Strategic Thinking: How to Find the Best Way Forward 

“Strategic thinking rarely occurs spontaneously.”

– Michael Porter

Today, companies operate in an environment of rapid and continuous change–technological, political, social, and global in scope. If you simply do your job and aren’t mindful of the emerging trends that may affect the future success of your organization, you’ll be stuck in the operational loop. You’re not seen as someone who can help the company innovate and respond to new competitors or evolving market conditions. 

What Happens When You Don’t Plan Ahead

Remember Blockbuster Video? At its height in the ‘90s, the retail video-rental chain had 9,000 stores and nearly $6 billion in annual sales, and was acquired by media-conglomerate Viacom. Then came Netflix, and the idea that people could rent movies through the mail–and soon after that, could simply stream them, without racking up late fees. Suddenly, a movie-rental company was operating without leasing expensive retail space, saving a fortune on overhead and raking in profits. Redbox also entered the space, giving consumers a quick way to rent movies while visiting the grocery store.

Rather than innovating and figuring out how to make their stores an entertainment destination–small-group private movie nights, maybe? Movie trivia events?–or exiting retail leases as they came up for renewal, managers stuck their heads in the sand. At one point, Blockbuster even had a chance to purchase Netflix for $50 million, but leaders passed.

Too late, Blockbuster tried to stay competitive, sacrificing $200 million in revenue by eliminating late fees. The company filed for bankruptcy in 2010, and closed its remaining 300 stores in 2013. Today, there is a single Blockbuster store in Bend, Ore.

You can imagine what it was like for Blockbuster managers to try to find their next position, after leading the company into one of the most spectacular corporate implosions of the era. 

Executives who consider how their company’s competitive landscape is changing and formulate possible new strategies stand out as partners to senior leaders. In fact, junior managers have great opportunities to display strategic thinking–they often have visibility into trends such as customer behaviors, competitive moves, and regional differences that are usually off senior staff’s radar. 

What is Strategic Thinking?

Strategic thinking is the difficult work of analyzing problems and opportunities from a broad perspective. Great strategic thinkers don’t just consider what’s happening now–they link information from the past and the present to build foresight about the future.

Smart strategic thinking is more than analyzing what you know now and setting a strategic course. Successful strategy must be adaptable as new conditions arise.

Watch Harvard Business Publishing explain The Difference Between Strategic Planning and Strategic Thinking in this video.

Four Steps to Better Strategic Thinking

Many people think strategic thinking is about inspiration hitting you. In fact, most great strategic thinkers have a process they use regularly to come up with new strategic ideas.

1. Gather: Find and assemble data about your environment and your organization’s current strategy from diverse sources, not just the most readily available ones.

2. Analyze: Structure and explore the data until you spot emerging patterns that spark new insights.

3. Project: Imagine what the future could hold, and how likely changes could affect your company.

4. Strategize: Prioritize the decisions and actions that must be made now. Set your strategy only after consulting with trusted connections and considering the trends your data revealed.

As you can imagine, leaders who reserve time in their schedule for strategic thinking and systematically discuss emerging data with trusted colleagues have more innovative ideas that help position them as valuable leaders.

Who Needs to Be a Strategic Thinker?

Leaders at every level–and anyone who hopes to become a leader–need to sharpen their strategic thinking skills. To begin, think more broadly than your job description calls for and ask probing questions–across organizational boundaries, of longtime connections, new acquaintances, and diverse stakeholders. Start gathering and analyzing data about emerging trends in your industry.

If you can spot trends or determine a better way forward before others do, you build your influence and get noticed by senior executives.

Watch how Howard Schultz—an outsider—build Starbucks into a global coffee powerhouse in this Bloomberg video.