Entrepreneurs come in all shapes and sizes, but one thing they invariably have in common is vision. They see opportunities to innovate and improve the things around them.
But is vision enough?
As author, professor, and organizational behavior expert Lee Bolman says, “A vision without a strategy remains an illusion.”
In other words, vision alone can’t build companies, create change, or weather the ups and downs of your professional life. You need strategic thinking skills to turn your ideas into reality despite the obstacles in your way.
What is strategic thinking?
At its most basic level, strategic thinking is the ability to analyze the present and solve complex problems to plan for future success. It involves intentionally considering your strengths and weaknesses and how they might interact with opportunities and threats in the environment.
Strategic thinking lets you view the day-to-day operations of your business through a big-picture lens. This allows you to more effectively evaluate how the decisions you make today will impact your future growth.
The importance of strategic thinking in business
Strategic thinking skills help you identify opportunities for your business and come up with a plan to take advantage of them. By doing so, you can increase your market share and profit, helping to create long-term growth.
In particular, developing strategic thinking skills can help you do the following:
- Improve decision-making: Strategic thinking gives you the tools to analyze a challenge and make informed decisions to move your company forward. As a result, you avoid indecision paralysis.
- Identify priorities: If you’re like most business owners, you have limited resources and seemingly unlimited things to accomplish. By honing your strategic thinking skills, you can better identify the actions that are most likely to generate long-term growth and de-prioritize tasks that may get in the way of high-impact work.
- Focus on the big picture: The strategic planning process goes beyond defining day-to-day work. It involves looking at your business holistically and choosing strategies and initiatives that create short- and long-term growth.
- Create competitive advantages: By looking forward and anticipating trends, you can position your company as an early adapter. This allows you to build your market share while others are working to catch up.
- Minimize risk: When you consider the future impact of your decisions, you’re better able to avoid choices that might hurt consumer or stakeholder trust and put your startup at legal or financial risk.
Types of strategic thinking skills
Strategic thinking skills help you develop possible solutions for a complex problem and then identify which path forward will optimize your chances of success.
Here are a few skills that fall under the umbrella of strategic thinking:
- Critical thinking: Analyzing a problem or situation, often by breaking it down into smaller components and observing how various factors and inputs interact
- Problem-solving: Identifying and prioritizing problems then developing solutions and taking action
- Communication: Explaining a problem, asking for insight, and collaborating to come up with a solution
- Objectivity: Viewing your business and its challenges without personal bias, or the ability to recognize and filter your biases
- Environmental scanning: Regularly keeping an eye on internal and external factors that may impact the future growth of your business, such as product development, competitors, and regulations
Effective strategic thinkers aren’t necessarily born with these skills. Instead, they recognize the importance of these abilities and take steps to learn and practice them.
How to develop strategic thinking skills
Here are strategies you can use to cultivate and maintain your strategic thinking skills to become a better leader and decision-maker for your business.
Conduct SWOT analyses
The SWOT analysis framework looks at your strengths, weaknesses, opportunities, and threats. It’s a valuable tool for strategic thinking because it forces you to honestly consider your company’s competitive position and the context of your business environment.
Here’s a quick breakdown of each category:
- Strengths: Your company’s core competencies, including your competitive advantages, internal resources, and intellectual property
- Weaknesses: Things your company lacks or areas where your competitors outperform you
- Opportunities: External factors and trends that benefit you, such as positive press coverage, an increase in demand for your products, and having few competitors
- Threats: External factors and trends that present challenges, such as an economic recession, a decrease in consumer demand, or an increase in competition
This type of analysis is beneficial because it involves proactively looking for threats and opportunities. By doing so, you give yourself more time to respond to threats or take advantage of opportunities before your competition does.
Continue educating yourself
Strategic thinkers are lifelong learners. In order to make informed decisions, you have to be constantly studying up on your business and the world around you.
Phil Portman, founder of the SMS marketing software company Textdrip, recommends that entrepreneurs keep learning “through reading books, attending seminars, joining industry associations, and engaging in online courses or webinars.”
By keeping your skills sharp and your knowledge current, you’ll be better able to identify threats and opportunities for your business. Not to mention, you’ll have more resources to draw from as you craft creative solutions to potential problems.
Seek out diverse perspectives
While continuing education is essential to strategic thinking, it’s important to realize you can’t learn everything there is to know. Instead, you can collaborate with others who have different experiences and ways of thinking.
For instance, if you have expertise in finance, consider working with people who have scientific, engineering, or creative backgrounds.
Talking through problems with people who use different approaches opens your mind to new thinking processes. It also can help you identify a solution you may not have seen on your own.
As an entrepreneur, you can take this one step further and actively seek senior executives with different experiences than you.
Argue both sides
Learning to argue both sides of an issue can help you identify potential weaknesses in your approach. Analyzing the pros and cons of a business strategy forces you to gather more information and stress-test the logic you used to arrive at a given conclusion.
Cultivating a strategic mindset can also include asking others to help you assess your proposed initiatives. Joan Denizot, founder of the bicycle company Zize Bikes, tells other entrepreneurs to “actively seek feedback from mentors, advisers, and peers. Constructive criticism can help identify blind spots and refine your strategic thinking approach.”
Embrace creativity
Creativity is the ability to bring about something new, whether it’s a product, business model, or solution to a problem. As an entrepreneur, you likely have some innate creativity in you. That said, it’s crucial to continue to sharpen your creative skills.
The Harvard Business Review notes that brainstorming, proactive problem-finding, time blocking, delaying decisions, and accepting failures can all boost creativity. Creativity tactics like these give you the time and space your mind needs to break free of conventional thinking and come up with new ideas.
Ask strategic questions
Strategic questions focus on the big picture of your company and invite others to consider the long-term impact of decisions. When you ask yourself and others these big questions, you break free from your day-to-day thinking and can see the whole forest, not just the trees.
Asking strategic questions can help identify priorities and stimulate creative solutions to current problems.
Examples of strategic questions to ask include:
- What does success for the company look like in five years?
- What is the biggest challenge our company is facing?
- What do we need to do to win against our main competitors?
- Which part of our business has the most potential for future growth?
Learn from the experience of others
People do some of their best learning through experience, but that’s not always feasible for entrepreneurs. If you’re just beginning your journey — or want to enter a new market — you may not have a trove of relevant experience.
As an entrepreneur, you can get impactful lessons by observing other businesses. Tim Cameron-Kitchen, founder of the digital marketing agency Exposure Ninja, recommends that entrepreneurs “study successful companies and analyze their strategies to understand how they achieved their goals.”
Remember that failure is also a valuable learning tool. Look at the wins and losses of these companies to uncover possible pitfalls and understand how successful leaders respond to setbacks.
By learning through others, you can avoid costly mistakes that are especially dangerous for young companies with limited financial runway.
Becoming a strategic thinker as an entrepreneur
When trying to create a new business or product, you want to be armed with more than just a vision in your head. You need to know how to reach each milestone, whether that’s finding the right co-founder, crafting your first prototype, or securing investment capital.
That’s where a strategic mindset comes in. Cultivating your strategic thinking skills will enable you to become a leader who can reach short-term goals in a way that sets your business up for success in the long run.
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