Strategic thinking: A habit that pays dividends
Strategic thinking means asking yourself the short
and long-term effects of every major business decision
you make. Strategic thinking is a habit.
The value of strategic thinking was brought to
light for me during my time with the United Recyclers
Group, a limited partnership of 300+ auto recyclers
that I helped create to pool resources and address
industry issues. Most of the other managers in
the group said they learned more about strategic
thinking from the exchange of ideas at our meetings
than they had in years of making decisions as owners
Being involved in a well run industry association
is a great way to develop strategic thinking skills
because of the kinds of questions that associations
consider. The seasoned business owners that started
the URG might have been too busy with their day-to-day
operations to delve as deeply into the big picture
issues facing our industry as they did had they
not come together at association meetings. The
involvement forced them to think strategically.
The same was true for me. Hearing from counterparts
forced me to think more deeply about long-term
issues facing our businesses and the industry.
I have a rule for weighing the upside gain against
the downside risk. First, I define the goal of
any decision or action I am considering. If it
isn’t definable, then going with the decision or
action probably isn’t worth the effort or risk.
What’s the real upside? What’s the downside? The
decision, if you pause to ask yourself these questions,
is usually easier than it appears to be.
What happens after the decision is made is critical.
I make a habit of measuring results in the key
facets of my operations. How did the decision I
made affect results? Weighing decisions and measuring
results is a good business habit.
For example, what’s the consequence of refusing
to accept credit cards because a customer passed
a stolen card on you? Some customers won’t be able
to buy from you. What’s that cost you? You might
be losing more by not accepting cards. Look at
the big picture, not just one bad transaction.
In another typical scenario, what would result
from your hiring a relative or in-law? Suppose
this person does not have the skills but needs
a job. You want to help. What will the consequence
be? Can you afford the time to train her? What
will be the consequence? Does she show willingness
and desire to learn? What will be the consequence?
These are the kinds of questions you need to ask
yourself until the asking becomes second nature
and you have become a truly strategic thinker.