Strategic thinking, responds to the question of what we ought to be doing, and why, and focusses on the means to adapt – a way to say that Strategic thinking and innovation is the way forward.
The tech powerhouse Google Inc. is known for successful strategic thinking and innovation. Google uses lifestyle strategy to sell potential employees on the duality of work and fun. Additionally, Google earmarks a certain part of time to allow engineers to work on side projects simultaneously, which results in the potential for groundbreaking and creative ideas. Thus, with the help of Strategic thinking, Google has been able to benefit from new business opportunities.
Adaptability is being equipped to adjust or modify a plan to meet challenges brought by a shifting market environment. A skilled strategic thinker recognizes that a successful strategy today may not work well tomorrow; thus, these individuals are continuously scanning the environment for signs that indicate adjustment may be required. But, “paradoxically, a firm’s history and its current strategy, structure, people, and culture often combine to dampen innovation and adaptive change. Old processes that are key to the success of established companies are the very processes that reject disruptive technologies. Adaptability is critical when “crossing the chasm” and introducing a discontinuous innovation into the market.
Strategic thinking and innovation, strategic planning and operational planning are all important facets indispensable to developing business strategies that have a greater chance for success. Organizations are increasingly learning that precedent experiences are not always the foundations for developing future strategies. Executives require to be mindful in considering how to create value for customers. Strategic planning, while vital, leans on the ”how” and “when” of the process of strategic business planning and infrequently capture the essence of what it means to think strategically as well, and it is at this point where strategic thinking comes into picture.
Nobel-prize winning research by Herbert Simon, Amos Tversky, Vernon Smith and Daniel Kahneman demonstrated that people make decisions based on the relatively small amount of information we are able to keep in our usable memory, and those decisions lead us to prefer avoiding losses over seizing gains. Whenever a subject is offered two exclusive choices, one where they can avoid losing $5 and another where they can find $5, the majority of people instinctively go for the first option. In some experiments, the threat of loss was found to be twice as motivating as the promise of an equivalent gain. You can see how this has become a problem for innovators. Innovation has to face the stiff winds of this loss aversion alongside the tendency to trust in the advice of authorities instead of hard data.
Business owners that make strategic thinking a central theme of their management idea often become better strategic thinkers with the passage of time. They learn how to incorporate Strategic thinking and innovation in the business milieu that will have a direct impact on their revenues. They become more adept at envisioning how competitors are likely to respond to the strategies put in force by them. They begin to view the business from their customers’ perspective, and formulate strategies to enhance their capability to tap new potential customers.