Summary:
Strategic planning and strategic thinking are not the same. Strategic planning is a process of identifying goals and creating a path to reach those goals. By contrast, people who have the ability to think strategically can step outside their normal frame of reference and understand that it’s only one of many possible frames.
Executives often become too focused on the task of exceeding last quarter’s numbers, that they fail to see the broader landscape. For instance, in a four-week executive-education course, students were presented with this challenge using the example of Apple’s iPod — how did a small computer company with only a 5 percent share of the market come out with this revolutionary new product, while Sony Corp., which had all the components inside its organization to create the iPod, failed to do so? The answer: simply because Sony executives failed to see outside the box and instead stayed within their comfort zone.
Article Quote:
“Planning is, by definition, a sense that there’s a Point A and a Point Z, and simply a number of steps from point to point — it’s a linear process. Strategic thinking, by contrast, is a way of conceiving of a problem or challenge more holistically.”
Link: http://www.hreonline.com/HRE/story.jsp?storyId=330860356
When strategic thinking is fostered in an organization, people can more easily identify problems areas and circumvent them before they become giant headaches. Employees become more aware of the company goals, thus becoming more engaged in the execution of the strategic plan.
For more on strategic planning and execution, see http://www.performancesolutionstech.com/category/strategicplanning/
Summary:
Gerald Nanninga uses the analogy of running a race and compares it to running a business. In the race, one runner is superbly equipped for several conditions (and must carry all of the equipment) versus a runner that packed light with only essentials. Of course the runner that packed only essentials will win the race. Companies that strive to be well equipped in all areas often find themselves burdened down, whereas a company that focuses on elements that help achieve the strategic plan are in a far better position to win.
For example, Toyota built their strategic position and their key focus of their efforts around improving the dependability in the way they designed and manufactured cars. For years, this strategy has paid off for Toyota.
Consumers’ belief in Toyota’s dependability meant Toyota could charge a premium price. Yet, somewhere along the way Toyota tried to do too much by building cars as well as trucks -and they wand to do it for every consumer segment, even segments that may not be able to afford reliability. As a result, dependability as a core focus didn’t get the attention it needed and corners were cut. Thus resulting in mass recalls.
Article Quote:
“A winning strategy points out your company’s point of focus (where it will win) and then makes trade-offs on where to place your energy so that you can win the race at that point of focus.”
Link: http://planninga-from-nanninga.blogspot.com/2010/02/strategic-planning-analogy-306-focus.html
Keeping the focused on core aspects most critical to your company’s strategic position and downplaying or outsourcing other factors allows your company to succeed without peripheral distractions. If a goal or an objective doesn’t add subsistence to the focus of the company, then it should not be pursued.
For more on strategic planning, see http://www.performancesolutionstech.com/category/strategicplanning/