in which people think about, assess, view, and create the future for themselves and others, strategic thinking is basically the ability to know what you want to achieve and how to achieve it. Developing a strategic approach is not always easy as it is as much a mindset as a set of techniques. However, it does result in the main difference between an average and an exceptional achiever.

Success and achievement can not just be left to hazard.  In a study conducted by Harvard Bussiness Review, 97% of the 10,000 senior executives asked chose strategy as the most critical leadership behavior to their organizations’ future success. Strategic thinkers are able to imagine the big picture, identify the possible impact of their decisions and project the way to get there. These are the seven traces that define them all.

Strategic thinkers are able to create and stick to a very clear visioning process. Using both the left (logical) and right (creative) sides of their brain, they defined an ambitious but rigorous vision of what needs to be achieved. A clear, positive and big enough vision is what inspires for action and pulls in ideas, people and other resources. A vision is what enables commitment and moves the needed energy to make it happen. In this way, strategic thinkers are visionary leaders. They see the potential for how the world should exist and take steps to get there.

"The purpose of life is a life of purpose"  (Robert Byrne)

Vision should be carefully embedded within a framework. Successful strategic thinkers have the ability to define their objectives and develop an action plan with goals broken down into tasks specifically measured in terms of timeline and resources. They set up deadlines and they commit to them. Self-aware enough, they are conscious of their own biases and factor their own circumstances, perspectives, and points of view within this framework. This helps them to ensure that their own backgrounds are not an impediment but a boost to their goals. Their framework envisions always a plan A, B, and C that drives them all to the same expected result. They factor all possible ways within a reasonable timeline for action.

• Perceptiveness

Strategic thinkers are able to look around and understand the world from all the different perspectives. They listen, hear and read between the lines. They observe before forming a judgment and absorb and make use of the different angles that could be helpful for better guidance. They understand peoples' intentions, hopes, and desires and play with them in a symbiotic way that could help all to achieve greater. They recognize internal and external clues that may sharp and clear the direction to be taken. They are able to grasp the perfect match and put together all the pieces of the puzzle. They are able to feel the breeze because they know that big achievements are just the collection of all the different angles.

• Assertiveness

They are good at decision-making. After a comprehensive evaluation, they chose the way to go and walk firmly into it without vacillation. They may doubt but they do not let the doubts to fog the vision. They communicate effectively what they want and need by using clear orders while simultaneously respecting the thoughts and wishes of others. They are able to react appropriately under pressure and reduce anxiety by sticking to their decision and avoiding excessive questioning. Through high levels of confidence and self-esteem, they receive both compliments and critics in a constructive way. They defend their points of view without harming others and manage to convince without force or hostility. They are easily followed.

"Your attitude, not your aptitude, will determine your altitude"  (Zig Ziglar)

• Flexibility

Strategic thinkers are clearly aware of their weaknesses so they are committed to seeking the advice of others. They are humble enough to be flexible and twist their ideas and framework as to truly achieve the desired vision. They do not confuse flexibility with lack of structure. They accept the rules of the game because they are aware that without rules there is no fair game. Strategic thinkers are flexible thinkers what allows them to shift gears and think about something in more than one way and develop different strategies. Along with working memory and self-control, flexible thinking is one of the three main executive skills allowing to properly manage thoughts, actions, and emotions to get things done.

"Life is a sum of all our choices"  (Albert Camus)

• Emotional Balance

Strategic thinkers are able to balance their emotions in a way that always favors the achievement of the ultimate goals. They are aware of their emotions, they are able to name them when they arrive, they do not react to them as an important element of accepting them and just when they are over control of them, they take a decision. Whether they received positive or negative feedback, they are able to deal with it, understand and respond in a way that protects and progresses toward their desired outcome. They are able to control and master the three drivers of any emotional state. They stand tall and breathe fully as part of their physiological reaction. They think positive and look for the opportunity as part of their psychological reaction. They are kind, compassionate and optimistic whenever facing their language response.  Strategic thinkers are tremendously creative but they are able to balance this creativity with pragmatism through a sense of realism and honesty about actuality. They are realistic optimists.

       7. Patience

Strategic thinkers do not ignore that achievement is a long-term ride. Milestones have all a concrete time and moment. And success is the result of a process of strategically planned work and efforts. Strategic thinkers have the ability to be patient. They do not rush conclusions. They do not bet it all at once. They invest their energies in a way that is sustainable and led by a long-term vision. They have learned to wait.

"The two most powerful warriors are patience and time"  (Leo Tolstoy)

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3 critical thinking strategies to enhance your problem-solving skills

Think back to the last time you made a big decision.

Maybe you were choosing between two jobs or whether to move across the country.

How did you make your choice? Most likely, you analyzed the pros and cons of each option and chose the one that made the most sense for you.

This decision-making process relied on an important skill we all need: critical thinking.

Critical thinking is usually associated with analyzing complex problems in a corporate boardroom or sitting through a tedious philosophy lecture. While those are undoubtedly valid applications of critical thinking skills, the truth is that everyone thinks critically every day — often without even realizing it.

Critical thinking strategies allow us to objectively evaluate information and make informed decisions based on logic and reason. The critical thinking process is essential for success in many areas, from business to academia to parenting. No matter your profession or lifestyle, learning how to think critically can improve your life in countless ways.

In this article, you'll learn more about critical thinking skills and how to enhance them by following specific, actionable critical thinking strategies.

What is critical thinking?

There are many ways to interpret the concept of critical thinking. Science, academia, and business all have their own viewpoints. An official definition of critical thinking is difficult to label, and that's logical. After all, the critical thinking process isn't about memorizing generic definitions — it's about asking questions for yourself.

At its simplest, the Foundation for Critical Thinking (FCT) Model defines critical thinking as "...the art of analyzing and evaluating thinking with a view to improving it." The critical thinking process is about being objective — seeing different points of view and keeping an open mind when new information contradicts your beliefs and opinions. Critical thinkers prioritize facts over emotions, remove biases, verify information, and use logical reasoning to solve problems.

When is a critical thinking strategy essential?

Sound reasoning is essential to making good decisions. Since we all make thousands of decisions every day, it can be beneficial to strengthen our reasoning and problem-solving skills.

However, critical thinking skills can be more than just helpful in some situations — they're vital. These instances include:

• Interpreting the news . Social networking has changed the way we receive information. About half of U.S. adults get their news from social media , and more than a third regularly turn to Facebook as their source. Since anyone can share anything on social networks, fake news spreads quickly , so it's essential to think critically to discern fake news from accurate reporting.
• In the workplace . According to the World Economic Forum, critical thinking skills are one of the top two skills needed for the future of work as the Fourth Industrial Revolution develops). Indeed, 93% of executives say "a candidate's demonstrated capacity to think critically, communicate clearly, and solve complex problems is more important than their undergraduate major."
• Formal education and self-learning . Critical thinking skills help learners engage in the learning process. Thinking critically encourages curiosity, leading us to ask tough questions when faced with challenging situations or material and delve deeper into the new subject matter. As a result, we better understand the information and discover practical ways to integrate it.
• Parenting . Parenting involves various critical thinking skills, from managing discipline to making care decisions. A constant stream of opinions and trends on social media makes decision-making even more challenging for a modern parent. Asking open-ended questions, researching claims, becoming aware of critical thinking barriers , and being skeptical of trends are necessary to make informed decisions about children's care.

These are just a few examples of situations where critical thinking can be helpful. There are many other areas of life in which critical thinking strategies are beneficial. To use them properly, you'll need to develop a few key critical thinking skills.

Critical thinking skills

Applying critical thinking strategies requires the use of a few essential skills. Experts identify the core critical thinking skills as:

• Interpretation is the ability to understand and make sense of information. When we interpret something, we use subskills like categorization and significance to help us clarify the meaning.
• Analysis refers to breaking down complex ideas and concepts into smaller chunks that can be better understood. This skill requires effectively examining ideas to identify the critical components or problems.
• Evaluation is the ability to determine whether or not a particular claim or piece of evidence is valid and credible. Subskills like logic and reasoning help us judge the quality or value of something.
• Inference is the process of drawing logical conclusions from the presented information. This skill helps critical thinkers understand new ideas by looking for patterns and connections between different pieces of information.
• Explanation refers to effectively communicating in a way that others can easily understand. This entails simplifying complex information to present the findings of your reasoning in a clear way with well-reasoned arguments that look at the big picture.
• Self-regulation is the ability to monitor your own thinking and behavior to improve performance over time. This skill allows critical thinkers to reflect on their progress and make adjustments to achieve better results.

Developing these skills will lead to better critical thinking. Skill development can occur in a wide variety of situations by practicing specific strategies.

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3 critical thinking strategies to try

Developing and refining critical thinking skills takes time and practice. If you want to sharpen your problem-solving skills, here are a few critical thinking strategies you can use as a starting point.

Strategy 1: Comprehensive Analysis

A critical approach to any argument should begin with a detailed and systematic examination. When you break down the claim into elements, you can evaluate each segment separately to determine its legitimacy.

Start by analyzing the language of the argument. Analyze the following factors:

• Make sure that words are used in the correct context by checking their meaning
• The definition of words within the context of the argument should be accurate
• Make sure the language being used has clarity and makes sense
• Verify the accuracy of the language in the statement to ensure it is fair and factual

Evaluating an argument's words and phrases is an essential first step to determining validity.

The next step is to examine the claim's structure. There is a basic structure to all arguments — one or more premises lead to a conclusion. The premise is the statement(s) that provides evidence supporting the conclusion. The conclusion is the claim that is made in the argument, usually highlighted by words like "so" or "therefore." Understanding this basic structure is essential to identify each piece for assessment.

Standardization

Consider standardizing the argument if necessary. A few situations may require restructuring into a standard structure. When a statement isn't logically arranged, extracting premises and conclusions and rearranging them make them easier to comprehend.

When more than one premise exists for a single conclusion, making two separate assertions with the conclusion makes it easier to assess each assumption separately.

Sometimes, an argument is missing its conclusion because the author implied it. It's often easier to understand an implied conclusion when the structure is broken down into a standardized format. In the same way, a missing premise can occur when part of the element is common knowledge or assumed.

Classification

As a final step, classify the argument. All arguments are either deductive or non-deductive. The strategies you will use to evaluate your argument will vary depending on whether your argument is deductive. Deductive arguments contain premises that guarantee their conclusions. The premises of non-deductive arguments cannot guarantee the truth of their findings.

Strategy 2: Utilize Bloom's Taxonomy

Another strategy that can develop the critical thinking process is Bloom's Taxonomy . Educators worldwide have used the framework created by Benjamin Bloom to define and distinguish different levels of human cognition, like reasoning, learning, and comprehension.

In the original model, there were six main categories:

• Comprehension
• Application

In 2001, researchers, educators, and psychologists revised the taxonomy to reflect a more dynamic approach to education, changing the labels to represent the actions taken at each step of the system:

The six levels are arranged in hierarchical form, moving from the simplest level of cognition — thinking — to the highest, most complex level — evaluation.

Bloom's Taxonomy can serve as a useful critical thinking strategy in two ways. Teachers can use the taxonomy to promote critical thinking in their teaching strategies. By assessing the cognition level of their students, teachers can plan and deliver instruction at the appropriate level, ensuring that tasks and assessments align with the objective. Most importantly, they can tailor the types of questions they ask in classroom discussion by using strategic words that challenge students on different levels of cognition.

For classroom students and self-learners, the taxonomy provides a structured framework for decision-making. Students are guided through the process of critical analysis, starting with acquiring knowledge. As learners progress through the steps, they are encouraged to gather more information and examine it analytically before evaluating it to reach a decision.

Strategy 3: Apply the Falsification Theory

The Falsification Theory is an approach that aims to separate science from non-science proposed by 20th-century philosopher Karl Popper. In short, it implies that a scientific theory or hypothesis is falsifiable if it can be logically refuted by an empirical test. For example, observing a white duck can falsify the hypothesis that "all ducks are yellow."

It can be helpful to use falsification as a critical thinking strategy when evaluating new information or scientific claims. This encourages us to test our assumptions and seek disconfirming evidence. When we actively seek out information that contradicts our beliefs, we can more accurately assess the validity of our ideas by avoiding narrow thinking and removing bias.

The theory isn't without criticism, however. Skeptics argue that it's too simplistic. Some cite scientific theories (like Einstein's theory of relativity) that haven't been proven false yet are still considered scientific. Other people argue that some theories (such as Darwin's theory of evolution) have been tested and found true yet are still being tested and critiqued.

Whether or not the Falsification Theory is a perfect way of distinguishing science from non-science may be debated. Still, it remains a valuable tool for thinking critically about the information we encounter in everyday life.

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Enhance your higher-order thinking skills

Developing higher-order thinking skills and refining the critical thinking process are essential for those who seek personal and professional development. Enhancing your decision-making abilities requires developing essential critical thinking skills and learning how you can apply them.

The three critical thinking strategies shared here are just a sample of the many strategic ways you can use the critical thinking process. Higher-order thinking takes practice, so don't get discouraged if it feels difficult at first. With time and patience, you can become a master critical thinker.

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Critical Thinking Cornell Certificate Program

Overview and courses.

Have you ever known a very intelligent person who made a very bad decision?

Critical problem solving is both a discipline and a skill; one that even very smart people can benefit from learning. Careful thought around decisions can help your teams and organizations thrive. And in today’s age of automation, it’s never been a more essential mindset to develop at every level of a company.

In this certificate program, you will practice a disciplined, systematic approach to problem solving. You will learn how to deeply analyze a problem, assess possible solutions and associated risks, and hone your strategic decision-making skills by following a methodology based on tested actions and sound approaches. Whether you’re interested in preparing for a management role or already lead an execution function, you’ll come away better equipped to confidently tackle any decision large or small, make a compelling business case, and apply influence in your organization in a way that creates the optimal conditions for success.

The courses in this certificate program are required to be completed in the order that they appear.

This program includes a year of free access to Symposium! These events feature several days of live, highly participatory virtual Zoom sessions with Cornell faculty and experts to explore the most pressing leadership topics. Symposium events are held several times throughout the year. Once enrolled in your program, you will receive information about upcoming events.

Throughout the year, you may participate in as many sessions as you wish. Attending Symposium sessions is not required to successfully complete the certificate program.

Course list

Problem-solving using evidence and critical thinking.

Have you ever known a very intelligent person who made a very bad decision? If so, you know that having a high IQ does not guarantee that you automatically make critically thoughtful decisions. Critically thoughtful problem-solving is a discipline and a skill—one that allows you to make decisions that are the product of careful thought, and the results of those decisions help your team and organization thrive.

In this course you will practice a disciplined, systematic approach to problem solving that helps ensure that your analysis of a problem is comprehensive, is based on quality, credible evidence, and takes full and fair account of the most probable counterarguments and risks. The result of this technique is a thoroughly defensible assessment of what the problem is, what is causing it, and the most effective plan of action to address it. Finally, you will identify and frame a problem by assessing its context and develop a well-reasoned and implementable solution that addresses the underlying causes.

Making a Convincing Case for Your Solution

When trying to persuade someone, the tendency is to begin in advocacy mode—for example: “Here's something I want you to agree to.” Most people do not react positively to the feeling of being sold something. The usual reaction is to literally or figuratively start backing up. To make a convincing case, it is more effective to engage with the decision maker as a partner in problem-solving. This makes your counterpart feel less like someone is trying to get them to buy something and more like you are working together to bring about an outcome that is desirable to both parties. Begin by asking yourself: “What is the problem you and the decision maker are solving together?”

By the end of this course, you will have learned how to deeply analyze a problem, possible solutions, and the associated risks as well as the most persuasive and efficient ways of presenting your proposal.

You are required to have completed the following course or have equivalent experience before taking this course:

• Solve Problems Using Evidence and Critical Thinking

Strategic Decision Making

The ability to make effective and timely decisions is an essential skill for successful executives. Mastery of this skill influences all aspects of day-to-day operations as well as strategic planning. In this course, developed by Professor Robert Bloomfield, Ph.D. of Cornell University's Johnson Graduate School of Management, you will hone your decision-making skills by following a methodology based on tested actions and sound organizational approaches. You will leave this course better equipped to confidently tackle any decision large or small, and you'll do so in a way that creates the optimal conditions for success.

Navigating Power Relationships

Leaders at every level need to be able to execute on their ideas. In virtually every case, this means that leaders need to be able to persuade others to join in this execution. In order to do so, understanding how to create and utilize power in an organization is critical.

In this course, developed by Professor Glen Dowell, Ph.D., of Cornell University's Johnson Graduate School of Management, students will focus on their personal relationship with power as well as how power works in their organization and social network.

Project Management Institute (PMI ® ) Continuing Certification : Participants who successfully complete this course will receive 6 Professional Development Units (PDUs) from PMI ® . Please contact PMI ® for details about professional project management certification or recertification.

Interpreting the Behavior of Others

Applying strategic influence.

Being able to influence others is the most fundamental characteristic of an effective leader, but many people in positions of power don't know specifically how they are influencing others' behavior in positive directions. They let it happen by chance or use their formal authority—getting people to do things because “the boss said so.” But as leaders gets promoted within their organization, using formal authority becomes less effective as they not only need to influence subordinates, but also peers, external stakeholders, and superiors.  In this course, Professor Filipowicz explores the three complementary levels of influence. First, you will explore heuristics, or rules of thumb, that people use in order to make decisions. Next, you will learn how to influence through reciprocity by uncovering what the person you want to influence wants and needs. Lastly, you will learn how to alter the social and physical environment in order to get the change in behavior you want. By the end of this course, you'll have the skills to consistently draw out the desired behaviors from your team and from those around you. 

Leadership Symposium   LIVE

Symposium sessions feature three days of live, highly interactive virtual Zoom sessions that will explore today’s most pressing topics. The Leadership Symposium offers you a unique opportunity to engage in real-time conversations with peers and experts from the Cornell community and beyond. Using the context of your own experiences, you will take part in reflections and small-group discussions to build on the skills and knowledge you have gained from your courses.

Join us for the next Symposium in which we’ll discuss the ways that leaders across industries have continued engaging their teams over the past two years while pivoting in strategic ways. You will support your coursework by applying your knowledge and experiences to relevant topics for leaders. Throughout this Symposium, you will examine different areas of leadership, including innovation, strategy, and engagement. By participating in relevant and engaging discussions, you will discover a variety of perspectives and build connections with your fellow participants from various industries.

Upcoming Symposium: October 15-17, 2024 from 11am – 1pm ET

All sessions are held on Zoom.

Future dates are subject to change. You may participate in as many sessions as you wish. Attending Symposium sessions is not required to successfully complete any certificate program. Once enrolled in your courses, you will receive information about upcoming events. Accessibility accommodations will be available upon request.

How It Works

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Faculty Authors

• Certificates Authored

Risa Mish is professor of practice of management at the Johnson Graduate School of Management. She designed and teaches the MBA Core course in Critical and Strategic Thinking, in addition to teaching courses in leadership and serving as faculty co-director of the Johnson Leadership Fellows program.

She has been the recipient of the MBA Core Faculty Teaching Award, selected by the residential program MBA class to honor the teacher who “best fosters learning through lecture, discussion and course work in the required core curriculum”; the Apple Award for Teaching Excellence, selected by the MBA graduating classes to honor a faculty member who “exemplifies outstanding leadership and enduring educational influence”; the “Best Teacher Award”, selected by the graduating class of the Cornell-Tsinghua dual degree MBA/FMBA program offered by Johnson at Cornell and the PBC School of Finance at Tsinghua University; the Stephen Russell Distinguished Teaching Award, selected by the five-year MBA reunion class to honor a faculty member whose “teaching and example have continued to influence graduates five years into their post-MBA careers”; and the Globe Award for Teaching Excellence, selected by the Executive MBA graduating class to honor a faculty member who “demonstrates a command of subject matter and also possesses the creativity, dedication, and enthusiasm essential to meet the unique challenges of an EMBA education.”

Mish serves as a keynote speaker and workshop leader at global, national, and regional conferences for corporations and trade associations in the consumer products, financial services, health care, high tech, media, and manufacturing industries, on a variety of topics, including critical thinking and problem solving, persuasion and influence, and motivating optimal employee performance. Before returning to Cornell, Mish was a partner in the New York City law firm of Collazo Carling & Mish LLP (now Collazo Florentino & Keil LLP), where she represented management clients on a wide range of labor and employment law matters, including defense of employment discrimination claims in federal and state courts and administrative agencies, and in labor arbitrations and negotiations under collective bargaining agreements. Prior to CC&M, Mish was a labor and employment law associate with Simpson Thacher & Bartlett in New York City, where she represented Fortune 500 clients in the financial services, consumer products, and manufacturing industries. She is admitted to practice before the U.S. Supreme Court and state and federal courts in New York and Massachusetts.

Mish is a member of the board of directors of SmithBucklin Corporation, the world’s largest trade association management company, headquartered in Chicago and TheraCare Corporation, headquartered in New York City. She formerly served as a Trustee of the Tompkins County Public Library, Vice Chair of the board of directors of the Community Foundation of Tompkins County, and member of the board of directors of the United Way of Tompkins County.

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Critical Thinking

• Performance Leadership
• Executive Leadership
• Change Management

Glen Dowell is an Associate Professor of Management and Organizations at the Johnson Graduate School of Management, Cornell University. He researches in the area of corporate sustainability, with a focus on firm environmental performance. Recent projects have investigated the effect of local demographic factors on changes in pollution levels, the role of corporate merger and acquisition in facilitating changes in facility environmental performance, and the relative influence of financial return and disruption on the commercial adoption of energy savings initiatives.

Professor Dowell’s research has been published in Management Science, Organization Studies, Advances in Strategic Management, Strategic Management Journal, Organization Science, Journal of Management, Industrial and Corporate Change, Journal of Business Ethics, and Administrative Science Quarterly. He is senior editor at Organization Science and co-editor of Strategic Organization, is on the editorial boards of Strategic Management Journal and Administrative Science Quarterly, and represents Cornell on the board of the Alliance for Research in Corporate Sustainability (ARCS). He is also the Division Chair for the Organizations and Natural Environment Division of the Academy of Management.

Professor Dowell teaches Sustainable Global Enterprise and Critical and Strategic Thinking. He is a faculty affiliate for the Center for Sustainable Global Enterprise and a faculty fellow at the Atkinson Center for a Sustainable Future.

• Sustainable Business
• Hotel Management and Owner Relations
• Executive Healthcare Leadership

Since coming to the Johnson Graduate School of Management in 1991, Robert J. Bloomfield has used laboratory experiments to study financial markets and investor behavior. He has also published in all major business disciplines, including finance, accounting, marketing, organizational behavior, and operations research. Professor Bloomfield served as director of the Financial Accounting Standards Research Initiative (FASRI), an activity of the Financial Accounting Standards Board, and is an editor of a special issue of Journal of Accounting Research dedicated to Registered Reports of empirical research. Professor Bloomfield has recently taken on editorship of Journal of Financial Reporting, which is pioneering an innovative editorial process intended to broaden the range of research methods used in accounting, improve the quality of research execution, and encourage the honest reporting of findings.

• Management Accounting for Leaders
• Strategic Healthcare Leadership
• Management Accounting

Allan Filipowicz is clinical professor of management and organizations at the Samuel Curtis Johnson Graduate School of Management at Cornell University. Professor Filipowicz’s research focuses on how emotions drive or impede leadership effectiveness, at both the intrapersonal and interpersonal levels. Within this domain, he studies the relationship between emotions and risky decision making; the influence of humor on both leadership and negotiation effectiveness; the impact of emotional transitions in negotiations; and the relationship between genes, chronotype (morningness–eveningness) and performance. His work has been published in the Journal of Personality and Social Psychology, Journal of Behavioral Decision Making, Journal of Operations Management, International Journal of Forecasting, Creativity Research Journal, Journal of Circadian Rhythms, and Scientific Reports.

Professor Filipowicz teaches Managing and Leading Organizations (recently winning a Best Core Faculty Award), Negotiations, Executive Leadership and Development, Leading Teams, and Critical and Strategic Thinking. He has taught executives across the globe, from Singapore to Europe to the US, with recent clients including Medtronic, Bayer, Google, Pernod Ricard, and Harley-Davidson. Professor Filipowicz received his PhD from Harvard University. He holds an MBA from The Wharton School, an MA in International Affairs from the University of Pennsylvania, and degrees in electrical engineering (MEng, BS) and economics (BA) from Cornell University. His professional experience includes banking (Bankers Trust, New York) and consulting, including running his own boutique consulting firm and four years with The Boston Consulting Group in Paris.

• Adaptive Healthcare Strategy
• Negotiation Mastery
• Psychology of Leadership

Key Course Takeaways

• Respond decisively and consistently when faced with situations that require a decision
• Assess the context of the problem
• Summarize your analysis of the problem
• Analyze potential solutions from multiple perspectives
• Build a compelling business case for your solution
• Improve your ability to exercise influence in your organization and activate your network to achieve goals
• Establish responsibilities and accountabilities to ensure effective follow-through on decisions made

JOIN A LEADERSHIP SYMPOSIUM!

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What You'll Earn

• Critical Thinking Certificate from Cornell Johnson Graduate School of Management
• 60 Professional Development Hours (6 CEUs)
• 38 Professional Development Units (PDUs) toward PMI recertification
• 30 Professional Development Credits (PDCs) toward SHRM-CP and SHRM-SCP recertification
• 30 Credit hours towards HRCI recertification

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Who should enroll.

• C-level executives, VPs, managers
• Industry leaders with 2-10+ years experience
• Mid-level professionals looking to move into leadership roles
• Engineers and designers leading projects
• Consultants or analysts
• Anyone whose work involves devising, proposing, and defending evidence-based solutions

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Make Time for Strategic Thinking Every Day

If you believe that only senior executives need to think strategically, think again. No matter what level you’re at, strategic thinking is a critical skill — one that can always be improved. To hone your capacity to see the big picture, start by making sure you have a solid understanding of the industry context and […]

If you believe that only senior executives need to think strategically, think again. No matter what level you’re at, strategic thinking is a critical skill — one that can always be improved. To hone your capacity to see the big picture, start by making sure you have a solid understanding of the industry context and business drivers. Make it a routine to explore the internal trends in your day-to-day work. Pay attention to the issues that get raised repeatedly, and synthesize the common obstacles your colleagues face. Be proactive about connecting with peers in your organization and in your industry to understand their observations of the marketplace, and share this information across your network. Take the time to understand the unique information and perspective that your job function contributes to the company. Thinking at this higher level will position you to be more strategic in your role.

Source: Adapted from “4 Ways to Improve Your Strategic Thinking Skills,” by Nina Bowman

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Critical Thinking for Strategic Intelligence Third Edition

With   Critical Thinking for Strategic Intelligence , Katherine Hibbs Pherson and Randolph H. Pherson have updated their highly regarded, easy-to-use handbook for developing core critical thinking skills and analytic techniques. This indispensable text is framed around 20 key questions that all analysts must ask themselves as they prepare to conduct research, generate hypotheses, evaluate sources of information, draft papers, and ultimately present analysis, including: How do I get started? Where is the information I need? What is my argument? How do I convey my message effectively?  The Third Edition includes suggested best practices for dealing with digital disinformation, politicization, and AI. Drawing upon their years of teaching and analytic experience, Pherson and Pherson provide a useful introduction to skills that are essential within the intelligence community.

• ISBN-10 1544374267
• ISBN-13 978-1544374260
• Edition Third
• Publisher CQ Press
• Publication date September 3, 2020
• Language English
• Dimensions 6 x 1.06 x 9 inches
• Print length 468 pages
• See all details

Editorial Reviews

From the author, about the author, product details.

• Publisher ‏ : ‎ CQ Press; Third edition (September 3, 2020)
• Language ‏ : ‎ English
• Paperback ‏ : ‎ 468 pages
• ISBN-10 ‏ : ‎ 1544374267
• ISBN-13 ‏ : ‎ 978-1544374260
• Item Weight ‏ : ‎ 1.25 pounds
• Dimensions ‏ : ‎ 6 x 1.06 x 9 inches
• #429 in Political Intelligence
• #547 in Strategic Business Planning
• #724 in Systems & Planning

About the authors

Randolph h. pherson.

I have been developing and teaching Structured Analytic Techniques and critical thinking and writing skills for almost two decades to analysts throughout the intelligence, homeland security, and defense communities as well as in the private sector and overseas. Since retiring from the Central Intelligence Agency (CIA) in 2000, i have authored, co-authored, and edited eleven books on intelligence analysis. You can find them on shop.globalytica.com. I am best known for co-authoring Structured Analytic Techniques for Intelligence Analysis with Richards J. Heuer, Jr. and Critical Thinking for Strategic Intelligence with my wife, Katherine Hibbs Pherson. I also write a monthly blog, the Analytic Insider, www.globalytica.com, that provides insights on how to use analytic techniques to better understand how the world is evolving and learn what you can do to stay ahead of the brewing chaos.

As Chief Executive Officer of Globalytica, LLC, i have taught courses in over two dozen countries, supporting major financial institutions, global retailers, and security firms. I am also a Founding Director of the Forum Foundation for Analytic Excellence, a nonprofit that supports the propagation of critical thinking skills and structured analytic techniques. Our companies has taught critical thinking skills and structured analytic techniques to 10 of the Fortune Top 100. We also facilitate Strategic Foresight Analysis workshops for foreign governments, international foundations, and multinational corporations and holds the patent on a suite of collaborative analytic tools. As CEO and as President of Pherson Associates, I have assisted senior corporate and government officials in building robust analytic organizations. Our companies have developed and implemented programs on how to increase the quality and speed of delivery of analytic products for US Government agencies, Homeland Security Fusion Centers, a major global law firm, and a major oil company.I am also a Founding Director of the Forum Foundation for Analytic Excellence, a nonprofit that supports the propagation of critical thinking skills and structured analytic techniques.

Before becoming involved in teaching analytic techniques, I worked for almost three decades in the Intelligence Community, last serving as National Intelligence Officer (NIO) for Latin America. While at the Central Intelligence Agency, I managed the production of intelligence analysis on topics ranging from global instability to Latin America, served on the Inspector General's staff, and developed and implemented a strategic planning process for the agency. I am the proud recipient of the Distinguished Intelligence Medal for my service as NIO for Latin America and the Distinguished Career Intelligence Medal. My academic background is a political science major specializing in African Studies at Dartmouth College and an M.A. in International Relations from Yale University where I also took courses at the Yale Law School.

Katherine Hibbs Pherson

Katherine Hibbs Pherson, Chief Executive Officer of Pherson Associates, teaches advanced analytic techniques and critical thinking skills to analysts in the intelligence and homeland security communities, the private sector, and academia. She is also a consultant to the government on planning, security, and analysis projects, President of Pherson Associates' sister company Globalytica, and founding board member of the non-profit Forum Foundation for Analytic Excellence. She co-authored Critical Thinking for Strategic Intelligence with her husband and business partner, Randy.

Ms. Pherson completed in 2000 a 27-year career with the Central Intelligence Agency in intelligence and security analysis and resource management. Her leadership in the security arena led to the adoption of a risk management methodology, the strengthening and the implementation of overseas security countermeasures, and improvements in dealing with unsolicited contacts. As Director of the DCI's Center for Security Evaluation she managed the Intelligence Community's involvement in rebuilding the penetrated U.S. Embassy in Moscow. Ms. Pherson received her A.B. in Hispanic Studies from Vassar College, an M.A. in Spanish Linguistics and Latin American Studies from the University of Illinois, and an M.A. in Communications from the University of Oklahoma. She is a recipient of the CIA's Distinguished Career Intelligence Medal and the Intelligence Community's National Distinguished Service Medal.

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