Defining strategic thinking is made especially difficult by the absence of a consensus on what strategic management is. The explanation for strategic management is that it is an approach to management which fuses strategic planning (plan development through analysis of environment, competition, and strategy choices) and the firm’s system of operational decision making. This process has five dimensions. First, strategic management requires a widely understood strategic planning process tightly interwoven with a strategically centered organization structure. Second, it requires widely discussed, analyzed and negotiated goal choices from which are culled out the ones that are not adoptable. Third, strategic management relies on the shared ability to think strategically by managers throughout the company. Fourth, a performance evaluation system is necessary that focuses top level evaluators attention on critical positive and negative strategic factors. Finally, it requires a strategy supportive motivational system and value orientation among managers. These qualities, they say, define a strategically managed organization. Four of these qualities are readily understandable. But still subject to question is what is meant by the ability to think strategically.
Strategic thinking is that which generates (1) creative, environmentally relevant ideas and (2) concepts about how to turn them into systematically managed action plans. It has the following prerequisites:
- Input information is based on facts and logical data.
- Previously unquestioned assumptions are sought out and examined.
- A burning desire for resource conservation, and
- Indirect, spontaneous, and unexpected thought processes which are hard for competitors to predict.
These requirements of strategic thinking set it apart from other kinds of decision making. First, strategic thinking requires factual and logical input data because it is competitively dangerous to base strategy formulation on erroneous information. The stakes are too high to “hoof it.” Second, long-held assumptions should be identified and analyzed to make sure they still apply. This is especially true about goals which are in force, understandings about the environment and competitors, market acceptance and image, etc. Third, the manager attempting to think strategically should be committed to conservation of the organization’s resources rather than expecting that a good idea will precipitate a cornucopia of funds, people, and support. It is easy to be creative while assuming that most resource requirements can be taken care of. A greater degree of creativity is required when one must conserve resources.
Finally, strategic thinking must be done without setting patterns which competitors can identify and anticipate. The problems of predictable strategic thinking are analogous to the football coach sending in plays to his quarterback using hand signals that are understood by the opposing team’s coaches.