Strategic Thinking is a solid foundation of most successes in the modern business; it is also relevant to Strategic Human Resources Management. Most innovations are not born from one great idea; they are shaped over time, and they are critically assessed. The high-performance businesses do not focus on every single detail of its operations; they have a strategic direction, and they employ intensively both strategic thinking and planning.
There is no typical definition on strategic thinking. It is the proactive process that aims to forecast the future and to explore all options. It is intended to make right decisions today to influence the future positively. It balances the creativity, innovative approaches, and realistic expectations. It puts the emphasis on long-term focus and benefits over short-term results. It is closely and natively linked with the strategic planning, and it acts as the input for it. Its importance for the modern organization lies in the improved decision-making procedures. The organization can prepare itself for coming challenges that are still unknown or invisible.
Most strategic thinkers think at least two times about the same topic. They want to avoid misinterpretation that can lead to a disaster. They have a great ability to ask provoking questions that can confirm the team is on the track. We can see many examples from the history when a great idea was not that great when it was introduced as a new product.
When to use strategic thinking?
It plays the critical role in moments of the new vision shaping, design of new products and processes and planning of dramatic changes in the organizations. It provides the answers to two crucial questions – What and Why. Business Planning has strict rules that lead to the successfully implemented change (it is also applicable to Human Resources). The more time spent in the phase of the preparation, the less effort is required in the next step which is about strategic planning.
Usually, when we talk about the out-of-the-box approach we mean it – that we need to think critically about the future. It is the approach when we combine ideas we know with approaches we can try. It is the moment when to generate the most innovative ideas that can help us gain the competitive advantage. It is a slow process, and it requires a full involvement and engagement of the team. Almost no one can shape a great new idea without the external help from colleagues and friends.
Strategic Thinking in Human Resources
No organization can do everything for everyone. Apple is a great example that a focus on few products brings higher profits and than having a broad product portfolio. It increases the importance of strategic thinking because the company needs to choose the right products to be developed (more on HR SWOT Analysis and HR Strategy). Other options must be evaluated as non-strategic and discontinued. It frees up resources to gain the focus on the strategic agenda. The same approach needs to be applied in Human Resources.
Human Resources faces many challenges in the current world; it stands at a crossroad. The globalization and millennials are extremely challenging issues for all HR Professionals. The HR Management practices require the urgent update; they have to support global organizations and relocating talents from country to country at a low cost. Human Resources needs to find ways how to organize work under different labor regulations with a limited impact on the corporate culture, productivity and performance. The HR Professionals have to find new and creative ways how to gain the competitive advantage.
The role of Strategic Thinking
Strategic thinking is the creative activity of the individual or the team. It plays a crucial role in the assessment of the status, generating new ideas or concepts. It is also important during the design of new processes, products and procedures that are aimed to gain the competitive advantage. Strategic Planning should always follow the phase when thinking about the future strategically.
Critical thinking is a crucial component of the successful leadership. Most leaders have the excellent ability to think strategically about the organization and the status of the business. They see positives; they clearly recognize opportunities. It is also about risk taking; no innovative idea can succeed without healthy risks. Most innovations die soon after they are implemented. A great leader knows that successful innovations will pay all investments made to unsuccessful ones.
Most businesses face challenges; they have issues to keep their competitiveness. They tend to lose the position, and they do not support required innovations. The more mature organization is, the less creative ideas it generates. It is a simple rule. Employees live in a comfort zone, and they do not want to implement any changes. Those who provoke others to change usually leave the company to find a better exciting career elsewhere. This is the moment when the leader needs to start thinking strategically again. The organization needs to change.
Strategic Thinking in Human Resources
The HR Management (more on the definition) is a business expertise that aims to build the sustainable competitive advantage. The essential part of the procedure is strategic thinking. The HR leader has to evaluate and assess the status of the HR Management function, procedures and processes critically. No innovation in the HR Management can be introduced without a fair and honest view of the HR Management performance and productivity.
It plays a critical role in the development of the new HR Strategy and major updates of HR Processes and Procedures. It links outputs of preparatory sessions with the development of the new HR vision that drives all significant changes in Human Resources. The HR Planning is a critical user of brainstorming sessions focused on the future of the HR Management in the organization.
The modern and innovative HR Management is the best weapon against competitors. However, the HR Leader needs to choose the right areas to become the competitive advantage. No organization can excel in all HR processes and procedures. It would increase the costs of HR operations dramatically. It is the moment for strategic thinking to be applied. The HR leader needs to identify and choose right areas to invest in.
The innovative HR Management needs to implement competitive solutions that support the global mobility, Big Data, and operational excellence. These topics are closely interlinked which makes the challenge even more complex. A strategic approach and critical thinking help to identify key priorities, interdependencies and the approach for the design and implementation.
Key Principles of Strategic Thinking
Thinking strategically about the state of the business is not the operational agenda of the organization. A dedicated team should receive a brief, and they should return with proposals. They should not mix strategic thinking with the daily operations because it could negatively influence results. A dedicated team should be purely focused on finding causes, exploring options and opportunities, and evaluating them against the brief and effort required to achieve desired outcomes.
Thinking and planning strategically is always based on strong foundations of the research. The team responsible for bringing new ideas to the table needs to talk with employees, conduct the competitive research and analyze new trends in related industries. They have to communicate with customers and ask them what trends they see around them. They should also research social media because they can identify new ideas that were hidden internally.
It always starts with in-the-box thinking; the team has to look at internal processes and procedures. The members of the team have to analyze the internal environment, and they have to identify all gaps and opportunities. Most organizations hide many great ideas because employees are not willing to talk about them. They are afraid of the failure; they do not want to put them at risk.
The team always has to synthesize and refine collected ideas. As the team collects many different proposals that can lead to the improvement at a low cost, it has to invest enough time to propose changes that can be implemented quickly and effortlessly. The team has to find a healthy balance between external and internal proposals and ideas.
The next key principle is the out-of-the-box approach. It follows in-the-box thinking. The team needs to look externally, ask customers and clients. It has to research the market and collect all available data and information. They have to synthesize new ideas based on collected information.
It is always focused on the future, and it does not solve operational issues and challenges. It is a costly procedure because the team has to allocate time that is spent producing new ideas and proposals.
Strategic Thinking Skills and Competencies
Human Resources has to develop strategic thinking skills and competencies in the organization; they are required when the leadership team asks for proposals. The HR leader has to make sure that employees are ready to provide answers, and they can facilitate the brainstorming process. Human Resources has to ensure the organization has skills and capabilities to run brainstorming sessions.
Critical thinking is one of the most crucial skills of strategic thinkers. They listen to all employees, and they do not provide any immediate feedback. They just collect information; they make the proper evaluation and assessment later. They ask the team for the confirmation; they request feedback from other team members. They want to shape the proposed solution, and they want to be sure about all details.