What is Strategy? What is Strategic Thinking? Why Do They Matter?
A typical public-sector or not-for-profit organization might, in principle, undertake many different activities. But further consideration would show that few of these activities actually can be done, and fewer still are ones that should be done.
It's up to organizational leaders to decide what to do and, just as important, what not to do. Some doors must be opened and others closed.
Strategic thinking guides decision-making about what and what not to do. A "strategy" results from examining what an organization wants to accomplish, what is realistically possible for the organization to accomplish, and how the organization expects to get things done.
You can develop a strategy by addressing three questions:
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To which social/economic outcomes do we want to contribute?
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which set of outcomes can we choose to produce the best match between our own vision/values and the needs/wants/expectations of diverse stakeholders?
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How do we expect to contribute to outcomes?
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whom will we serve?
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what benefits will we deliver?
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how will benefits be delivered?
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What resources will be required to deliver the intended benefits?
It will probably be necessary to cycle two or three times through the questions, because each one affects the other two.
For example, after discussion and consultation it may become apparent that the organization lacks resources to deliver all the benefits identified in the second question. This might cause you to reconsider your initial views on what the organization should deliver (second question), or on the outcomes it should pursue (first question).
Or, if consensus developed around the first and second questions is non-negotiable, you may decide to pursue new sources of funding or other (non-financial) resources (third question).
This iterative, looping back and forth between what is hoped for and what is possible -- until an acceptable middle ground is reached -- is an essential element of strategic thinking and strategic planning. Strategy results from focusing on how you want to change the future, while also bearing in mind realities of the present.
(As the great military historian B.H. Liddell-Hart put it, "Strategic principles ... point to the importance of maintaining an object consistently and, also, of pursuing it in a way adapted to circumstances.")
A strategy describes a path (but not detailed steps) by which a public-sector or not-for-profit organization plans to create public value (contribute to outcomes that improve life for its beneficiary population). This is why strategy development is essential to leadership. A sound strategy helps executives navigate conflicting demands and expectations of stakeholders, the constant distractions affecting staff, and the uncertainties of an unstable funding environment.
Specifically, a strategy helps leaders:
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maintain (in the face of urgent demands to address short-term issues) focus on long-term social/economic outcomes;
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rule out projects or areas of focus that are inconsistent with the direction in which the organization has decided to move;
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clarify critical management tasks to advance the strategic agenda; these might include:
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nurturing key sources of political, stakeholder or internal organizational support;
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communicating key messages to stakeholders;
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investing in key elements of organizational capability; and
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generate buy-in within and outside the organization. Within the organization, a clear and compelling strategy sends a message about the kinds of projects and behaviors that will be favorably viewed. Externally, a strategy perceived as well aligned with stakeholder interests helps generate enthusiasm and support.
Final point: producing a formal strategic plan document - though usually necessary - is not an inherently important aspect of strategic management. The document is not an end in itself, nor is it evidence that a viable plan has been created.
Buy-in to the strategic plan and successful implementation are what matter. An elaborately produced planning document that gathers dust is worthless.
For more detailed insights on strategic thinking and strategic planning, see two other papers by Mark Schacter:
- Why You Hate Strategic Planning (and why it doesn't have to be that way)
- Interpreting the Possible. A Guide to Strategic Management in Public Service Organizations
