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S U M M E R 2 0 0 7 V O L . 48 N O . 4

Ellen F.Goldman

Strategic

Thinking

At

theTop


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intentionally removed.

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L e a d e r s h i p

Strategic Thinking

At the TopStrategic thinking is generally considered important to a companys per-formance.1 Indeed, some have

advocated for companies to develop the strategic thinking of their executives as a core competency. But how exactly

should organizations accomplish this? Past studies on the subject have been limited, typically focusing on singular

teaching methods, experiences or plan-ning processes.2 As such, the research has yielded little insight into the

broader picture of how individuals tend to acquire expertise in strategic thinking. What types of work experiences,

for example, are more important than others,

and do they need to follow any specific chronology?

To answer these and other questions, I conducted a study that identified executives who were considered

the top strategic thinkers in their industry.3 (See About the Research, p.76.) The study then investigated the

totality of experiences (educational, job related or other) that contributed to the high ability of those

individuals. In addition, the research investigated the different ways in which the executives acquired their

expertise in strategic thinking a process that typically took more than a decade.

The data showed that strategic thinking arises from 10 specific types of experiences for instance,

spearheading a major growth initiative or dealing with a threat to organizational survival. Moreover,

executives appear to gain their expertise in strategic thinking through one of three developmental pat-

terns. These findings help demystify the process by which strategic thinking is learned, offering

important implications for management development and the practice of strategy.

Defining Strategic ThinkingFirst, though, what exactly is strategic thinking? Although numerous books and articles purport to cover the

subject, they typically deal more with strategic planning and strategic management. According to Henry Mintzberg,

the man-agement guru, Many practitioners and theorists have wrongly assumed that strategic planning, strategic

thinking and strategy making are all synonymous, at least in best practice.4 To avoid any confusion, my study used

the following definition: Strategic thinking is a distinctive management activity whose pur-pose is to discover

novel, imaginative strategies which can rewrite the rules of

Ellen F. Goldmanis a visiting assistant professor of human and organizational learningin the Graduate School of

Education and Human Development at George Washington University. She is also the principal of Growth Partners, a

Reston, Virginia-based consul-tancy that specializes in strategic thinking. Comment on this article or contact the

author through [email protected].

Expertise in

strategic thinking is

not the product of

innate ability and

pure serendipity. It

arises from specific

experiences

(personal,

interpersonal,

organizational and

external) which

occur over 10 or

more years.

Ellen F. Goldman


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L e a d e r s h i p

the competitive game; and to envision potential futures signifi-cantly

different from the present.5 Furthermore, strategic thinking was

specified as being conceptual, systems-oriented, directional (linking

the future with the past) and opportunistic.6

A related question is whether strategic thinking is an innate skill

or one that can be acquired. This question is at the heart of every

discussion of individual abilities. But even those leadership theorists

who believe in inherent mental processing capabilities7 note that such

abilities must be enhanced as part of management development. My

study was concerned with identifying the ex-periences that

contributed to the development of expertise in strategic thinking, not

with measuring any levels of cognitive functioning. As such, the

nature-versus-nurture argument was moot to this research.

Interestingly, the study participants volun-teered views that spanned

the nature/nurture spectrum, with

most falling somewhere in the middle. It should be noted, how-

ever, that even the individual with the strongest pronature view

felt that experiences were still necessary to develop a persons

strategic thinking ability. And most participants felt that without

some hard-wiring, learning to think strategically would be more

difficult but not impossible.

Ten Contributing Experiences

The study identified 10 experiences that contributed to the devel-opment

of a persons ability to think strategically, and those experiences

represented four levels of interaction: personal, in-terpersonal,

organizational and external. (See Ten Experiences That Contribute to

the Ability to Think Strategically.) Every ex-ecutive did not benefit

from all 10 experiences, and no two executives had the same set of

experiences. But each individual

About the Research

The goal of this study was to identify how expertise in

strategic thinking develops. Given the complexity of

the process, the research was limited to one industry

healthcare and to only the provider segment

within that industry. A technique known as social

labelingi was used to select the referral sources,

who were ex-perienced healthcare strategy

consultants and leaders of professional

organizations. The sources were then asked to

identify two or three individuals with whom they had

worked and who met the studys specific definition of

an expert strategic thinker.

A pool of 36 potential executives was generated,

from which 10 were ultimately selected to participate.

The individuals were all CEOs and were

representative of the general demographics of U.S.

health-care CEOs with respect to geographic region,

setting of the organization (urban versus suburban),

type of organization (teaching versus community) and

gender (male versus female). The professional work

experience of the participants ranged from 23 to 40

years.

The Seidman phenomenological in-terviewing

techniqueii was utilized to gather data. The process

consisted of three 90-minute interviews with each

participant. The first interview estab-lished the

context for the participants experiences; the second

focused on the reconstruction of their experiences

and their developmental process; and the third

encouraged reflection on the meaning of that

process. The inter-views, which were all audiotaped,

utilized a semistructured protocol, and Seidmans

criteria of sufficient numbers to reflect the range of

participants and saturation of information was

reached at 10 participants.

Based on the comments provided by the

participants, graphic maps of their experiences were

prepared. The figures were used in subsequent

interviews in a manner similar to the way in which

cogni-tive maps are used in research on strategic

decision making: to focus peo-ples attention, trigger

their memory, reveal gaps in information, highlight

key factors related to their experiences and

enhance the understanding and

impor-tance attached to those

experiences.iii The mapping

process also provided the

participants with the opportunity

to work collaboratively with the

researcher during the discovery

process, and it pro-duced a

tangible product that resulted

from the time the participants

invested in the study.

The interviews weretranscribed, and the resulting

15,000 pages of data were

analyzed, first by reducing the

volume of information to what

was most important and

interesting, then by capturing the

es-sence of the entire experience

of becoming an expert strategic

thinker for the different

participants (through the

preparation of individual profiles),

and fi-nally by identifying

thematic connections across all

the data.iv Numerous steps

helped ensure the

trustworthiness of the study,

including researcher epoche, a

prolonged engagement with the

partici-pants, triangulation of

data, member checks, peer

debriefing, peer code check-ing

and the establishment of an

audit-like trail.v

1. J. Shanteau, Psychological Characteristics and Strategies of Expert Decision Makers, Acta Psychologica 68 (September 1988): 203-215; and R.J. Sternberg, Cognitive Conceptions of

Expertise, International Journal of Expert Systems 7, no. 1 (1994): 1-12.


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2. I. Seidman, Interviewing As Qualitative Research: A Guide for Researchers in Education and the Social Sciences, 2nd ed. (New York: Teachers College Press, 1998).

3. C.M. Fiol and A.S. Huff, Maps For Managers: Where Are We? Where Do We Go From Here? Journal of Management Studies 29, no. 3 (May 1992): 267-285.

4. C. Moustakas, Phenomenological Research Methods (Thousand Oak, California: Sage Publications, 1994).

5. Y.S. Lincoln and E.G. Guba, Naturalistic Inquiry (Newbury Park, California: Sage Publications, 1985).

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described at least one experience at

Ten Experiences That Contribute to the Ability to Think Strategicallyeach of the four levels of interaction.

Family Upbringing/EducationFamilyup- Expertise in strategic thinking arises from the contributions of 10 experiences that

bringing and education are grouped can be grouped into four levels of interaction: personal, interpersonal, organiza-

together because the study participants tional and external. Every executive in the research study did not benefit from alldiscussed them interchangeably; the 10 experiences, but each individual reported at least one experience at each of the

four levels of interaction.

two types of experiences typically oc-

curred simultaneously, reinforcing one

another. One aspect noted was the Level of Interaction Experiencevalue of exploring different perspec-

Personal Family Upbringing/Education

tives, for example, through travel andGeneral Work Experiences

exposure to different cultures as well asBecoming a CEO

through debate training and practice of

Interpersonal Being Mentored

the Socratic method.Being Challenged By a Key Colleague

General Work Experiences The partici- Organizational Monitoring Results/Benchmarkingpants cited experience in a variety of Doing Strategic Planning

organizational types and locations, Spearheading a Major Growth Initiative

which provided exposure to numerous External Dealing With a Threat to Organizational Survival

strategic issues and familiarity with a Vicarious Experiencesbreadth of strategies. The most impor-

tant factor here was the responsibilityfor significant projects (for example, implementing the merger

of tions vice president of planning. In general, the interactions

two organizations, evaluating a business for sale or turning around were private and spontaneous, with a wide range in tone from

an organization that was facing bankruptcy) and the freedom to relaxed, informal conversations to highly aggressive, confronta-

make most, if not all, of the decisions related to those initiatives. tional exchanges.

Becoming a CEO This experience is somewhat paradoxical.Many

Monitoring Results/BenchmarkingThe participants cited theim-

boards want individuals who already have expertise in strategic

portance of their involvement in monitoring the operationaland

thinking as their CEOs. But many of the study participants cited market performance of their organizations. Such efforts were

becoming a CEO as important to the development of their stra-

usually extensive and fairly sophisticated. Market data, for

ex-

tegic thinking because, with that promotion, they gained access

ample, were often segmented by geography anddemographics,

to important information (for instance, the views of important with information on purchaser preferences and use, and views ofexternal parties) which enabled a big picture view of their

busi- competitors detailed by the various market segments. Other keyness. [Note: All the individuals that the study identified asexperts data tracked each market segments stated preferences in relation

in strategic thinking were CEOs, even though this attribute was to the actual behavior of those customers.

not a criterion in the selection process.]

Doing Strategic PlanningThe development of strategic thinkingBeing Mentored Many executives have mentors, but not allmen- ability is enhanced by participation in strategic planning proc-

tors help others to develop their strategic thinking. Those who do esses with three characteristics. The first is having planning

are individuals who are in frequent contact with the executive (at sessions with management teams on a regular basis, often month

least once daily), providing immediate feedback. Moreover, their or quarterly. The second is preparation for these sessions, such ainfluence starts early in an executives career, within a few years the required reading of materials that help focus peoples


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of think-that individuals first job, perhaps as a first

boss. ing and provide a sense of the meetings purpose. The third is thformal output of the planning process: often an overall planfol-

Being Challenged By a Key ColleagueColleagues played an impor-lowed by business-unit goals and tactical plans. But even less

tant role by challenging the thinking of the executives. structured output establishing a general direction and im-

Individuals performing this role worked very closely with the mediate next steps, for example can help develop an executivexecutive, for example, as his boss, board chairman or organiza- strategic thinking.

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years with a wide range of frequency: The interaction could occur

monthly for a few hours, quarterly for one day or three days twice

annually. In many cases, the regular contact is enhanced by small group

interactions and social time, for example, a monthly pro-fessional

meeting of CEOs that includes sessions in which people break into

smaller groups (perhaps geared toward specific topics) followed by

dinner with ample time for networking opportuni-ties. The study

participants also noted the benefit of vicarious experiences gained

through indirect means, such as by reading business publications.

Generally speaking, each of the 10 experiences took place over a

significant period of time, often in excess of one year, and re-quired

considerable responsibility on the part of the executive

usually the individual had to perform tasks that were materi-

ally new to him. Some of the experiences catalyzed others, but

they did not occur in any specific order (except for the obvious

categories of family upbringing/education, being mentored,

and becoming a CEO).

In addition to the 10 experiences, the study identified two other

important factors. The first was personal characteristics, specifically,

being methodical, balanced, goal-oriented, curious, receptive to

criticism, detail-oriented, a perfectionist and a mav-erick. The second

was a supportive work environment, including

the presence of a strong management team that frees up

the CEOs time to focus on strategic issues and

contributes to his thinking. Also of impor-tance was the

attitude of the board, particularly regarding failure. As

one executive explained, When you do make a

mistake, theyre worried about fixing the problem, not

fixing the blame. Neither of these factors is sufficient to

develop strategic thinking ability without the requisite experiences described earlier, but they may amplify the

value of those experiences.

Significant AvidAlone Time

Past

ColleaguesinProfessionalOrganizations

Planning NaturalCuriosity

Retreats

Meetings withOther Executives General Work

FathersApproach

to Life

The OverallDevelopmentalProcess

The development of an

executives ability to think

strategically develops gradually

over a considerable amount of

time. Most participants in the

study said they took more than

10 years to acquire their

expertise, and during that time

their confidence grew as they

became more comfortable

dealing with increasing levels

of business complexity and

ambiguity. Interestingly, the

executives described their

development in a manner

consistent with one of three

distinct patterns. The patterns,

In this developmental pattern, expertise in strategic thinking arises from

the culmination of various experiences (small ovals) which provide new

and different perspectives. The experiences occur over years, and eachis fueled by the individuals natural curiosity (large oval). This figure is a

reproduction of the actual map created during interactions with one

executive in the study who best exemplified this particular pattern of

development.

L e a d e r s h i p

Spearheading a Major Growth Initiative These projects

must in-volve significant complexity, be both capital and labor

intensive and require at least a year to complete. Examples include

estab-lishing a new program (developing the business case,

obtaining regulatory approval, overseeing facility construction and

re-cruiting staff), acquiring an organization (identifying,

negotiating with and acclimating the new group) and building a

new facility (that is, overseeing its construction). As with the

category of general work experiences, the freedom to make

important deci-sions makes these projects valuable to the

development of strategic thinking ability.

Dealing With a Threat to Organizational Survival The

types of threats that most contribute to the development of

strategic thinking are those that involve attempts at control by

another entity, which occur repeatedly and that could have a severe

impact on the ex-ecutives organization. Such experiences

typically force a major rethinking of issues that strike at the core of

the individuals in-volved, substantially sharpening their focus.

Vicarious Experiences This category includes interactions

withothers in similar roles, with the frequency of contact being animportant factor. Usually, the contact is maintained for several

Pattern 1: The Development of Understanding


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which can best be understood through

graphic maps that were created with the

participants, provide valu-able insights

into how expertise in strategic

thinking is acquired.

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Pattern 2: The Practice of Rational Planning

In this developmental pattern, expertise in strategic thinking is the result of the executive continually asking the same three

questions (large ovals): Where are we going? How are we getting there? Are we executing efficiently? The arrows denote the flow

of knowledge from the various experiences (small ovals) to the three questions. Note that an experience can provide value to more

than one of the questions. This figure is a reproduction of the actual map created during interactions with one executive in the

study who best exemplified this particular pattern of development.

BossData Benchmarks Mentors

QuestionMonitoring Best

of LegacyPractices Logical

Evaluation ofDesired

AlternativesMetrics Time

Where UseDialogue

Problems/ Going? with Team How GettingComplaints (Vision) Past

There?Successes

(Models) (Strategies)

Community MethodicalViews Sense of

Thinker MistakesGeneral Ownership

Business BetaKnowledge After-the-Fact(Standards) Groups

Critique

Is ExecutionEfficient?

(Implementation)

Pattern 1 The first pattern reflects a repetitive process of usingpast experiences to

consider alternative perspectives. (See Pat-tern 1: The Development of

Understanding.) One executive described the process this way: Theres a solution to

every prob-lem, and if you cant come up with it, you need to look at the problem

from a different angle. The key ingredient here is a natu-ral curiosity that fuels the

executives search for greater understanding, thus expanding his ability to think

strategically. The result: The executive learns to see all sides of an issue and is able to

alter the angle from which he views a problem to search for a better solution. In this

manner through the exploration of different perspectives repeatedly over time

the executive develops expertise in strategic thinking.

Pattern 2 This pattern includes the three major steps of a logical planning process

understanding where you are, determining where you want to be and detailing how

to get there with each step informed by information, experience (both actual and

vi-carious) and discussion. (See Pattern 2: The Practice of Rational Planning.) Key

features include the use of data to fuel thinking

and the repeated application of the three

steps, no matter how big or small the

issue, with expertise in strategic thinking

acquired after years of honing the

practice.

Pattern 3 The final developmental pattern is

portrayed as thetackling of bigger and bigger

business challenges, with the execu-tives

ability to think strategically growing

continuously over time. (See Pattern 3: The

Completion of a Hierarchy of Chal-lenges, p.

80.) Key features include modest initial

activity followed by a step-like progression.

The catalysts to movement can be ei-ther

positive or negative: opportunities to build

new services as well as pressures fromfinancial losses, takeover attempts and other


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challenges to survival. Expertise in thinking strategically is acquired by meeting and

effectively dealing with the challenges, with each experience improving the executives

ability.

The three patterns reflect how executives described the ways in which they learned to

think strategically. They illustrate both what occurred (specifically, the 10 experiences)

and how the ex-ecutives approached those

experiences (namely, by considering different

perspectives, by using a planning model or by

just div-

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L e a d e r s h i p

Pattern 3: The Completion of a Hierarchy of Challenges

In this developmental pattern, expertise

in strategic thinking results from the

executive tackling increasingly difficult

chal-lenges over the course of years.

During this time period, the upward

direction of the red line (from left to

right) indicates the individuals

increasing ability to think strategically,

and the arrows show how the different

experiences (ovals) influence each

other. This figure is a reproduction of

the actual map created dur-ing

interactions with one executive in the

study who best exemplified this

particular pattern of development.

CommunityInvolvement

Political

Exposure

Organizational(Structure)Change

NewBoss

Scenario

EvaluationExecutive

Payment Education

Change

Dialogue with

Doing a External PartiesMaster Plan Trade

OrganizationsEvaluating an Board

General Acquisition Interactions

Being Experience ConsultantsTeam and Questions

Mentored ObservationCommunity

Dialogue

ing in and doing what was needed). The

salient point here is that all the

executives in the study described their

development in a manner that was

consistent with one of the three patterns.

Improving StrategicThinking

The study results have a number of

implications for companies in their

efforts to improve the strategic

thinking of their execu-tives. The

important thing to remember, though,

is that any development program

must be highly individual

because no two people will

absorb the same experience in

exactly the same way.

Nevertheless, some general

guidelines do apply. Experi-ences that contribute most to

the development of strategic

thinking tend to take place

over a year or more and

require significant

responsibility on the part of

the individual usu-ally the

performance of a task that is

materially new to that person.

Moreover, its crucial to

remember that the develop-

ment of expertise in strategic


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thinking takes at least a decade,

during which time many of those

experiences must be continu-ally

repeated. With all this in mind, the

following approaches should benefit

companies in their efforts to develop

the stra-tegic thinking of their

managers.

Include Strategic Thinking As a

Formal Component of

Management Development

Programs One of the most remarkable

findings of the

study was the tacit expectationthat an executive would, all of a

sudden, think strategically upon

becoming a CEO. But, clearly, if

companies want expertise in

strategic thinking they must take

the necessary steps to nurture this

ability. Management development

programs should identify specific

experiences (spearheading a

growth initiative, for instance)

and target their inclusion in the

careers of high-potential

executives. Although individual

in na-ture, such experiences

should, taken together, cross all

four levels of interaction:

personal, interpersonal,

organizational and envi-

ronmental. Moreover, each

experience should contain the

necessary attributes (being

mentored, for example, must

include frequent contact andimmediate feedback). Finally, the

experi-ences should be preceded

by a briefing on strategy theory

and vocabulary (if needed) to

ensure that the executive

understands key concepts that

will help him obtain the

maximum benefits from those

experiences.

Require Executives to

Develop the Strategic

Thinking of Their Sub-

ordinates Because strategic

thinking develops gradually over a

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long period of time, and because general work experiences and

being mentored are two important experiences during this growth,

superiors are in a key position to influence their sub-ordinates

development. As such, companies should include this

responsibility as a part of an executives performance re-view:

What projects and roles have you given your subordinates to

develop their strategic thinking? Are these assignments of

sufficient size, and have your subordinates been given the requi-

site freedom to act? And have your efforts resulted in noticeable

improvements in their strategic thinking, however subjectively

determined?

Encourage Early Participation in Strategic Planning and Benchmarking

Activities These two experiences contribute significantly to im-

portant procedural knowledge related to strategic thinking. Without this

knowledge, executives can waste considerable time by attempting

strategy development or implementation in inef-ficient or inappropriate

ways. Of course, companies will find it impractical for all their managers

to be involved in every strategic planning activity. Nevertheless,

executives can also be encouraged to participate in strategic planning

with other organizations, for example, with subsidiaries, professional

associations, community groups or small, local businesses.

Support Activities That Incorporate Experiential Learning

Interest-ingly, with respect to the development of strategic thinking, the

study participants attributed little value to graduate professional

programs. Thus, when managers do undertake such programs, the

curriculum should incorporate experience in addition to the teaching of

theory, for example, through the inclusion of oppor-tunities to do

strategic planning and benchmarking, discussion of vicarious experiences(perhaps by having experts mentor nov-ices) and assignments that

broaden an individuals perspective through observation, dialogue and

debate.

Maximize the Benefits of Strategic Planning Sessions

Companiesshould hold strategic planning sessions on a regular basis

(monthly or quarterly, for example), and those meetings should have

a high degree of process regularity, with an emphasis on preparation:

reviewing materials and thinking about specific questions that are

provided in advance. In addition, the meet-ings should include

content that expands peoples perspectives (for example, comparative

market information from another industry or the viewpoint of a

constituency that is seldom heard). During these sessions, the

company should ensure that the participants (not the planning staff or

outside consultants) perform the information synthesis and

interpretation. After all, the firm wants to develop the strategic

thinking of the partici-pants and not necessarily that of the staff or

consultants. Staff members could, however, provide valuable input

into manage-

ment development plans, because they might be able to identify

specific aspects of strategic thinking that are lacking in indi-

vidual executives.

business schools and others interested in management

education and development have vigorously debated how best to

teach strategy to future leaders. Some experts have ques-tioned

whether the topic should be taught at all or at least whether it

should be taught to managers. Often missing from the debate

however, has been any in-depth discussion of how individualslearn to think strategically in the first place. What specific

experiences are important and how do they contribute? Moreover

what are the different ways in which people absorb those

experiences to develop the ability to think strategically? Without

adequate answers to these questions, its no wonder that schools

have had trouble teaching strategy to students and that many

companies have difficulty developing the strategic thinking of

their executives.

REFERENCES

1. J. Mason, Developing Strategic Thinking, Long RangePlanning 19, no. 3 (June 1986): 72-80; N.B. Zabriskie and A.B.

Huellmantel, Develop-ing Strategic Thinking in Senior

Management, Long Range Planning 24, no. 6 (December

1991): 25-32; I. Bonn, Developing Strategic Thinking As a Core

Competency, Management Decision 39, no. 1 (2001): 63-71;

and E. Essery, Reflecting On Leadership, Works Management

55, no. 7 (2002): 54-57.

2. M. Easterby-Smith and J. Davies, Developing Strategic

Thinking, Long Range Planning 16, no. 4 (August 1983): 39-48

D.L. Bates and J.E. Dillard, Generating Strategic Thinking

Through Multi-Level Teams, Long Range Planning 26, no. 5

(October 1993): 103-110; and P.M. Senge, Mental Models,

Planning Review 20, no. 2 (March/April 1992): 4-10, 44.

3. E.F. Goldman, Becoming an Expert Strategic Thinker: The

Learning Journey of Healthcare CEOs (Ph.D. diss., George

Washington Univer-sity Graduate School of Education and Human

Development, 2005), Dissertation Abstracts International UMI No.

3181551.

4. H. Mintzberg, The Fall and Rise of Strategic Planning, Harvard

Busi-ness Review 72, no. 1 (January 1994): 107-114.

5. L. Heracleous, Strategic Thinking or Strategic Planning?

Long Range Planning 31, no. 3 (June 1998): 481-486.

6. H. Mintzberg, Patterns in Strategy Formation, Managemen

Science 24, no. 9 (May 1978): 934-948; P. Hanford, Developing

Director and Ex-ecutive Competencies in Strategic Thinking, in B

Garratt (ed.)Developing Strategic Thought: Rediscovering the Art of Direction-

Giving (London: McGraw-Hill, 1995): 157-186; and J.M. Liedtka,

Strategic Thinking: Can It Be Taught? Long Range Planning 31, no. 1

(February 1998): 120-129.

7. E. Jacques and S.D. Clement, Executive Leadership: A

Practical Guide to Managing Complexity (Arlington, Virginia:

Cason Hall & Co., 1991).

Reprint 48418.

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