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LAS VEGAS—“Strategic thinking is important only if you want to stay in business and have a job,” said Rich Horwath, president of the Strategic Thinking Institute and author of Deep Dive: The Proven Method for Building Strategy (Greenleaf Book Group Press, 2009), during a Mega Session June 28, 2011, at the Society for Human Resource Management’s (SHRM) 63rd Annual Conference & Exposition. “If you and your leadership team aren’t able to think strategically today, you may not have a business tomorrow.”
After all, “new growth comes from new thinking,” he said.
Horwath defined strategic thinking as “the ability to generate new insights or new ideas on a regular basis in order to generate new business.”
Instead of focusing on an organization’s strategy only during an “annual two-day pilgrimage to the Holiday Inn,” Horwath said strategic thinking should be a daily activity.
Yet business leaders tend to have a love/hate relationship with strategic planning, he observed: “We know it’s crucial for our success but we don’t want to add it to an already crowded plate.”
That’s why business strategy requires organizations to allocate limited resources through a unique system of activities—those that differentiate it from the competition, he said. “Companies that do the same thing the same way as the competition are not going to survive.”
The same is true for HR departments, he noted, which is why he asked the packed audience to stop and consider what they are doing differently in HR to bring new value to employees.
Organizations need to develop the following three disciplines of strategic thinking, Horwath said:
Acumen. “We often assume we know everything about our business,” Horwath said, though many fail to think holistically. “In business we prescribe activities and tactics and initiatives without first taking the time to diagnose what’s going on around us,” he said. “If we want to be proactive, we need to be thinking about our situation before we can prescribe strategy.”
Allocation. “We are constantly faced with tradeoffs—more of one thing means less of another,” Horwath said. But just as trees must be pruned in order to promote new growth, a company has to be able to say “no” from time to time. This is especially difficult for HR people, he noted, who want to be responsive to employees. Horwath put it this way: “When you try to do too much at work it’s like eating a pizza with everything. It’s too much, it’s messy, it tastes bad and it’s too hard to eat … When you try to be all things to all people you end up with a sloppy business.”
Action is the ability to stay focused on what’s important to the business. While executives at online retailer Amazon.com spend four hours every week discussing strategy, Horwath said, research has found that most senior management teams spend less than an hour a month discussing strategy.
“Most of us don’t use our plan to drive daily activity,” he said. “If we aren’t doing so, we may as well not have one at all.”
Rebecca R. Hastings, SPHR, is an online editor/manager for SHRM.
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