There is something mystical about the word “strategy”.  People love to use strategy in a variety of different context – business strategy, technical strategy, product strategy, process strategy, people strategy, competitive strategy, winning strategy, sales strategy, marketing strategy, to name a few. 

You read about strategy.  You hear about strategy.  You talk about strategy.  You think strategy. 

Is strategic thinking an innate talent or an acquired skill? I tend to think of it as the former, but no matter how innate it is or it isn’t one can always strive to get better at that.  I am a simple kind of guy.  When I think about strategy, here are 3 things that I think about:

  • Thoughtfully define your destination
  • Realistically identify your current position
  • Anticipate tectonic shifts and plan for them   

Thoughtfully define your destination

The first step in strategic thinking is to accurately identify your objective, your mission – i.e. your destination.  A simple way to think about strategic thinking is ‘what is the most effective way to get from Point A to Point B?’  A chess player thinks strategically about the best way to capture the opponent’s King.  Capturing the opponent’s King is the chess player’s Point B.  When Microsoft started, Bill Gates and Paul Allen wanted to put a computer on every desk in every home. This was their Point B.  Henry Ford wanted to build a car for the common person.  That was his Point B.  Bill, Paul and Henry thought strategically on how they could best get to their respective Point Bs.  Bill and Paul decided to develop software to make computers fun and easy to use.  Ford’s strategy was to invest in a state-of-the art Assembly Line and reduce production costs.  

The mistake people make in identifying their Point B is to think about the success of their immediate products.  One needs to go deeper and understand the fundamental reason why their products exist.  Many railroad companies went out of business because they thought they were in the railroad business.  They strategized on how to build the best railroad organization.  If they viewed themselves as movers of people and goods to enable commerce, they would have evolved with changing times.  If a company that makes pens thinks they need the best way to make pens, then they are missing their Point B.  This company needs to think about helping people communicate, because communication is the fundamental reason why pens exist.   

Realistically identify your current position 

The next step is to realistically assess your Point A or your current position. In other words, if you don’t know where you are you may not know how to get to your destination.  For example, living in Seattle I need to be on I-5 South to reach San Diego.  Be it a business or an individual, being super aware of where you are, is absolutely critical to chart a course that will let you reach your destination.  Realistically assessing your current position requires objectivity and helps you calibrate how far you need to travel.

Anticipate tectonic shifts and plan for them 

Finally, a good strategic thinker has a wonderful ability to predict the future.  This ability is honed by analyzing historical data, studying trends, observing customer behaviors, studying competitive moves and overall, being watchful of ‘tectonic shifts’ that can rattle their foundations.  For example, in 1995, Microsoft reorganized and reprioritized efforts based on the Internet tectonic shift.  DEC failed to recognize the ‘Personal Computer’ tectonic shift and lost their leadership position in the industry.  Every major technological innovation is a classic example of one such tectonic shift and those who did a good job of anticipating that rode the wave phenomenally well.