5 Reasons Strategic Thinking is Key to Business Success

Strategic thinking involves the use of a repeatable process for analyzing a problem to develop a list of viable options. Startups engage in this process when developing their business plan. You may use a SWOT analysis (strengths, weaknesses, opportunities, and threats) to evaluate options. Or, you might use a one-page business plan to capture your strategies and goals. Either way, this is strategic thinking. Many companies continue this practice in an annual review and updating of their strategy documents, often at the end of the year.

The problem is that once the business and strategic plans are written they get put on a shelf to collect dust. If it was such a valuable exercise why do it only at the start of your business, or once a year?

90% of Startups Fail

That’s a pretty sobering statistic. Failing to consistently use strategic thinking is a primary reason for this. 90% of business owners failed to develop and execute a strategy to ensure their business success. Don’t let yourself be part of that statistic.

Overcoming resource limitations

Lack of resources is one of the top excuses for business failure. Insufficient funds, lack of talent, inability to hire…the list goes on. Strategic thinking enables you to brainstorm options for using your limited resources most effectively.

What if you change the schedule, re-assign resources, or develop entirely new capabilities?

Strategic thinking helps you see options and opportunities you couldn’t otherwise imagine. It helps you avoid costly mistakes, such as hiring senior staff too soon, and expanding before the market supports it.

Unpredictable Market

The uncertainty of risk is a constant. Strategic thinking allows you to continually evaluate this changing landscape and prepare. Economic changes affect your business financially, often in unexpected ways. You need to be prepared and have an alternative plan. This risk is not just negative, risk can also positive. If you can leverage the change you open up new markets and opportunities. Competitors that don’t think strategically will falter.

Agile companies understand the value of strategic thinking, and the ability to pivot. They employ strategic thinking for every business problem. Strategic thinking becomes a culture for navigating change and having strategies in place to mitigate or leverage. Companies that can react quickly have a much higher success rate.

Beating Your Competition

Running a business is like playing a game, each move brings you one step close to success or failure. Like every successful sports figure or champion chess player, winners are constantly measuring and refining their efforts, developing new strategies to achieve more, be better, and be faster.

Strategic thinkers plan their defense as well as attacks. They maintain their state of readiness and are constantly re-evaluating their options. For you, that means product improvement, service levels, messaging, staffing, and more.

Growing Your Business

As startups, it’s all about growth. Growth means revenue, hiring staff, and the ability to improve services and expand into new markets. Growth is a measure of success. Strategic thinking encourages and supports continued growth.

Growth requires the ability to embrace change and uncertainty.

Better Decisions

Business owners and managers that use strategic thinking make better decisions. They build their capability to analyze, evaluate, and differentiate between options. Over time, this ability improves. As you make better business decisions the company grows, revenue increases and market shares expand.

Strategic thinkers become good at forecasting their competition’s reactions. They view their business through the eyes of their clients. They generate strategies that allow them to do more with less and expand their communications both inside the business as well as with their clients. Strategic thinking gives them confidence in their decisions.

CISO Strategy