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Strategic+thinking +dr.behboudi-session1

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strategic thinking

strategic thinking

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  • 1. Strategic Thinking Session 1
  • 2. AGENDA • • • • • • What is the Strategic Thinking? Evolution of Strategic Management Evolution of Thinking in Management Elements of Strategic Thinking Levels of Strategic Thinking Strategic Thinking Process
  • 3. What is Strategic Thinking?
  • 4. What is Strategic Thinking? • Strategic thinking is defined as a mental or thinking process applied by an individual in the context of achieving success in a game or other endeavor. • It‟s a cognitive activity. • It produces thought.
  • 5. What is Strategic Thinking? • When applied in an organizational strategic management process, strategic thinking involves the generation and application of unique business insights and opportunities intended to create competitive advantage for a firm or organization. • It can be done individually, as well as collaboratively among key people who can positively alter an organization's future. • Group strategic thinking may create more value by enabling a proactive and creative dialogue, where individuals gain other people's perspectives on critical and complex issues. This is regarded as a benefit in highly competitive and fast-changing business landscapes.
  • 6. Evolution of Strategic Management
  • 7. First Phase: CEO Era • The first phase in the evolution of the strategy paradigm involved “basic financial Planning” in the 1950s where the typical planning focus for the firm was the Preparation of the financial budget with a timehorizon barely beyond 12 months. • The success of the organization was dependent on the quality of the CEO and the top management team and their knowledge of products, markets and rivals (Gluck et al., 1980).
  • 8. Second Phase: Forecast Based Planning • The second phase of “forecast based planning” in the 1960s resulted in organizations embracing a longer time horizon, environmental analysis, multi-year forecasts and a static resource allocation as the firm responded to the demands of growth (Gluck et al., 1980).
  • 9. Second Phase: Forecast Based Planning • Introduction of SWOT analysis by Andrews • He described the strategy as “…the pattern of major objectives, purposes or goals…stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be”
  • 10. Fourth Phase: The Change Era • The change from Strategic Planning to Strategic Management • The raise of the importance of the firms internal resources and capabilities in creation of competitive advantage!
  • 11. Fourth Phase: The Change Era Key Characteristics: • A planning framework that cuts across organizational boundaries and facilitates strategic decision making about customer groups and resources. • A planning process that stimulates entrepreneurial thinking. • A corporate values system that reinforces managers „commitment to the company strategy”
  • 12. Fifth Phase: Raise of Strategic Thinking Strategic Thinking becomes the essence of strategic management: • 1. Changing concept of strategy; • 2. Changing process of strategic formulations; • 3. New tools of strategy analysis (Grant, 2010, 25).
  • 13. 1950: Financial Budgeting 1960s: Corporate Planning 1970s1980s: Strategy as Positioning 1990s: Quest for Competitive Advantage 2000s: Strategy for New Economy 2010s: Strategy for the New Millennium Evolution of Strategy Concept
  • 14. From Mechanical to Strategic Mindset! EVOLUTION OF STRATEGIC THINKING
  • 15. Subjects Thinking Process Evaluation Solution Results: Rearrangement of the factors Mechanical Thinking!
  • 16. Subjects Thinking Process Evaluation Solution Results: Regional optimization or seeing the trees instead of forest! Intuitive Thinking!
  • 17. Subjects Thinking Process Evaluation Solution Evolving or changing the place of the factors! Strategic Thinking!
  • 18. ELEMENTS OF STRATEGIC THINKING
  • 19. Intelligent opportunism Intent Focus System Perspective Thinking in time Strategic Thinking Hypothesis Driven Model of the Elements of Strategic Thinking
  • 20. System Perspective • A strategic thinker has a mental model of the complete system of value creation from beginning to end, and understands the interdependencies within the chain. • The systems perspective enables individuals to clarify their role within the larger system and the impact of their behavior on other parts of the system, as well as on the final outcome.
  • 21. System Perspective • This approach addresses, therefore, not only the fit between the corporate, business, and functional levels of strategy, but very importantly, the person level. • From a vertical perspective, strategic thinkers see the linkages in the system from multiple perspectives and understand the relationship among the corporate, business, and functional levels of strategies to the external context, as well as to the personal daily choices they make. From a horizontal perspective, they also understand the connections across departments and functions, and between suppliers and buyers.
  • 22. Intent Focused • Strategic intent provides the focus that allows individuals within an organization to marshal and leverage their energy, to focus attention, to resist distraction, and to concentrate for as long as it takes to achieve a goal. In the disorienting swirl of change, such psychic energy may well be the scarcest resource an organization has, and only those who utilize it will succeed. • Therefore, strategic thinking is fundamentally concerned with, and driven by, the continuous shaping and re-shaping of intent.
  • 23. Thinking in Time • Strategy is not solely driven by the future, but by the gap between the current reality and the intent for the future, by connecting the past with the present and linking this to the future, strategic thinking is always “thinking in time.”
  • 24. Hypothesis Driven • It mirrors the “scientific method”, in that it deals with hypothesis generating and testing as central activities. Because it is hypothesis-driven, strategic thinking avoids the analytic-intuitive dichotomy that has Long Range Planning characterized much of the debate on the value of formal planning (liedtka, 1998). • Strategic thinking is both creative and Critical, in nature. Figuring out how to accomplish both types of thinking simultaneously has long troubled cognitive psychologists, since it is necessary to suspend critical judgment in order to think more creatively.
  • 25. Individual • 1. A holistic understanding of the organization and its environment; • 2. Creativity; • 3. A vision for the future of the organization. Organizational • 1. Foster ongoing strategic dialogue among the top team; • 2. Take advantage of the ingenuity and creativity of every individual employee. LEVELS OF STRATEGIC THINKING
  • 26. Ask Clarify Consider Reframe Simplify The Process of Strategic Thinking