As an executive, you need to think strategically and make sound decisions that align with your vision, goals, and values. But how do you identify and prioritize the most important issues that require your attention and action? In this article, you will learn some best practices for developing your strategic thinking skills and applying them to your daily challenges.
Before you can tackle any strategic issue, you need to have a clear understanding of your current situation. This means gathering relevant data, analyzing your strengths, weaknesses, opportunities, and threats (SWOT), and evaluating your stakeholders' expectations and needs. You can use various tools and frameworks, such as PESTLE, Porter's Five Forces, or Balanced Scorecard, to help you conduct a comprehensive situational analysis.
Once you have a clear picture of where you are, you need to decide where you want to go. This means defining your vision, mission, and values, as well as setting SMART (specific, measurable, achievable, relevant, and time-bound) goals and objectives. You also need to communicate your desired outcomes to your team and other stakeholders, and ensure that they are aligned and committed to achieving them.
A strategic issue is a gap between your current situation and your desired outcomes, or a challenge that threatens your ability to achieve them. To identify these issues, it's important to ask yourself critical questions such as what external and internal factors affect performance and results, what risks and uncertainties you face, what opportunities and trends you can leverage, what conflicts and trade-offs you need to resolve, and what assumptions and biases you need to challenge. Brainstorming, SWOT analysis, scenario planning, or root cause analysis can all help you generate and explore strategic issues.
Prioritizing your strategic issues is essential to ensure that you are addressing the most relevant and impactful ones. The Eisenhower Matrix is a useful tool for this purpose, categorizing them into four quadrants: Quadrant 1 and 2 are the most important, consisting of urgent and important issues that require immediate action or planning and preparation respectively. Quadrant 3 consists of urgent but not important issues that should be delegated or eliminated, while Quadrant 4 consists of neither urgent nor important issues that should be eliminated or postponed. Therefore, you should focus your attention on the issues in Quadrants 1 and 2.
For each strategic issue that you have prioritized, you need to develop and implement an action plan that specifies the steps, resources, responsibilities, timelines, and indicators of success. You also need to monitor and evaluate your progress and results, and make adjustments as needed. You can use various tools and frameworks, such as SMART goals, Gantt charts, RACI matrices, or OKRs (objectives and key results), to help you create and execute your action plans.
Strategic thinking is not a one-time event, but a continuous process that requires regular review and refinement. You need to keep track of the changes and developments in your environment, your performance and results, and your stakeholders' feedback and expectations. You also need to celebrate your achievements, learn from your failures, and identify new opportunities and challenges. You can use various methods, such as feedback surveys, SWOT analysis, or after-action reviews, to help you review and refine your strategy.
I prefer to use the term Reflect rather than Review. Reflect forces you to take a step back, take notice of the situation and then assess the actions. Review is more like a quick glance on your strategy to conclude whether we made it or not. I really would advocate for more awareness around the why did we or didn’t we achieve the action.
When applying the resource-based view of the firm theory (RBV) as a lens to understand how strategic priorities are redefined, the role of those responsible for revising the strategy is to assess the evolution of their resources and capabilities in comparison to their competitors. This evaluation should also consider how adjustments can be made to align with external threats or opportunities. This is particularly relevant when applying Grant's (1991) RBV approach to strategy analysis.