[Originally published in Harvard Business Review.]
In its simplest form, strategic thinking is about deciding on which opportunities to focus your time, people, and money, and which opportunities to starve. One of history’s greatest strategic thinkers, Napoleon Bonaparte summed it up this way: “In order to concentrate superior strength in one place, economy of force must be exercised in other places.” If dead, despotic French emperors are not really your style, Michael Porter said it like this:
“The essence of strategy is choosing what not to do.”
At the highest level, this usually means deciding to sell off one company in order to buy another one. More often it simply means deciding to move some initiatives to the back burner in order to concentrate the bulk of your resources in a single key area.
Sounds simple enough. Yet, three pervasive myths continue to make strategic thinking an elusive skill set in today’s organizations.
Myth 1: Productivity is the goal.
Productivity is about getting things done. Strategic thinking is about getting the right things done well. The corollary of that truth is that strategy requires leaving some things undone, which stirs up a potent cocktail of unpleasant emotions. When you leave projects undone or only half-completed, you must sacrifice that feeling of confidence and control that comes from pursuing a concrete goal. You will have to fight through the universal psychological phenomenon of loss aversion that results from saying goodbye to a cherished project in which you have already poured heaps of time and money. You will also have to deal with the social pain and feelings of rejection that come from telling some people on your team that their big idea or entire functional area has been demoted in favor of something else more valuable.In the face of all that unpleasantness, it is tempting to continue striving for productivity. After all, what’s wrong with being productive?
The problem is that productivity is strategically agnostic. Producing volume is not the same as pursuing excellence. Without a strategy, productivity is meaningless. As Peter Drucker famously said: “There is nothing quite so useless as doing efficiently that which should not be done at all.” So the next challenge is figuring out which things are the right things.
Myth 2: The leader’s job is to identify what’s “important.”
Here’s a quick exercise: Make a list of every project and initiative your team is working on right now. When you finish the list, draw a line through all of the things that are not important.
If you’re like 99% of teams, not one project on your list will get crossed out. That’s because every project your team is working on is “important” to someone somewhere somehow. They all “add value” in some vague way. That’s why debating about what’s important is futile. Strategic thinkers must decide where to focus, not merely what’s “important.” Strategic leaders must consciously table some “important” projects or ignore some “important” opportunities.
While productive teams log overtime hours in order to knock out one important project after another on a first come, first serve basis, strategic teams decide which projects will contribute most to the declared strategy of the organization, and put the rest of the “important” projects on hold.
Myth 3: Strategic thinking is only about thinking.
Strategic leadership is not a math problem or a thought experiment. Ultimately, strategic thoughts must yield strategic action. Thorough cost/benefit analyses replete with mesmerizing forecasts, tantalizing linear trends, and 63-tab spreadsheets beautiful enough to make a newly minted MBA weep with joy are utterly useless without an actionable decision. In spite of the uncertainty, complexity, and the ever-present possibility of failure, a strategic leader must eventually step up and make the call about what the team will and will NOT focus on.
Tipping his bicorne cap to this truth, Napoleon once said, “Nothing is more difficult, and therefore more precious, than to be able to decide.” Perhaps that’s also why this precious ability to decide is the defining feature of those deemed worthy to hold the highest leadership positions.