Sunday, February 13, 2005

Is there a difference between strategic thinking and strategic planning?

Is there a difference between strategic thinking and strategic planning? And if there is, what is the difference? I found an article that does an excellent job of exploring the question. The article is entitled “Strategic Thinking: A Discussion Paper” by Eton Lawrence of the Public Service Commission of Canada. The answer to the question – there is a difference and at the same time, the two processes are closely connected. You have to read this article because it is so good! It brings into this discussion of strategic thinking and planning, related themes of systems thinking, organizational learning and strategy development. According to the article, the purpose of strategic thinking is to discover novel, imaginative strategies which can rewrite the rules of the competitive game and to envision potential futures significantly different from the present. The purpose of strategic planning is to operationalize the strategies developed through strategic thinking and to support the strategic planning process. Strategic thinking and planning are then two sides of the strategic management coin.

The article also challenges some of the traditional notions of strategic planning. For example, organizations are usually counseled to find a fit between their mission, external opportunities and their core competencies. This advice makes usually makes great sense. However, there is a danger: we can run the risk of doing strategic planning that is not really "strategic". The traditional advice can result in the organization missing or passing up innovative courses of action. This appraoch can result in the decision to essentially remain the same organization doing a few new things or doing the same things a little differently. The article suggests that strategic thinking can sometimes (and should) disrupt alignment, leading to a vision or preferred future that is not a match for the organization’s current core competencies and yet it’s the compelling vision that the organization will choose to pursue. Strategic planning can then recreate a new alignment by helping the organization figure out how to build the required new core competencies or finding new partners that already possess them. Quoting from Hamel and Prahalad, Lawrence States “whereas the traditional view of strategy focuses on the degree of fit between existing resources and current opportunities, strategic intent (strategic thinking) creates an extreme misfit between resources and ambitions.” The article also provides important insights about why it is vital to involve lots of people in the strategic thinking and planning process. Finally, the article challenges organizations to understand their work as occurring within larger systems. For example a nonprofit working on job creation for residents of a low income urban neighborhood would need to consider ways to link their efforts to regional economic development efforts.

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