How to Think Strategically

Are great strategic thinkers born or made? The answer turns out to be “yes.” Yes, individuals sit somewhere on a spectrum of innate talent and yes, you can develop that talent.

The implication for organizations is that they must find ways to identify and cultivate future leaders with the capacity to think strategically. The implication for the individual leader is that it is pointless to worry about nature versus nurture. Both matter, but there isn’t much you can do at this point on the nature side. You should focus on nurturing the talent you have.

Approaches to develop your strategic thinking ability include:

Immersion. Total immersion is the best way to learn a new language. It’s the best way to figure out complex business environments, too. Immersion is important because people need significant “soak time” in a milieu in order to build powerful mental models. Note to talent development professionals: This insight also highlights the dangers of moving people too rapidly from business to business or job to job, because there isn’t time to master the core dynamics of each new situation.

Apprenticeships. As with most arts, one of the best ways to learn to think strategically is to work closely with masters in apprenticeship-like relationships. These provide low-risk environments in which novices can observe and learn from the work of masters and so absorb their ways of thinking.

Business simulations are a great tool for developing intuition about interactions among the variables that drive organizational performance. They provide a “manageably complex” environment within which managers can safely experiment and gain insight into cause-effect relationships. Unlike the real world, you also can “wind things back” and try again if they don’t work the first time. My favorite example is theExecutive Challenge simulation developed by Enspire Learning.

Game-theory training. Game theory is the study of “games” involving intelligent actors with conflicting interests who can make moves and countermoves that yield specific potential payoffs. It’s easy to be put off by game theory because the detail involves lots of mathematics which can’t be applied in many real-world situations. But they’re great ways to imagine situations and how you might behave in them. One good reference for this isThinking Strategically by Avinash Dixit and Barry Nalebuff.

Case-based education. You can accelerate the development of your strategic thinking by exposing yourself to a diverse range of realistic “cases” and letting yourself reflect on the experiences so you can absorb the lessons. Research suggests that this sort of exposure to distillations of reality is particularly powerful when it involves comparisons of cases that are similar but involve a few key distinctions that drive significant differences in outcomes.

Cognitive reshaping.
This literally means doing mental exercises that create new habits of mind. One example is the “go to the balcony” exercise proposed by William Ury in his negotiation book Getting Past No. Ury advises negotiators to discipline themselves, regardless of how tense and difficult the proceedings, to periodically take a step back and “go to the balcony” in order to get perspective on what is happening and why, and adjust strategies accordingly. It’s a great way to develop your ability to move across levels of abstraction. Another example is the architect’s exercise, in which any time you enter a new home or office space, you take the time to think about how you would change the space to make it a more attractive place in which to live or work. This exercise is particularly helpful in developing visioning ability.

What suggestions do you have for developing the ability to think strategically?

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  1. Sangamitra Ramachander says: Submitted:

    This is more an observation than a suggestion: To me strategy seems to be about identifying the end goal and potential obstacles, and then devising the path that reduces the likelihood that any of these obstacles can potentially get in your way. So in essence it is a process of deliberate manipulation based on self (or organizational) interest. What I sometimes find challenging is to switch between this mindset and a researcher’s mindset. The latter to me requires the ability to look at something incisively, without bias or self-interest. The two approaches therefore seem opposite in spirit, perhaps requiring the use of different mental approaches.