The first step to developing your strategic thinking?
Be curious and explore the need to understand why things are the way they are and if they could be different. Question the status quo!
For example, ask yourself, "Why don't our customers value X as much as we think they do?" or "How can we create value in a way that our competitors cannot quickly imitate?"
Don't settle for the first answer; go further. Dig deeper, observe, and explore multiple viewpoints.
The Essence of Strategic Thinking
Strategic thinking is not an isolated action but a holistic and dynamic cognitive process. It involves synthesis, intuition, and creativity, going far beyond mere analysis.
It is the ability to see the "big picture," to understand the connections between disparate elements, and to imagine possible futures that do not yet exist.
Key attributes of a strategic thinker include:
- A holistic and systemic vision: The ability to see the organization as an interconnected system within a larger ecosystem of customers, competitors, and market forces.
- Pattern recognition: The ability to detect significant patterns, trends, and anomalies in an ocean of complex information.
- Reframing and questioning: The discipline of challenging long-held assumptions and orthodoxies, asking "Why?" and "What if?" to redefine problems and discover innovative solutions. This involves questioning the very foundations of an industry and how value is created.
- A future orientation: A focus on long-term goals and the ability to work backward from a desired future state to inform current decisions.
Mastering and putting strategic thinking into practice calls for action. However, the essential starting point remains the ability to observe, question, and evaluate connections and important signals.
Start with Observation
Observation requires focusing attention on various perspectives that can influence the organization. Here are four perspectives to explore:
- Customers: Empathize with your customers.
- Competitors: Observe competitive dynamics.
- Trends: Listen to weak signals.
- Value Chain: Explore the interrelationships between key value-creating activities.
1. Customers: Empathize with your customers
Observe your customers' behaviors. Explore the reasons behind their choices.
Understanding the jobs-to-be-done, pain points, and desired benefits allows for better alignment of the value proposition, product-services offering, and the value delivery system.
This understanding includes the context in which the customers’ needs take shape.
Empathizing means adopting the customer's point of view throughout the life cycle of the need (not just the product). It also involves adopting the point of view of non-customers. Understanding why they make other choices, or simply do not act.
These observations enable the development of unique value propositions and innovation at the business model level.
Some suggested tools and methods:
- Empathy map
- Value Proposition Canvas
- Business Model Canvas
- Exploratory interviews
- Agentic AI research
2. Competitors: Observe competitive dynamics
Understanding competitors' strategic choices is important. Ensuring this understanding within the context of similar customer segments is even more so.
Remember, "If you are trying to serve the same customers, meet the same needs, and sell at the same relative price, then, by Porter's definition, you have no strategy."
It is all about observing these choices in detail: customer segments, preferred competitive criteria, and the key elements of the business model. It is also possible to go further and observe how customers react to the offers, without forgetting innovations and capital allocation.
Choices leave traces. Understanding them allows for a better assessment of their effects on customers and on the evolution of profit margins.
Some suggested tools and methods:
- Business model mapping
- Agentic AI research
- Strategic Canvas - Value mapping
- Financial statement analysis
3. Trends: Listen to weak signals
Rita McGrath tells us that snow melts at the edges. Paying attention to weak signals is crucial because once these signals become obvious, it is usually very difficult to react to them.
This requires paying attention to different sectors and questioning potential connections.
This perspective can also be broadened to include a look at the political, economic, social, technological, environmental, and legal dimensions of the organization.
Understanding the dynamics of change before others offers unique opportunities to create new offerings, penetrate new markets, and redefine the value proposition.
The ability to anticipate these strategic shifts allows the company to position itself proactively rather than reactively.
Some suggested tools and methods:
- Competitive intelligence
- Development of scenarios
- Hypotheses exploration through experimentation
- Diversifying information sources within the organization
4. The Value Chain: Explore the interrelationships between key value-creating activities
The value chain involves value-creating activities and the use of key resources.
Depending on organizations' strategic choices, the key elements of the value chain will be a source of differentiation and allow for the creation of a competitive advantage.
It is essential to pay specific attention to the relationships between these activities and continuously evaluate possibilities for increasing their efficiency. All this to maintain that crucial strategic coherence.
Maintaining this global organization’s perspective allows for the continuous evaluation of the different operational choices and their contribution to the strategy.
To win, it's not just about choosing Where-to-Play and How-to-Win; it's necessary to choose and maintain the coherence of "Must-Have Capabilities."
Some suggested tools and methods:
- Strategic Cascade
- Business model mapping
- Identification of Value-Creating activities
- Questioning Make or Buy decisions
- Evaluation of the value-creating activities against the clients’ competitive criteria
A Continuous Approach to Building Better Decisions
By paying attention to these different viewpoints, you will be able to focus and explore themes and key signals. Ask yourself:
- Why?
- How?
- What are the impacts?
Observation enables the differentiation of key signals from this ocean of information.
Taking a step back, observing, and questioning are necessary and must be done systematically.
It is the first step to exploring the options and scenarios needed to make better decisions.
Have a good week,
Eric L'Heureux
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