HBR Guide to Thinking Strategically (Book Summary)

HBR Guide to Thinking Strategically (HBR Guide Series) by Harvard Business Review

INTRODUCTION Why Everyone Needs to Think Strategically

Strategic thinking is about analyzing opportunities and problems from a broad perspective and understanding the potential impact your actions might have on the future of your organization, your team, or your bottom line.
You gather complex, sometimes ambiguous data and interpret it, and you use the insights you’ve gained to make smart choices and select appropriate courses of action.
Individuals who think strategically demonstrate specific personal traits, behaviors, and attitudes, some of which can seem to conflict. These attributes include:
- Curiosity.
- Consistency.
- Agility.
- Future focus.
- Outward focus.
- Openness.
- Breadth. You continually work to broaden your knowledge and experience so you can see connections and patterns across seemingly unrelated fields of knowledge.
- Questioning. You constantly ask yourself if you should be doing what you’re doing — whether your team is focused on the right things, if there is something you can stop doing, if you should change your approach, and how what you are doing is creating value.
We recommend six key elements for putting strategic thinking into action:
- Understand your organization’s overarching strategic objectives.
- Keep a big-picture perspective.
- Make decisions with the organization in mind.
- Set strategic priorities and manage trade-offs.
- Align your team around organizational goals.
- Move beyond strategy and start to execute.

SECTION ONE Get Started: Be Strategic in Your Daily Work

CHAPTER 1 Strategic Leadership: The Essential Skills

six skills that, when mastered and used in concert, allow leaders to think strategically and navigate the unknown effectively: the abilities to anticipate, challenge, interpret, decide, align, and learn.
Do you have the right networks to help you see opportunities before competitors do? Are you comfortable challenging your own and others’ assumptions? Can you get a diverse group to buy in to a common vision? Do you learn from mistakes?
Anticipate
Strategic leaders are constantly vigilant, honing their ability to anticipate by scanning the environment for signals of change.
To improve your ability to anticipate:
- Talk to your customers, suppliers, and other partners to understand their challenges.
- Conduct market research and business simulations to understand competitors’ perspectives, gauge their likely reactions to new initiatives or products, and predict potential disruptive offerings.
- List customers you have lost recently and try to figure out why.
- Attend conferences and events in other industries or functions.
Strategic thinkers question the status quo.
To improve your ability to challenge:
- Focus on the root causes of a problem rather than the symptoms.
- Apply the “five whys” of Sakichi Toyoda, Toyota’s founder. (“Product returns increased 5% this month.” “Why?” “Because the product intermittently malfunctions.” “Why?” And so on.)
- List long-standing assumptions about an aspect of your business (“High switching costs prevent our customers from defecting”) and ask a diverse group if they hold true.
To improve your ability to interpret:
- When analyzing ambiguous data, list at least three possible explanations for what you’re observing and invite perspectives from diverse stakeholders.
- Force yourself to zoom in on the details and out to see the big picture.
- Actively look for missing information and evidence that disconfirms your hypothesis.
- Supplement observation with quantitative analysis.
To improve your ability to decide:
- Reframe binary decisions by explicitly asking your team,” What other options do we have?”
- Divide big decisions into pieces to understand component parts and better see unintended consequences.
- Tailor your decision criteria to long-term versus short-term projects.
- Consider pilots or experiments instead of big bets and make staged commitments.
To improve your ability to align:
- Communicate early and often to combat the two most common complaints in organizations:” No one ever asked me” and” No one ever told me.”
- Identify key internal and external stakeholders, mapping their positions on your initiative and pinpointing any misalignment of interests. Look for hidden agendas and coalitions.
- Reach out to resisters directly to understand their concerns and then address them.
To improve your ability to learn:
- Institute after-action reviews, document lessons learned from major decisions or milestones.
- Create a culture in which inquiry is valued and mistakes are viewed as learning opportunities.

CHAPTER 2 To Be Strategic, Balance Agility and Consistency

For managers, it’s wise to find a strong “number two” who can check your worst impulses and enhance your strengths.

CHAPTER 3 Prove You’re Ready for the Next Level by Showing Off Your Strategic Thinking Skills

It requires you gain exposure to strategic roles, synthesize broad information, participate in a culture of curiosity, and gather experiences that allow you to identify patterns and connect the dots in novel ways.
Demonstrating strategic thinking requires that you are simultaneously a marketer, a salesperson, and a change agent.
By better understanding trends within the function, the company, the industry, or the macro environment, and asking, “How might this impact my function or organization?”
Block out 30 minutes on your calendar before important meetings.
To display strategic thinking, you must synthesize disparate thoughts into a point of view and a vision that your bosses can see.
Shift your contributions in senior executive meetings from operational input to strategic input.
Package your ideas into a vision for the organization and engaged your peers in new discussions about how the vision could impact their areas.
Demonstrating that you think strategically about hiring and talent development is a surefire way to make your leaders notice you.
Show that you can initiate innovation and bring strategic change
Demonstrate that you can use your knowledge to put new ideas into action.

SECTION TWO Understand Your Organization’s Strategy

CHAPTER 4 Understanding Your Organization’s Strategy

Ask where the biggest risks are

CHAPTER 5 Strategy Isn’t What You Say, It’s What You Do

A company’s strategy is what the company’s people are actually doing, not the slogan their bosses articulate.

CHAPTER 6 Building a Strategic Network

You need not one but three networks: operational, developmental, and strategic.
People in other units of the company, and outside, on whom and on whose work you rely on do your work. This is your operational network.
Your developmental network is the collection of individuals whom you trust and to whom you can turn for a sympathetic ear, advice (depending on their experience), and a place to discuss and explore professional options
A strategic network is about tomorrow. It comprises those who can help you do two critical tasks:
- Define what the future will bring
- Prepare for and succeed in that future.
Your strategic network consists of outposts — individuals who work on the horizon of your world and can see into worlds beyond, both inside and outside your organization. Your links to these outposts will mostly be what sociologists call “weak ties.”

SECTION THREE Develop a Big – Picture Perspective

CHAPTER 7 Spotting Trends and Patterns That Affect Your Business

Start by paying attention to the internal signals within your company that may give rise to opportunities or challenges right under your nose.
Understanding root cause can help you find a solution to the problem you’re facing or a better path forward if change requires it.
In exploring root causes, you will also need to consider external forces affecting your business.
Discuss the implications of trends.
Combine trends and build multiple scenarios for the future.
Meaningful insights often arise when we combine different trends and then ask the question, “What would happen if…?”
Our assumptions and unconscious biases may cloud our objectivity, which can cause us to see a trend that we want to see, rather than what is actually there.

CHAPTER 8 Look at Your Company from the Outside In

Effective leaders listen. They observe. And they translate what they learn into strategy.
Interview potential stakeholders, too. That includes customers and others who are currently dealing with your competitors — but also those who interact with neither you nor your rivals.

CHAPTER 9 Thinking Long-Term in a Short-Term Economy

Make sure that you have a dynamic, constantly refreshed strategic “vision” for what your organization (or unit) will look like and achieve three to five years from now. I’m not talking about a strategic plan, but rather a compelling picture of market / product, financial, operational, and organizational shifts over the next few years.
Long-term value, however, is not created in straight lines.

CHAPTER 10 The Future Is Scary. Creative Thinking Can Help

Do three things.
- Understand How People Think
- Question Your Organization’s Fundamental Beliefs
- Use “Prospective Thinking” to Consider Key Trends and Disruptions
Megatrends — large social, economic, political, environmental, or technological changes likely to have major impact across a wide range of areas

CHAPTER 11 Zoom In, Zoom Out

Zooming In: Close-in managers look for immediate benefits and make ad hoc decisions. They often favor one-on-one conversations over group meetings. They want to address details by doing whatever occurs to them.
The best leaders work the zoom button in both directions.

SECTION FOUR Align Decisions with Strategic Objectives

CHAPTER 12 Reflect on Your Actions and Choices

Being more strategic requires only that you put even the smallest decisions in the context of the organization’s broader goals.
Strategic people create connections between ideas, plans, and people that others fail to see.

CHAPTER 13 Seven Steps for Making Faster, Better Decisions

Each time you face a decision, use these steps as a tool to counteract your biases:
- Write down five preexisting company goals or priorities that will be impacted by the decision.
- Write down at least three, but ideally four or more, realistic alternatives.
- Write down the most important information you are missing
- Write down the impact your decision will have one year in the future.
- Involve a team of at least two but no more than six stakeholders.
- Write down what was decided, as well as why and how much the team supports the decision.
- Schedule a decision follow-up in one to two months.

CHAPTER 14 How to Make Better Decisions with Less Data

We recommend the” data DIET” approach, which provides four steps of intentional thought to help convert data into knowledge and wisdom.
- Step 1: Define – How do you understand the problem? What are its causes? What assumptions does your team have? Write about the problem (without proposing solutions) from different perspectives — the customer, the supplier, and the competitor, for example — to see the situation in new ways. Ask yourself a simple question: If I collect the data, then how would my decision change? If the data won’t change your decision, you don’t need to track down the additional information.
- Step 2: Integrate
- Step 3: Explore
- Step 4: Test – People under-collect disconfirming data.

SECTION FIVE Set Priorities and Manage Trade – Offs

CHAPTER 15 A Better Way to Set Strategic Priorities

A better way to establish priorities is to put rank ordering aside and return to first principles.
There are three interdependent variables that are essential for executing any initiative: objectives, resources, and timing.

CHAPTER 16 How to Prioritize When Your Manager Is Hands-Off

Don’t assume that prioritizing your workload is someone else’s job
Consider your role today and answer the following questions:
- What is my highest contribution?
- What am I passionate about?
If you don’t prioritize your time, someone else will.

CHAPTER 17 Identify and Kill Outdated Objectives

In his book The Three-Box Solution, Tuck School of Business professor Vijay Govindarajan introduces three “boxes” for allocating an organization’s time, energy, and resources:
- Box 1: Manage the present by optimizing core businesses.
- Box 2: Forget the past by letting go of the values and practices that have lost relevance.
- Box 3: Create the future by inventing a new business model.
Create a process for winnowing large, medium, and small projects
Changing projects or processes that affect companywide strategic objectives instead requires a top-down approach.

CHAPTER 18 What to Do When Strategic Goals Conflict

The goals that emerge from your strategy should not be implemented piecemeal, but instead need to be considered holistically, as part of an overall execution strategy.

CHAPTER 19 Assess and Manage Trade-Offs

Think through the potential short-and long-term impacts of potential courses of action.

SECTION SIX Align Your Team Around Strategic Goals

CHAPTER 20 To Be a Strategic Leader, Ask the Right Questions

Strategy succeeds or fails based on how well leaders at every level of an organization integrate strategic thinking into day-to-day operations.
Make these five questions part of your ongoing dialogue,
- What Are We Doing Today?
- Why Are We Doing the Work We’re Doing? Why Now?
- How Does What We’re Doing Today Align with the Bigger Picture?
- What Does Success Look Like for Our Team?
- What Else Could We Do to Achieve More, Better, Faster?

CHAPTER 21 An Exercise to Get Your Team Thinking Differently About the Future