It is an acronym for “strengths, weaknesses, opportunities, and threats.” Strengths and weaknesses are considered internal factors, and opportunities and threats are considered external factors. Similar to issue-based planning, the alignment model focuses on first looking internally to develop a strategy. Organizations’ existence is closely linked to the stakeholder’s ability to forecast the future and understand the new trends and the opportunities they create. For More Comprehensive Learning, Read: The Decision Book: 50 Models for Strategic Thinking … It would also be beneficial for younger organizations that need to gain funding without presenting a formal strategic plan. Similar to the organic model, real-time strategic planning is a fluid, nontraditional system. Read the Schoemaker & Russo classic, Decision Traps and learn the four stage model. The framework outlines the “Baldrige Criteria For Performance Excellence,” where organizations must demonstrate achievement and improvement to an independent board of examiners in these seven areas: To implement the Baldrige framework in your organization, start with two questionnaires that help you self-assess based on the seven Baldrige Criteria categories, and get a snapshot of your strengths and opportunities for improvement. After an issues-based plan has been implemented and the major issues you identified are resolved, then your organization might consider shifting to a broader, more complex strategic management model. The Balanced Scorecard is a strategy management framework created by Drs. Meghan R. Murray. If your organization has a large, diverse group of stakeholders that need to find common ground, a vision that will take a long time to achieve, and a strong strategic emphasis on vision and values (instead of structure and procedures), this may be the right model for you. In fact, you likely won't be promoted, and can't succeed as a leader without it. strategic planning and operational planning to develop business strategies that have a greater chance for success I’m willing to bet one of these situations sounds familiar: If you can identify with one of these scenarios, this article is for you! Goal-based planning tackles that challenge by setting measurable goals that align with your vision and strategic plan. From there, stakeholders will create action plans for each goal and begin tracking and measuring progress. Strategic thinking is the ability to know what you want to achieve and how to achieve it. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Click To Tweet. The VRIO framework is an acronym for “value, rarity, imitability, organization.” This strategic planning process relates more to your vision statement than your overall strategy. a red ocean). Strategic Thinkers Advance Their Careers By Being Better Leaders. Real-time strategic planning involves three levels of strategy: organizational, programmatic, and operational. That's where strategic thinking comes in. The award is currently open to manufacturing, service, small business, nonprofit, government, education, and healthcare sectors. See Also: A Full & Exhaustive Balanced Scorecard Example. It doesn’t do you any good to have a strategic plan and not put it to use. The chart below, for example, demonstrates the difference between the projected and desired sales of a mock company: See Also: Gap Planning Template (+ Seven Other Strategic Planning Templates). See Also: SWOT Analysis Template (+ Seven Other Strategic Planning Templates). Tweet us @clearpointstrat, and let’s get your strategy up and running. strategic thinking and strategic planning that include reliance on systems thinking, the role of measurement and control, and a focus on the outcome (strategy) versus the process. The organic model takes an unconventional approach because it focuses on the organization’s vision and values, versus plans and processes. Peter Senge (1990) also stresses the significance of mental models in influencing our behaviour. This is typically a short-term (6-12 months), internally-focused process. Like SWOT, PEST is also an acronym—it stands for “political, economic, sociocultural, and technological.” Each of these factors is used to look at an industry or business environment, and determine what could affect an organization’s health. It is a process which is applied on an ongoing basis and hence; it involves the generation of shrewd business ideas that can fulfill growth objectives of an organization. It has these steps: 1. Dr. Liedtka says: “Strategic intent provides the focus that allows individuals within an … On a business level, strategy thinking means that you are able to come up with effective plans to resolve a situation or to achieve a company’s goal. This approach works backward from the future to the present. The company loses momentum. Unfortunately, in most companies the strategy resides solely in the head of the CEO. The previous experien… A SWOT analysis (or SWOT matrix) is a high-level model used at the beginning of an organization’s strategic planning. Strategic thinking is the synthesis of thinking critically, systemically, creatively, and requires historical analysis.9 It requires feedback to adapt or learn from the interaction with the internal and external environment. That’s a great question—and the answer isn’t cut and dried. Strategic thinking is usually indirect and unexpected rather than head-on and predictable. It all starts with your organization’s vision. Perhaps it could be argued that for better strategic planning, we must also be equipped with strategic thinking. See Also: VRIO Analysis Template (+ Seven Other Strategic Planning Templates). strategic thinking is closely related to the ability to anticipate and have a long-term vision in order to understand the upcoming changes and challenges in the business, and subsequently be able to advise the organization the most successful pathway to take. SWOT Analysis Template (+ Seven Other Strategic Planning Templates), PEST Analysis Template (+ Seven Other Strategic Planning Templates), Gap Planning Template (+ Seven Other Strategic Planning Templates), Blue Ocean Analysis Template (+ Seven Other Strategic Planning Templates), Porter’s Five Forces Template (+ Seven Other Strategic Planning Templates), VRIO Analysis Template (+ Seven Other Strategic Planning Templates). Gap planning is also referred to as a “Need-Gap Analysis,” “Need Assessment,” or “the Strategic-Planning Gap.” It is used to compare where an organization is now, where it wants to be, and how to bridge the gap between. Strategic thinking is an essential skill to both short and long-term planning. SWOT Analysis. Shapes Strategic Thinking - Selection Criteria, Systematic, intuitive and expansive design thinking, Strategic Thinking: what it is and how to do it, No public clipboards found for this slide, Quality Assurance Tester en Vision Consulting. More and more, organizations are learning that past experiences are not always the best basis for developing future strategies. The strategic planning model of choice for Google, Intel, Spotify, Twitter, LinkedIn, and many other Silicon Valley successes, the OKR framework, is one of the more straightforward strategic planning tools. In the simplest form, there are three basic steps to follow when implementing the organic model of strategic planning: What type of company would the organic strategic planning model work best for? Many nonprofits use this model—for example, a disaster relief agency needs the ability to respond quickly and adapt its strategy to immediately address a crisis. It is an enhancement of the basic plan, and it is used by companies that want to go deeper into the strategic planning. Strategy mapping is a major part of the Balanced Scorecard (though it isn’t exclusive to the BSC) and offers an excellent way to communicate the high-level information across your organization in an easily-digestible format. Clipping is a handy way to collect important slides you want to go back to later. The PEST model is often used in conjunction with the external factors of a SWOT analysis. The organic model takes an unconventional approach because it focuses on the organization’s vision and values, versus plans and processes. Applying a Generalised Strategic Thinking Model to ADF Joint Professional Military Education. If your organization is able to create a blue ocean, it can mean a massive value boost for your company, its buyers, and its employees. Robert Kaplan and David Norton. A strategy map offers a host of benefits: See Also: A Strategy Map Template For Medium-Sized Companies. When applying to win the Baldrige award at the national level, organizations undergo a competitive process that involves the implementation of the Baldrige framework. This strategic management model is less focused on measures and more on goals and initiatives. Written by. Learn the four stage strategic decision-making model. Some of these frameworks have been around longer than others, or have been used in various case studies in different ways. For the . Which is why we pulled together a list of 16 of the most popular ones and describe the scenario that they are most useful. At first blush, it would appear that the only things standing in a manager’s way of becoming a Free Diver are adequate knowledge and tools to think strategically on a regular basis. Strategic thinking is based on the principle of systems thinking (Senge, 1990), which states that any problem that surfaces in a system, instead of addressing in its own silo, it … What is strategic thinking? Aine Doris . This article seeks to address these important issues by arguing that strategic thinking includes five elements: it incorporates a systems perspective, it is intent-focused, involves thinking in time, is hypothesis-driven, and is intelligently opportunistic. It provides a simple, clean, visual representation that is easily referred back to. The ultimate goal in implementing the VRIO model is that it will result in a competitive advantage in the marketplace. An actual demonstration of success will make a somewhat abstract concept become more concrete. Strategic thinking is the 'what' and 'why' of the planning process. Strategic Thinking Exercise: Simulation and Role Playing. See our User Agreement and Privacy Policy. See a strategic planning model you like? Measurement, analysis, and knowledge management. & The Malcolm Baldrige National Quality Award is “the highest level of national recognition for performance excellence that a U.S. organization can receive.” Created in 1987, the goal of Baldrige is to help organizations innovate and improve, while achieving their mission and vision. - Strategic thinking is a valuable skill for everyone in an organization, but it becomes increasingly essential, as you ascend the ladder. Strategic thinking can be come an acquired skill used on a daily basis t o better manage your business. Strategic thinkers are – more … A New Strategic Thinking Exercise. At a glance, you can tell what the RAG status of each objective, measure, or initiative is. Your organization-wide strategy is fine, but there’s one area in your business environment (or internal process) that needs to be realigned with your strategy. Here is how we see this new strategic thinking exercise coming together. For the sake of example, the screenshot below is from ClearPoint’s reporting software. Challenge #1 – Extrapolating from Today: Romano stresses the futility of imagining a car charging model by extrapolating from the current auto fueling one. The sample of the research consists of 26 articles, 47 master's theses and 7 doctoral theses. If you continue browsing the site, you agree to the use of cookies on this website. Below is a simple comparison chart from the Blue Ocean Strategy website that will help you understand if you’re working in a blue ocean or a red ocean: See Also: Blue Ocean Analysis Template (+ Seven Other Strategic Planning Templates). Strategic thinking is critical in this context, as automation increasingly takes over routine tasks and the remaining work often involves the navigation of competing priorities and trade offs. In many respects, it is even more important than strategic planning. a blue ocean) instead of a market space that is either developed or saturated (e.g. Strategic Thinking Process A clear, well-articulated strategy defines the corporate mission for those charged with carrying it out. Introduction 2 purpose of this compendium, we have focused extensively on concepts related to strategic You’ll occasionally see the PEST model with a few extra letters added on. Issue-based planning is ideal for young or resource-restricted organizations. Here’s how to think of each of the four VRIO components: Once you answer these four questions, you’ll be able to formulate a more precise vision statement to help carry you through all the additional strategic elements in your plan. The five forces it examines are: The amount of pressure on each of these forces can help you determine how future events will impact the future of your company. Executives need to thoughtfully consider how to create value for customers. If you’re interested in reading more, this Business News Daily article offers some additional details about each area of the SWOT analysis and what to look for when you create one. The article inspired a laundry list of strategic thinking exercise prompts to re-imagine a threatened business model when your service offering is under assault from online offerings, bots, or some other form of complete automation. It gives you high-level details into your measures and initiatives and allows you to drill down into each by clicking on them. Leon Young and Timothy Keeffe. See Also: Porter’s Five Forces Template (+ Seven Other Strategic Planning Templates). For example, Kim and Mauborgne explain via their 2004 Harvard Business Review article how Cirque du Soleil didn’t attempt to operate as a normal circus, and instead carved out a niche for itself that no other circus had ever tried. THE BIG IDEA . The Drivers Model is fully scalable and can apply to Fortune 500 companies, non-profit organizations, government agencies, entire enterprises, single business units, field offices, individual departments, and a work team. The idea behind Blue Ocean Strategy is for organizations to develop in “uncontested market space” (e.g. Looking at all three levels as a whole, strategy leaders can form criteria for developing, testing, implementing, and adapting strategies on an ongoing basis, allowing for quick and thoughtful responses when needed. It answers … Blue Ocean Strategy is a strategic planning model that emerged in a book by the same name in 2005. It is a meta-evaluation study designed in the survey model. ... Strategic thinking, strategic … You begin by setting OKRs at the employee level and then flow upward through the management levels. 46. Hone Questioning Skills. It is primarily used to identify specific internal deficiencies. The model fits for all sorts of decisions, be they tactical, operational, or, in our area of interest, strategic. Now customize the name of a clipboard to store your clips. If you are set on pitching a particular strategic planning model to management, be prepared to give your boss or board of directors an example of another successful company that has utilized that particular model. Some sources cite up to seven steps in the Hoshin Planning model, but the four most critical are: You visualize your objectives, measures and targets, measure programs, and action items in a Hoshin Planning matrix. Launched with Kickstarter funding in 2012, Peloton Interactive Inc. is an exercise equipment and media company that has successfully disrupted the home fitness space in the U.S. If you have any questions about the planning models above, we’d love to answer them. Likewise, leadership is essential to advancing change and influencing stakeholders towards the right outcomes. A strategic thinker has a mental model of the complete system of value creation from beginning to end, and understands the interdependencies within the chain. In the book, Becoming a Strategic Leader, Richard Hughes and Katherine Beatty define strategic thinking as “the collection, interpretation, generation, and By nature, vision statements are aspirational and forward-thinking, but they need specifics in order to be realized. A strategy map is a visual tool designed to clearly communicate a strategic plan and achieve high-level business goals. Thinking critically requires you to question everything. You may also run into Porter’s Five Forces (see #7 below), which is a similar take on examining your business from various angles. Read through each of the models or find the ones you're looking for from the list below and jump right to them. Read more about business process automation. Strategic thinking is an ability to envisage new solutions to old problems, and to constantly reinvent your point of view in a way that is unique, and benefits the purpose of your organisation. The alignment strategic planning model is particularly useful when a company needs to refine its objectives or address ongoing challenges or inefficiencies that are blocking progress. Looks like you’ve clipped this slide to already. 1901 N. Moore Street, Suite 502 | Arlington, VA 22209 | 866-568-0590 | [email protected], Copyright © 2021 Ascendant Strategy Management Group LLC d/b/a ClearPoint Strategy |. This model is designed to sync the organization’s internal operations with its strategic goals. This is just one of the many “views” you’d be able to see in scorecard software once your BSC was complete. Therefore, by performing strategic planning without strategic thinking, the crucial strategy development phas e … If you continue browsing the site, you agree to the use of cookies on this website. This research was, in part, supported by an Australian Army Research Grant and will result in a longer guide to developing strategic thinking in professional education programs. The issue-based strategic model is oriented in the present and projects into the future. It takes into account your: There are many ways you can create a Balanced Scorecard, including using a program like Excel, Google Sheets, or PowerPoint or using reporting software. Insights from. Then, the programmatic strategy requires research into the external environment to identify approaches and offerings that would help the organization achieve its mission. For example, PESTEL (or PESTLE) indicates an organization is also considering “environmental” and “legal” factors. The stakeholders identify the major issues and goals 3. Review the mission, vision, and values of the company 4. Strategic thinking is the term used for the proliferation and implementation of important business concepts to gain competitive advantage. Four directional quadrants (north, south, east, west) inform each other and demonstrate alignment. Use a Department Business Plan Dashboard. It’s primarily used by organizations that need to be more reactive, and perform strategic planning in “real time.” For these companies, detailed, long-term plans tend to become irrelevant within the typical three- to five-year planning cycle because the environment they operate in rapidly changes. THE ROLE PLAYING MODEL (BELBIN & DE BONO) It is used as a team or meeting technique to stimulate communication and create a playful/serious approach to a discussion topic. Intent focused. We know. Next, you define time frames for goal achievement. This is a long-term strategic planning tool, so goal time frames are typically about three to five years. Obviously, strategic thinking cannot replace strategic planning. There are a lot of strategic planning models out there. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Decission Making Models. The research should cover opportunities, threats, competitive advantages, and other points to spur strategic brainstorming. The leadership team or stakeholders identify the major issues and goals as a first step. We recommend determining which of these strategic planning models applies most to your organization’s way of thinking. It … See our Privacy Policy and User Agreement for details. However, review of the literature of strategic thinking shows that there is still no consensus regarding the concept of strategic thinking … The OKR framework is also effective because goals are continually set, tracked, and re-evaluated so organizations can quickly adapt when needed. You want your department to be able to see their goals and the steps to achieve them. Graetz's model holds that the role of strategic thinking is "to seek innovation and imagine new and very different futures that may lead the company to redefine its core strategies and even its industry". Your strategic planning will start by identifying a goal and analyzing which operations or resources need to be aligned with that goal. As management attempts to implement the strategy, the organization zigzags from event to event, lacking clear direction. Purpose – This paper seeks to present new insights into strategic thinking, proposing a model of strategic thinking competency.Design/methodology/approach – To find new knowledge, the research applies the Straussian grounded theory research method using multiple sources and techniques of data inquiry: in‐depth interviews, observations, literature review, and related published documents. This workshop introduces The Drivers Model, a robust yet simple method for strategic thinking. For example, if you still need to work out your vision statement, it may be wise to begin with the VRIO framework and then move to something like the Balanced Scorecard to track and manage your ongoing strategy. All in all, a Balanced Scorecard is an effective, proven way to get your team on the same page with your strategy. To think strategically means to see and understand the bigger picture of what the organization is, where it needs to go, and how it will get there. This is a fast-paced, iterative approach that flips the traditional top-down strategic models. The final operational level analyzes internal processes, systems, and personnel to develop a strategy that addresses “in-house” strengths and weaknesses. 1. In this blog, I discuss the GOST model for strategic planning. Finally, you’ll create a series of proposed changes to operations or processes to achieve goals that will create the desired strategic alignment. Execute and monitor. The key is to experience (or imagine the experience of) driving an electric vehicle with its differing needs. By continuing, you agree to our use of cookies to optimize and personalize your experience on our site. Strategic thinking is different from strategic planning. Establish budget 6. Not from a cynical … With this model, a company uses “natural,” self-organizing systems that originate from its values and then leverages its own resources to achieve goals, conserve funds, and operate effectively. The RACI matrix is a helpful visual for defining the role each person in your organization has for projects and processes, ensuring it aligns with their OKRs. The book—titled “Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant”—was written by W. Chan Kim and Renée Mauborgne, professors at the European Institute of Business Administration (INSEAD). Strategic Thinking–Defined Strategic thinking, according to the National Defense University, is a different way of approaching how we think. Basil Henry Liddell Hart, probably the foremost thinker on military strategy in the 20th century, has written, "To move along the line of natural expectation consolidates the opponent’s balance and thus his resisting power."