Bonn, I 2001
Bonn, I 2001
Bonn, I 2001
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Ingrid Bonn
Graduate School of Management, Griffith University, Queensland, Australia
Core competences,
My research interest in strategic thinking The ability to think strategically, however,
Management development
started in 1993 when I interviewed 35 senior is crucial to remaining competitive in an
Abstract executives for a longitudinal study on the increasingly turbulent and global
Lack of strategic thinking by environment. Considering that the average
changes in strategic planning and strategic
senior managers has been
management in large organisations between life expectancy of US Fortune 500 companies
identified as a major shortcoming
in organisations. Draws on 1982 and 1993. These senior executives were is only between 40 and 50 years (de Geus,
concepts in management and responsible for strategic planning, strategic 1997) and that only 49 percent of the 100
psychology to present a
management or corporate development in 35 largest manufacturers in Australia in 1982
framework that can be used to were still among the top 100 manufacturers
remedy this situation. Argues that of the 100 largest manufacturing companies
in 1993 (Bonn and Christodoulou, 1996), the
strategic thinking needs to be in Australia. The interviews lasted between
addressed at two different, but need for strategic thinking has never been
three and four hours and one of the questions
interrelated levels: the individual greater.
level and the organisational level. I asked concerned the problems that they had
This paper presents a framework that can
Organisations that successfully experienced with their strategic planning or
be used to increase strategic thinking in
integrate strategic thinking at strategic management approach in the
these two levels will create a organisations. It argues that strategic
preceding five years. thinking needs to be considered at two
critical core competency that
forms the basis of an enduring The main problem identified by the different, but inter-related levels.
competitive advantage. majority of senior executives was strategic Organisations that successfully integrate
thinking. Interestingly, strategic thinking strategic thinking at these two levels will
was a problem regardless of whether the create a critical core competency that forms
companies had a formalised strategic the basis of an enduring source of
planning system or used a non-formalised competitive advantage.
approach. For example, one senior executive
from a company with a formalised strategic
planning system stated: The debate on strategic thinking
Our senior executives tend to get carried
away by details and lose their strategic There is no agreement in the literature on
perspective. what strategic thinking is. A number of
authors have used the term interchangeably
Similarly, a senior executive from a company with other concepts such as strategic
without a formalised planning system planning or strategic management. Wilson
reported: (1994) for example notes that:
It is a major challenge to get our decision This continuing search for improvement has
makers to think in strategic rather than profoundly changed the character of strategic
operational terms. planning so that it is now more appropriate to
refer to it as strategic management or strategic
This lack of strategic thinking is not
thinking (p. 14, italics in original).
restricted to organisations in Australia. As
research from the Institute of Directors in Other authors have focussed on strategic
London has shown, 90 per cent of directors management processes and either stated
and vice-presidents ``had no induction, explicitly that good strategic planning
inclusion or training to become a competent contributes to strategic thinking (Porter,
direction giver of their business'' (Garratt, 1987) or assumed implicitly that a well
1995a, p. 242). According to Garratt (1995a), designed strategic management system
this percentage ``seems to hold good in facilitates strategic thinking within an
Management Decision organisation (Thompson and Strickland,
39/1 [2001] 63±70 1999; Viljoen, 1994).
The current issue and full text archive of this journal is available at
# MCB University Press Mintzberg (1994) suggested a clear
[ISSN 0025-1747] http://www.emerald-library.com/ft
distinction between strategic thinking and
[ 63 ]
Ingrid Bonn concepts such as strategic planning. He collectivity . . . Thus the individual not only
Developing strategic thinking stated that ``strategic planning is not acts on behalf of the organization in the usual
as a core competency strategic thinking'' (p. 107) and argued that agency sense, but he also acts, more subtly `as
Management Decision each term focuses on a different stage in the the organization' when he embodies the
39/1 [2001] 63±70 values, beliefs, and goals of the collectivity.
strategy development process. In his view,
strategic planning focuses on analysis and Thus, understanding strategic thinking
deals with the articulation, elaboration and requires a dual-level approach that
formalisation of existing strategies. Strategic investigates the characteristics of an
thinking, on the other hand, emphasises individual strategic thinker as well as the
synthesis, using intuition and creativity to dynamics and processes that take place
create ``an integrated perspective of the within the organisational context in which
enterprise'' (p. 108). He claimed that strategic the individual operates. For instance, to
planning is a process that should occur after obtain an accurate picture of the effects of
strategic thinking. Garratt (1995b) argued differing leadership styles on strategic
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along similar lines. He defined strategic thinking, we can look at their impact on
thinking as a process by which senior individual managers and on the way they
executives ``can rise above the daily influence the wider organisational climate,
managerial processes and crises'' (p. 2) to culture and structure.
gain a different perspective of the
organisation and its changing environments.
Heracleous (1998) made the distinction
Strategic thinking at the individual
between strategic planning and strategic
level
thinking by an analogy to single-loop
learning and double-loop learning. In his Strategic thinking at the individual level
view, the former is analogous to strategic comprises three main elements:
planning, the later to strategic thinking. He 1 a holistic understanding of the
claimed that single-loop learning involves organisation and its environment;
thinking within existing assumptions and 2 creativity; and
taking actions based on a fixed set of 3 a vision for the future of the organisation.
potential action alternatives. Double-loop Each of these elements will be addressed
learning, in contrast, challenges existing in the following sections.
assumptions and develops new and
innovative solutions, leading to potentially A holistic understanding of the
more appropriate actions. Heracleous argued organisation and its environment
that like single-loop learning and double-loop A crucial element of strategic thinking is the
learning, strategic planning and strategic ability to take a holistic perspective of the
thinking are interrelated in a dialectical organisation and its environment. This
process and are equally important for requires an understanding of how different
effective strategic management. problems and issues are connected with each
This article supports the view that other, how they influence each other and
strategic thinking and strategic planning are what effect one solution in a particular area
two different concepts and that strategic would have on other areas. As Kaufman
planning is a process, which takes place after (1991) has expressed it:
strategic thinking. My analysis in the Strategic thinking is characterized by a
following sections demonstrates that switch from seeing the organization as a
strategic thinking manifests itself at two splintered conglomerate of disassociated
parts (and employees) competing for
different levels: the individual level and the
resources, to seeing and dealing with the
organisational level. This approach
corporation as a holistic system that
integrates the micro domain's focus on integrates each part in relationship to the
individuals and groups with the macro whole (p. 69).
domain's focus on organisations and their
context. In other words, it acknowledges the Taking a holistic approach requires the
influence of individual characteristics and ability to distance oneself from day-to-day
actions on the organisational context and operational problems and to see how
vice versa, the influence of the organisational problems and issues are connected to the
context on individual thinking and overall pattern that underlies particular
behaviour. As Chatman et al. (1986) have details and events. Senge (1990) has called
argued: this approach ``systems thinking''. He argued
When we look at individual behaviour in that:
organizations, we are actually seeing two We must look beyond personalities and
entities: the individual as himself and the events. We must look into the underlying
individual as representative of this structures which shape individual actions
[ 64 ]
Ingrid Bonn and create the conditions where types of Thus, the ability to reflect on mental models
Developing strategic thinking events become likely (p. 43). and to challenge prevailing assumptions and
as a core competency
Such an attention to the underlying core beliefs is crucial for the development of
Management Decision unique strategies and action programs. This
39/1 [2001] 63±70 structures of complex situations requires
thinking in terms of processes rather than requires strategic thinkers to understand
events to enable a reconciliation of apparent their own behavioral patterns as well as
contradictions and the development of existing concepts and perceptions within the
innovative solutions. organisation. Strategists should enjoy the
Mastering complexity in organisations also challenge of thinking ``out of the box'' and of
requires managers to be familiar with the using imagination and creativity to explore
dynamics of organisational life. Stacey (1996) whether there might be alternative ways of
argued that managers need a thorough doing things. De Bono (1996) has made this
understanding of how organisations and point very clear:
managerial actions change over time and of Without creativity we are unable to make full
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the feedback processes that lead to such use of the information and experience that is
already available to us and is locked up in old
changes. This includes being sensitive to the
structures, old patterns, old concepts, and old
subtle interactions between the different
perceptions (p. 17).
parts of the organisation and understanding
the structural causes of behaviour and their Creativity is a process that begins with the
effects on other parts of the organisation. generation of ideas. As de Bono (1996) has
Finally, a holistic view requires noted
recognition that organisations are . . . strategy is too often seen solely as a
components within large and complex reduction process in which various
systems, such as markets, industries and possibilities are reduced to a sensible course
nations. Strategic thinkers need to of action (p. 72).
understand how organisations are embedded Creative thinking is needed to imagine
within this wider context and how they are multiple possibilities and to search for
influenced by the dynamics, interconnection alternatives to conventional approaches.
and interdependency of these systems. The creative process also involves the
selection and development of ideas. Good
Creativity strategists are able to recognise the potential
Strategy is about ideas and the development of a new idea at a very early stage. To
of novel solutions to create competitive
visualise the value of an idea that has been
advantage. Strategic thinkers must search
put forward by people from different
for new approaches and envision better ways
organisational levels might be even more
of doing things. A prerequisite for this is
important than the generation of original
creativity, in particular the ability to
ideas by the strategist. As Robinson and
question prevalent concepts and perceptions
Stern (1997) have observed:
(de Bono, 1996) and to recombine or make
The larger the company, the more likely it is
connections between issues that may seem that the components of creative acts are
unconnected (Robinson and Stern, 1997). already present somewhere in it, but the less
According to Amabile (1998), creative likely it is that they will be brought together
thinking refers to ``how people approach without some help (p. 15, italics in original).
problems and solutions ± their capacity to put
existing ideas together in new combinations'' Finally, there is the need for translating the
(p. 79, italics in original). This involves new idea into practice. Senior management
challenging the ``tyranny of the given'' (Kao, must provide the resources that are needed to
1997, p. 47) by questioning prevailing beliefs implement the idea. As Amabile (1998) has
or mental models in the organisation. Senge noted:
(1990) has described mental models as . . . deciding how much time and money to
give to a team or project is a sophisticated
``deeply ingrained assumptions,
judgment call that can either support or kill
generalizations, or even pictures or images
creativity (p. 82)
that influence how we understand the world
and how we take action'' (p. 8). He argues that
A vision for the future
such models are often tacit and beneath our
Strategic thinking should be driven by a
level of awareness, yet they have a strong
strong sense of organisational purpose and a
influence on organisational behaviour:
vision of the desired future for the
. . . new insights fail to get put into practice
because they conflict with deeply held organisation. A genuine vision ± as opposed
internal images of how the world works, to the popular ``vision-statements'' ± conveys
images that limit us to familiar ways of a sense of direction and provides the focus for
thinking and acting (p. 174). all activities within the organisation.
[ 65 ]
Ingrid Bonn For Senge (1990), a genuine vision is ``a consistent alignment (p. 229, italics in
Developing strategic thinking calling rather than simply a good idea'' (p. 142, original).
as a core competency
italics in original). In his view, visions are Developing a genuine vision and building it
Management Decision ``pictures or images people carry in their
39/1 [2001] 63±70 into the very fabric of the organisation must
heads and hearts'' (p. 206). They represent be a central element of the daily work of
what one truly wants, based on fundamental strategic thinkers. A vision that is shared
intrinsic values and a sense of purpose that throughout the organisation fosters
matters deeply to the people in the commitment rather than compliance and
organisation. creates a sense of commonality that
Evidence for the importance of a clear permeates the whole organisation. It inspires
vision has been provided by Collins and people's imagination and provides a focus
Porras (1998). Their research showed that that allows individuals to contribute in ways
visionary companies outperformed non- that make the most of their expertise and
visionary companies significantly. One talents. Ultimately, as Collins and Porras
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dollar invested in a general market stock have shown, a genuine vision helps to
fund on January 1, 1926 would have grown to achieve superior performance in the long-
415 dollars by December 31, 1990, while the term.
same dollar invested in a visionary company
stock fund would have grown to 6,356 dollars,
a difference of over 1500 percent. Strategic thinking at the
According to Collins and Porras (1998), the organisational level
visionary companies did not attain this
The organisational level provides the context
extraordinary long-term performance
in which individual strategic thinking can
because they wrote one of the elegant vision
occur. Organisations need to create the
or mission statements that have become
structures, processes and systems that:
popular in recent years. They pointed out
1 foster ongoing strategic dialogue among
that ``Just because a company has a `vision
the top team; and
statement' (or something like it) in no way
2 take advantage of the ingenuity and
guarantees that it will become a visionary
creativity of every individual employee.
company!'' (p. 201, italics in original). Instead,
leaders in visionary companies place strong
Strategic dialogue
emphasis on building an organisation that
Strategic thinking requires time for
has a deep understanding of its reason for reflection and exploration. As Hanford (1995)
existence and of its core values, those has noted:
fundamental and enduring principles that At the strategic level . . . speed can be the
guide and inspire people throughout the surest way of not being strategic, e.g.
organisation and bind them together around scheduling time slots that are ridiculously
a common identity. Thomas J. Watson, Jr. short for thinking through a key issue or
(1963), former IBM chief executive, made this opportunity; or for learning something new;
point very clear: or to change and clarify key organizational
I firmly believe that any organization, in roles. All these strategic challenges take time.
order to survive and achieve success, must Time urgency here would be counter
have a sound set of beliefs on which it productive (p. 166).
premises all its policies and actions (p. 5). Eliminating the widespread ``we just don't
These beliefs ``must always come before have the time'' syndrome, is an important
policies, practices, and goals. The latter must prerequisite for strategic thinking.
always be altered if they are seen to violate Organisations must create the time and space
fundamental beliefs'' (pp. 72-73). for senior managers to engage in dialogue
Collins and Porras (1998) found that it was about strategic issues, insights and ideas on a
not the content of the vision (or beliefs as regular basis. Strategic thinking requires
Watson has called it), but its authenticity as senior management teams to learn how to
well as the consistency with which it was explore complex and conflictual issues
translated into everything that the together. Collective strategic dialogue ± if it
organisation does, its objectives, strategies, is done in a constructive way ± takes
policies, systems, structures and underlying advantage of the synergistic potential of
processes. In the words of Collins and Porras several minds to be more insightful than a
(1998): single mind. It goes beyond one individual's
It's not what you believe that sets you apart as understanding and enables team members to
much as that you believe in something, that gain a richer grasp of the organisational
you believe in it deeply, that you preserve it complexity, leading to new clarity and
over time, and that you bring it to life with insight that could not be achieved
[ 66 ]
Ingrid Bonn individually. As Eisenhardt et al. (1997) have Over time, the suggestions from the
Developing strategic thinking argued: members of the Strategic Thinking Forum
as a core competency Such contact forces executives to develop and and the subsequent discussions during the
Management Decision articulate arguments more effectively and retreats will help to raise corporate
39/1 [2001] 63±70 clearly so that they can be conveyed to others. awareness and act as a catalyst for collective
In turn, executives not only learn and shape learning. Strategic dialogue among senior
their own view through this process, but they
managers will become truly strategic and not
also come to learn those of others . . . In this
be predominated by crises and short-term
way, interaction creates a process of social
discovery in which continued communication ``fixes''. Strategies developed through this
builds an increasingly complex and realistic process will not be based on shallow
understanding of key information and compromises, but on thorough reflection and
preferences (p. 52). insight and on a shared understanding of the
organisational challenges. Consequently, the
Individual team members must truly want
implementation of strategies and action
the benefits of strategic dialogue and be
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among the top team, organisations must and not by external pressures (p. 79).
create an environment in which all She suggested to use the following
employees are encouraged to participate in managerial practices to promote intrinsic
the development of innovative ideas and motivation:
strategies. Collins and Porras' (1998) research 1 match employees with assignments that
has shown that visionary companies had a make use of their expertise and abilities;
stronger organisational orientation than the 2 give employees autonomy in how they
comparison companies. Senior managers in approach their work;
visionary companies placed great emphasis 3 provide the necessary resources;
on designing organisational structures, 4 establish supportive work-teams;
processes and mechanisms that stimulated 5 encourage recognition by supervisors;
improvements and change. They built their and
``own unique drive for progress into the very 6 create a climate where the whole
fabric of the organization ± into goals, organisation supports creative efforts.
strategies, tactics, policies, processes,
The importance of intrinsic motivation has
cultural practices, management behaviors,
also been emphasised by Robinson and Stern
building layouts, pay systems, accounting
(1997). Their research suggested that an
systems, job design ± into everything that the
employee's creativity strongly depends on
company does'' (p. 201, italics in original). ``the desire to work on something for its own
In other words, executives in visionary
sake'' (p. 59). They recommend that
companies designed the context within organisations take special care ``to nurture
which employees could contribute to the the intrinsic motivation that gives employees
overall vision of the organisation and they the desire to be creative'' (p. 58).
created a culture that was conducive to Besides fostering the intrinsic motivation
creativity and innovation. Kilmann et al. of employees, senior managers need to
(1986) described organisational culture as the provide time and space for creativity and
``social energy that drives ± or fails to drive ± innovation to occur. Consider for example
the organization'' (p. 92). Wilson (1994) the ``15 percent rule'' at 3M which encourages
argued that organisational culture is the technical employees to spend up to 15 percent
``internal equivalent of the customer- of their time on projects which they have
orientation'' and ``a recognition that the chosen on their own initiative. Such a rule
values, motivation and behaviour of the stimulates experimentation and creates
organization's members are critical pockets of organisational space in which
determinants of corporate performance ± and unexpected innovation can emerge.
so the success or failure in implementing Communication is an essential medium of
strategy'' (pp. 23-24). a creative culture. Senior managers need to
The challenge for senior managers is to send the constant and consistent message
design and establish a work environment that they value creativity in their
where everyone is encouraged to explore new organisation. They need to design programs
ideas and to come up with improvements and for training and development that raise the
innovations. Senior managers who instill a general level of creative ability and that
belief in the importance of creativity foster creative thinking and innovation.
throughout the organisation, ensure that Shell for example encourages
creativity becomes part of the organisation's communication by organising collaborative
personality, the cornerstone of how it training programs where managers from all
operates. As Thomas J. Watson, Jr (1963), over the world meet in intensive joint
former IBM chief executive, has argued: problem-solving exercises at regular
[ 68 ]
Ingrid Bonn intervals. According to de Geus (1997), these Simply selecting individuals with high
Developing strategic thinking programs encourage innovation to spread strategic thinking ability or providing
as a core competency rapidly through Shell and create a powerful training in this area is not enough to ensure
Management Decision vehicle for organisational learning. that strategic thinking manifests itself in the
39/1 [2001] 63±70
Establishing an organisational culture that organisation. As outlined before,
values the ingenuity and creativity of its organisations need to create the structures,
people will result in employees taking more processes and systems that foster ongoing
initiative and having a greater sense of strategic dialogue among the top team and
responsibility in their work. They will be that take advantage of the ingenuity and
more satisfied in their jobs and develop a creativity of every employee.
greater commitment to the organisation. This requires corporate commitment to
Ultimately, they will be more effective and innovation and change and the willingness to
productive. involve people throughout the organisation
in the strategy development process. As
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Application questions
1 What determines the sustainability of 2 What type of training should
strategic thinking? How can organisations organisations provide to enhance the
ensure that strategic thinking remains a strategic thinking ability of their senior
core competency over time? executives?
[ 70 ]
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