How to be good at strategic thinking: 9 thinking skills and 4 mindsets that are key

How good are you at strategic thinking? Certainly, it's a skill expected of most leaders today. But, despite lots written on the subject of strategy (like leadership!) over recent decades, there doesn't appear to be any consistent definition of exactly what it means to 'think strategically'.

This in itself, of course, doesn't exactly help to promote widespread proficiency in the skill at executive level. But I also believe the ability to think strategically - or 'be strategic' -should be seen as a valuable skill for almost anybody - beyond just senior managers.

Strategic thinking offers so many potential benefits. Not least: a fuller understanding about a current situation; improved ability to spot opportunities; a stronger basis for developing and selecting options and choices for the future; and more time to be proactive and plan/prepare for the future. Equally, such thinking helps to avoid decisions being based too much on a whim, false assumptions, inadequate information, personal bias or 'politicking'.

What exactly is strategic thinking, then?

In my view, strategic thinking is about looking at and thinking about a situation in a rounded, careful way in order to identify key issues, insights, and opportunities to help solve problems or make decisions about future courses of action. It involves pausing to seek information, seeing the 'big' factors at play rather than just the detail, and applying deliberate and conscious thought to guide and shape a choice or decision.

Strategic thinking informs and guides the different elements in the 'strategy process'. In an organisational context, these elements might be summarised as: 'situational review'; vision and future goals; 'strategy' (broad choices for the future and key initiatives); 'resources & delivery framework' (budget profile, risks/contingencies, responsibilities and targets); short-term tactical plan; execution; and monitoring/review.

These activities are traditionally seen as following a rational, linear process, which shouldn't be rushed (especially for corporate strategy or 'big' individual decisions like a product launch strategy). This contrasts with 'routine' or day-to-day decisions where people often tend to avoid deliberate thought and rely more on mental 'short-cuts' like past experience, intuition, common opinion, or how they feel.

In fact, though, the strategy process often tends to be more iterative than linear and strategic choices can be made quickly, if needed. Partly this is because some areas in the process naturally blend into each other and can be carried out almost concurrently. Some organisations also keep their strategy methods lean and fast-paced by practising 'agile strategy', which treats strategy as a quarterly 'think, try-out and review' exercise rather than the conventional 'strategy cum annual plan' approach.

It's also key to appreciate how strategic thinking is actually not just about being 'rational' and applying analysis and logic: to do well, an interplay of several types of thinking is involved (e.g. imagination), as explained below. And strategic thinking is not just another term for long-term planning: a concern for the future is a typical focus, yes, but strategic thinking can also help with decisions for today or the very-near future.

What's more, strategic thinking is not just for corporate (or business) strategy. The basic idea - of pausing to gather information and consider key issues and opportunities before making a decision - can also help almost anyone make better informed and considered choices: from middle-level or front-line managers carrying out tasks like deciding staffing needs for a new factory ....... to a parent reviewing options for next year's family holiday.

Overall, strategic thinking, is really a broad, composite activity. It involves a choice from several specific thinking skills (modes), the applying of various mindsets and personal qualities/behavours, and a choice from many possible cognitive support tools/methods. Below I briefly outline nine particular thinking skills and four mindsets, which I think are particularly valuable for doing strategic thinking well:

9 key skills needed in strategic thinking

i) Analytical & systems thinking: This is the ability to objectively examine and 'see' fully what is there in a situation. At one level, it means drilling down to seek all the facts and details, pushing through ambiguity, and actively looking for information where missing or not clear. This includes, crucially, at the start of a decision-making exercise, 'breaking down' the given problem or issue to be addressed. At another level, it means synthesising all the input you gain and looking for connections and patterns (including trends over time) and, particularly, seeing the overall 'big picture'. This latter skill area - so-called holistic or systems thinking - whilst natural to certain professions like engineers and designers (who think in terms of 'structures') - can be quite a challenge for some managers.

ii) Critical thinking: This cornerstone skill is about checking the truth, accuracy or relevance of information you come across, together with the objectivity or reasonableness of associated claims or arguments. It means not taking everything at face value when you suspect that objectivity is lacking. Applying the full depths of critical thinking - like hunting for 'logical fallacies' is usually excessive, I think, but it is important to identify things like major, flawed assumptions or erroneous beliefs or statements.

iii) Outside-in/contextual thinking: By this I mean the ability to note and think about what is happening on the fringes of a given situation as well as the perspectives of people/groups who are at the fringes or who are beyond (for example, in neighbouring, similar or other sectors) who are looking from the 'outside-in'. It involves 'looking beyond' and seeing the bigger context - often the source of early signs of potential change or ideas for learning/innovation. Such thinking comes easily to leaders in countries like China, I believe, but less so to executives in Western countries, who often more naturally look 'within' i.e. focusing on detail inside a given situation. Certainly, in my work as a facilitator, I always find my role in helping to bring in an 'external' perspective is seen as very useful.

iv) Foresight & visionary thinking: This skill area is about interpreting and making sense of known trends, judging/anticipating how the furure may look as a result, and defining ways an organisation should respond or adapt. These skills underpin leaders' ability to respond to and manage for today's high levels of uncertainty in the world. Various techniques are available to help leaders anticipate the future or shape future options, for example: trend analysis, forecasting, horizon scanning, scenario planning and contingency planning, whilst there are, of course, other less 'numbers-based' methods like soliciting the opinions of specialist advisers and facilitated discussions with different stakeholder groups.

v) Creative thinking: As well as being good analysts and predictors, strategic thinkers and leaders need sometimes to be able to come up with fresh ideas and have imagination - to ask 'what if?' questions and think in terms of how things might or could be, rather than just how things are or are likely to be. This calls for some appreciation of the nature of creative thinking, how to foster creativity, and of some creatve-thinking approaches and tools. It's often the route to coming up with radical or 'non-obvious' solutions to problems.

vi) Listening & reflecting: I think a key marker of a good strategic thinker is the readiness to consult and involve other people rather than just think alone - particularly the various people who are connected with or who have an interest in the issue or situation concerned (for example, other managers, front-line staff, customers, suppliers). It means being keen to share thoughts, asking others to give their views, listening carefully, responding with questions, building on others' ideas and debating certain points at greater length. Additionally, it means taking extended time sometimes to reflect in depth on some things that others have said and - crucially also - on one's own opinions or perspectives on issues. Part of self-reflection is deliberately fostering intuitive thinking i.e. encouraging up from one's subsconscious and noting what one's instincts or 'gut' feelings suggest.

vii) 'Balanced solutions designer': By this I mean the ability to devise solutions or answers to issues in a way that satisfies a range of different (possibly conflicting) influences, concerns or criteria in a balanced and pragmatic way. Obvious examples of major factors that need 'balancing' in an organisational context are: a company's vision, resource constraints, levels of acceptable risk, customers' satisfaction levels, short vs longer-term needs, and differing priorities across stakeholders. Strategic leaders need the ability (and confidence) to make trade-offs, decide priorities and think of compromises in the factors they consider in the problems they need to solve.

viii) Judgement & decision-making: A good strategic thinker is skilled at identifying and pulling together the key strands from a review or discussion, weighing up arguments and finally framing a specific, potential decision to consider. Such evaluation rests a lot on the quality of (applied) 'judgement' - something that's difficult to define but which rests critically on lots of relevant, well-rounded knowledge and experience. For when the time comes actually to make a decision, if you're leading a group (typical with most strategic decisions in an organisation), you will need a balanced set of personal qualities, for example confidence and good persuasive skills to convey your own views, but also humility and empathy to encourage others to give their assessment. For major decisions, wherever possible, it's best to use a methodical approach e.g. define and apply a set of decision criteria and perhaps dividing up big decisions into a few segments to discuss in turn.

ix) Agile thinking: This is an increasingly important skill to effectively match the fast-moving nature of so many markets today. It involves abandoning the traditional, linear approach to strategy (referred to above) and switching to 'agile strategy', where ideas and initiatives are thought of, immediately tried out and then reviewed within a short period - with strategy essentially emerging from the cumulative effect of those tactical decisions. A key benefit of agile strategy, of course, is that it enables an organisation to respond very quickly to new or ad-hoc opportunities as they appear.

And 4 key mindsets needed in strategic thinking

i) An open and 'growth' mindset: An open mindset means keeping alert and curious to what's happening around you, always seeking to see things as they are as objectively and accurately as possible, and the readiness to let new knowledge or experiences alter or develop your existing beliefs. It includes a keenness to seek out and listen to different or new viewpoints or arguments that other people may hold and the 'intellectual humility' to accept them, learn from them and use them to help improve your own views, if appropriate. This type of mindset is helped ideally, I think, by the related idea of a 'growth' mindset, which refers to a person believing that they can always achieve more if they value ongoing learning and self-development, assisted by a positive attitude and dedication.

ii) 'Bias-aware' mindset: A good strategic thinker knows about and tries to take deliberate action to try and mitigate against the wide range of personal 'cognitive biases' and forms of 'motivated reasoning' (seeing things in a self-interested way) that can easily influence and 'distort' how a person views and interprets a situation or issue. Examples of common biases include confirmation bias, authority bias, aversion to loss/risk, and anchoring bias. A common example of motivated reasoning is giving a viewpoint that favours achievement of a goal or desire that you yourself prefer rather than what others would prefer. Also, as strategic thinking is often done in a group, good strategic thinkers are additionally aware of various cognitive biases that can afflict groups, for example groupthink, overconfidence, leader's halo-effect, polarisation of opinions and bias to sharing known information.

iii) Flexible outlook & 'state of mind': Skilled strategic thinkers know that there is never just one way to look at an issue or situation, so they are always ready to look at a situation from multiple angles (sometimes called the 'dragonfly-eye' perspective). This involves being ready both to seek out the views and expertise of other people and to apply different thinking approaches (as overviewed above). Skilled thinkers also know that a person's state of mind (or mood) can be helpful or unhelpful for different kinds of thinking (for example, it's hard to focus on detail when you're tired), so they seek to adjust their state to suit their type of thinking at the time. States basically revolve around two key dimensions: a mental focus that is either 'inwards' or 'outwards' and, secondly, a focus that is 'hard' (thinking about facts and detail) or 'soft' (thinking openly, relaxed, and holistically).

iv) Positive and aspirational mindset: Strategic thinking is best done with an attitude that is optimistic, positive, confident and ambitious about the future. This naturally complements and supports an open mindset and fosters, in particular, fuller and more original thinking. In contrast, a negative mindset will tend to 'narrow down' and frustrate people's thinking. Also, of course, a positive mindset is infectious and will in turn motivate others and foster better thinking by a group.

A valuable, flexible 'tool-kit' for major decisions

In this blogpost I have focused on identifying the menu of key thinking skills and some critical mindsets that are important for skilled strategic thinkers. I haven't been able to identify all useful qualities (e.g. tolerance for ambiguity), nor have I had the space to say more about the many, specific thinking tools that are available to assist strategic thinkers.

Unfortunately, strategic thinking is not easy to do: it can take time, there is no fixed way of doing it; there are no right or simple answers, many issues can be abstract and imprecise, and it calls for a wide set of skills. Also, sadly, it is the case that the culture in many organisations is still that 'thinking' as an activity plays second fiddle to a stress on managers actually 'doing' things (and looking busy!): hence managers often show little interest in strategic thinking.

But strategic thinking offers important benefits and so is a vital skill that all managers (at least) need to learn and practise - and which all organisations should encourage. Examples of ways organisations can do so include: ensuring senior-team meetings regularly include strategic topics; empowering people at all levels to make decisions; communicating widely the organisation's vision and strategy to guide local decisions; including strategic thinking in managers' job descriptions; recognising and rewarding staff for instances of good strategic thinking; encouraging managers to plan regular slots in their diaries for thinking; and, of course, providing appropriate coaching and mentoring for managers and other staff.

Strategic thinking needn't be daunting! For a start, it's wise to focus use of such thinking on those situations where you're dealing with significant, complex or high-risk/impact decisions, rather than everyday or routine choices. And, when strategic thinking is used, don't worry, of course, about trying to ensure you use all the various thinking approaches, mindsets or methods available: not all are likely to be relevant, anyway, and so be selective. Regard the different approaches as part of an overall, flexible tool-kit. Furthermore, to help, wherever possible, do strategic thinking as part of a (well-managed) group, as the overall range of skills and perspectives will be richer and the overall prcoess will likely be both easier and more productive.

Above all, what matters, is to value the overall principle and approach of 'thinking strategically', rather than making all decisions without any deliberate thought at all!

Written by Mike P. Owen, MBA, FCMI

Executive & strategic facilitator / coach. Partner at Owen Morris Partnership

Copyright of Owen Morris Partnership. September 2022.