As companies and as individuals we should be spending time thinking about strategy and the business environment around us but inevitably end up focusing on the here and now – the urgent rather than the important.
That means we tend to be inward looking – spending time thinking about management and control when we should be also looking outward, developing a strategy to follow.
So, what do we need to do in order to develop our strategic thinking skills?
In Developing Strategic Thought: Rediscovering the art of direction-giving, Bob Garratt writes that the Western approach to strategy formulation thought of it as a process of corporate planning.
What this means is that we should follow a series of analytical steps.
First, we decide what our goals and objective are.
Then we look at the internal and external factors around us – doing a SWOT analysis of strengths, weaknesses, opportunities and threats and a PESTLE review – political, economic, social, technological, legal and environmental conditions.
We take all that information and identify the strategic options open to us, analyze them and select the ones we intend to follow.
These selections are then used to decide what resources are allocated, how budgets are developed and the management controls that need to be in place. Once the strategy is set, it is followed.
This is all very linear and logical. And Bob argues that it misses the point.
All of this is very me me me.
Competitors are only seen as threats. Customers are simply revenue sources. Strategic alliances are not considered.
That said, the approach worked for a long time, but in a globalized business environment different models are now in play.
Much of Japan’s success in developing new markets rests with the approach its companies took to developing strategy.
It was a much less tidy approach.
Kenichi Ohmae, writing in The Mind of the Strategist: The art of Japanese business, describes an approach where views and opinions about competitors, customers and allies – their approach and likely strategies is blended with the company’s thoughts – and goals and plans emerge as a result.
It’s less like following a path and more like playing chess, except there are more than two players.
The choices we make depend on the moves other people make and our expectations of how they will move and how they will respond to the moves that we make.
The Eastern approach, therefore, is non-linear and continnual, and strategy emerges rather than being planned.
Both approaches have their place.
Understanding which approach we naturally tend towards, however, may help us when considering what do do in a broader context.
And, a wise strategist will probably combine both approaches to inform one’s own strategy.