How to Become a Better Strategic Thinker

Having worked with more than a quarter million managers over the past 20 years to sharpen their strategic thinking capabilities, I’ve realized that many leaders with wonderful potential are unfairly branded with the “tactical, not strategic” label, causing their careers to stall out. For far too long, determining whether someone was tactical or strategic has been a subjective guess based on job titles, instinctual hunches, and cherry-picked observations.

CEOs and talent management leaders have told me they need a specific behavioral roadmap to help high-potential employees transition from tactical to strategic. To design this roadmap, I surveyed 2,586 managers from North America, Europe, Africa, and Asia to understand the real-world challenges they faced in developing, communicating, and executing their strategies. I identified three core behaviors that anyone who’s been given the “tactical, not strategic” feedback can work to develop.

Acumen

Acumen is about how you think: your ability to understand a situation, generate new ideas to move from the current to desired future state, and solve challenges to create new value. Acumen is comprised of three core components:

• Context awareness informs your vision of the big picture. Understanding both your internal situation (culture, purpose, processes, etc.) and external situation (market trends, customer behavior, competitive landscape, etc.) helps you allocate resources to reach your goals.

• Insight refers to your ability to generate learnings from your context awareness. This requires curiosity and an exploratory mindset. A key trait of strategic thinkers is their discipline to continuously record, categorize, share, and reflect on insights.

• Innovation is when you channel your context awareness and insights to create new value. It typically springs from the thinking involved in overcoming a challenge or solving a problem.

To evaluate your acumen, ask yourself the following:

• Do I regularly assess my business’s current situation, both from both the internal and external perspectives?

• Do I share valuable insights with my team?

• When problem-solving, do I stick to the tried-and-true, or do I look for new approaches?

Allocation

Allocation is about how you plan. Strategic thinkers set goals, distribute resources, recognize the risk and tradeoffs when making decisions, and create advantage by offering superior value. Where you invest your resources — time, talent, and capital — is a primary driver of your effectiveness and it requires the following components:

• Ability to focus resources: Resources are generally finite and without discipline, can be spread too thinly to have an impact on achieving your goals and objectives. A strategic approach entails the ability to focus resources, the courage to make trade-offs, and the willingness to ensure that your use of resources aligns with your strategic intent.

• Decision making: Instead of simply accepting the base-level option, strategic thinkers generate a range of viable alternatives. Since trade-offs are being made with each decision, they analyze the pros and cons of each alternative, as well as the level of acceptable risk.

• Competitive advantage: The central aim of strategy is to create a benefit, gain, or profit. A competitive advantage is formed when the configuration of one’s resources and activities result in the creation of superior value for customers relative to competitors. Once advantage is attained, strategic thinkers continue to diligently evolve it in order to stay ahead of the competition.

To determine whether you’re an effective allocator, ask yourself:

• Do I proactively move resources from underperforming areas towards ones with greater potential?

• Am I spending my time on activities that align with my goals?

• How am I measuring myself against my competition?

Action

Action is about what you do. Preparing a business strategy is only one step; how you implement your strategy determines your success. This requires the ability to collaborate with others, execute strategies to achieve goals, and optimize your personal performance.

• Collaboration is your ability to work with others to exchange knowledge, data, and insights that help further your progress toward a defined goal. Communication skills — verbal, visual, and written — are fundamental to successful collaboration, as is the ability to listen without judgment, because it allows you to approach the interaction with an open mind that is receptive to new and different paths forward.

• Execution involves the disciplined application of resources to achieve your goals. It requires focus and discipline to combat the continuous stream of interruptions, noise, and shiny objects that can lead you to veer off course. While execution is often thought of as tactical, there is an inherent strategic component, because insights that aren’t actualized will languish in unproductive obscurity, lessening the value you can provide.

• Personal performance is the stewardship of your own time, energy, and mindset in pursuit of your desired outcomes. Being strategic requires the flexibility to adapt to changing circumstances and the mental agility to overcome challenges and forge new paths in the attainment of goals.

To assess your action skills, ask yourself:

• When it comes time to implement a strategy, how prepared am I to take action?

• Do I ask others what their goals are at the beginning of the conversation?

• Do I easily get side-tracked by other obstacles along the way?

. . .

When we define strategic as possessing insight that leads to advantage, we can then begin to assess our own strategic fitness level. Acumen, allocation, and action — the ability to think, plan, and do — are what separate strategic thinkers from the rest, and they are behaviors that can be learned and applied to create superior value. While beauty may be in the eye of the beholder, strategic is in the behavior.

Copyright 2023 Harvard Business School Publishing Corporation. Distributed by The New York Times Syndicate.

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