What Is Strategic Thinking?
Strategic thinking is a simple yet game-changing concept that utilizes rational and critical thought processes to help businesses thrive.
It’s a concept found at the heart of everything that Paul Butler does, one he has used to help non-profits like the YMCA, as well as multi-national conglomerates like Procter & Gamble.
I’ve been a big fan of Paul’s work for several years and have used many of his methods in my own businesses. I was delighted to get the chance to sit down with him and discuss strategic thinking strategies.
Μyths About Strategic Thinking
Before we look at the strategies utilized by Paul and his team, we should clear the air.
There are a lot of myths and misconceptions concerning this practice and these need to be clarified before going any further.
Myth 1: It’s Complicated
The idea that you need to be a strategic genius for this to work is a complete fallacy.
You don’t need to read Sun Tzu. You don’t need to be a tactical mastermind. With the right guidance, anyone can do it.
Myth 2: Strategic Thinking Is The Same As Strategic Planning
Strategic thinking allows you to plan more proactively.
You can sit there and plan for the next 5 years of your life. You can create a detailed outline of every step, but what happens when a spanner is thrown into the works?
As we’ve seen in the last six months, anything can happen, and all the plan Bs in the world can’t prepare you for some of those outcomes.
With strategic planning, you’re preparing for the future and aren’t necessarily equipped to deal with things when they don’t work as expected. With strategic thinking, you’re still preparing, but in a way that ensures you’re always ready to adapt.
Myth 3: You Need A High-Priced Consultant
If you have a big company with an equally large business, there are benefits to hiring someone like Paul when things begin to stagnate. But many of the principles discussed in Paul’s book and in our interview can be applied with minimal experience and on a very small budget.
As tempting as it is to check Fiverr or Upwork for a strategic consultant, it’s always best to go your own way.
No one knows your business better than you do and even if you do hire someone to help, their “help” will likely cost the earth and consist of endless tips and recommendations that you have to implement yourself.
Key Aspects Of Strategic Thinking
Goal setting is one of the key principles of strategic planning and something we discussed at length in our interview.
It’s important to set the right goals and make sure these are realistic and clearly defined.
Paul spoke about running a marathon and joked how his first goal was to not run a marathon. But after spending some time in a running group, they eventually wore him down and convinced him, at which point he set his goals and devoted his training to meet them.
His goals were not diluted with endless promises relating to his training and to the race itself. They were simple: He wanted to finish and he wanted to complete the race within a specific time.
But these goals were not plucked out of the air.
Paul did his research and understood that with the right training and preparation, finishing the race was realistic. From there, he used the data at his disposal and created a realistic time frame, one that would push him to run harder and finish sooner.
In the end, he had a purpose not only to run and eventually finish the race, but to maintain a speed throughout that ensured the best possible result.
This goal-setting is one of the key aspects of strategic planning that we discussed in the interview, but there are other considerations as well.
People make assumptions all the time, and people are stubborn, so they often stick with their assumptions.
When you don’t challenge your assumptions, you accept them as fact and you build your business and your plans around them, even though they could be inherently wrong.
Paul uses an example of the YMCA. He worked with them for a number of years and often uses them as an example in his workshops. He asks, “When you think about the YMCA, who do you think their competitors are?”
One of the most common responses is, “Gyms”, to which he asks whether the YMCA can really compete with a modern gym charging just $10 a month.
It’s unlikely, but that’s because the initial assumption is incorrect and only by challenging that assumption did his students understand that the YMCA is not a gym. The brand is about family, health, and community, and it applies to more than just fitness and well-being classes.
This aspect of strategic thinking is about constantly challenging assumptions, adapting to change, and seeking to learn new things about your business and your customers.
Businesses often fail because they refuse to adapt. They fail because they stick with the same game plan—if it’s worked for them before, why won’t it work again?
You only need to look at the rigidity of companies like Blockbuster, Blackberry, Polaroid, and MySpace to understand why you need to constantly adapt, to constantly challenge your assumptions.
Netflix dominated Blockbuster and countless other media companies because it moved with the times and changed its business model to suit a more stream-focused industry. Facebook beat MySpace because it gave users what they wanted and focused on innovation.
Success is rooted in innovation, not tradition.
Data Doesn’t Lie
Data is key to the growth and success of any modern business—reviews, Google Analytics, Google Ads, competition data. But the data has to come from the right places and be used correctly.
Paul used the CDC as an example. Right now, the CDC provides valuable information concerning the pandemic, which, in turn, impacts businesses nationwide. It’s not just of interest to future historians, hypochondriacs, and immunologists, it’s useful for every single business owner.
For instance, CDC data can help a US business to monitor the spread of the pandemic and speculate on future lockdowns and quarantines, while also anticipating consumer trends.
But just a few months ago, it didn’t mean anything. Unless you were actively involved in the medical sector, there’s a good chance that the CDC didn’t factor into your planning.
This harks back to what I said earlier about constantly adapting, evolving, and challenging assumptions, but it also proves that looking for new and credible sources is key.
In his workshops, Paul often asks what it means to be number 1 in your marketplace and notes how the most common answers revolve around having the highest share of consumers or the best sales figures.
But what is meant by “highest” and “best”, and what assumptions were made on the idea of “number 1”.
Were those assumptions challenged?
Assumptions and data go hand-in-hand, as you can use the latter to clarify the former. In this case, rather than assuming “number 1” and “marketplace” mean something specific, you should be asking for clarification and using data to arrive at your answer.
If it refers to the business with the most turnover, you can use your own sales data and that of your competitors to answer the question. If it refers to the highest number of online reviews or Google rankings, data can also provide a definitive answer.
But what if “number 1” actually concerns customer opinion, brand recognition; what if “marketplace” defines not just your local area, but every company selling similar products worldwide? You can’t quantify that sort of data, which means you can’t realistically answer the question and your assumptions have failed you.
Paul recommends focusing on two things where data is concerned:
- What is happening outside of your business? What are the social media trends, what are your competitors doing, and what kind of data can give you reliable answers to these questions?
- When you have the data, how are you interpreting it, how are others interpreting it, and are you on the same page?
The Vital Few
There is no secret to success, no magic wand or strategy that will guarantee a successful business every time.
However, if you could break down the anatomy of success, looking at the people who have achieved it, you’d find an unwavering devotion to setting and achieving goals.
Setting a goal gives you a purpose, a realistic, workable objective.
It’s like being lost in the desert and wandering aimlessly. If all you can see is a vast and open expanse of scalding sand, you’ll be lost, hopeless—forever trudging. But if you glimpse a river on the horizon, you’ll find the motivation you need to push harder.
You have direction. An incentive.
But it’s important not to have too many goals.
Create a list of the things you want to achieve in your business and condense them down until you have just a few.
It’s the 90/10 rule, as Paul noted in our interview. If you create a to-do list of 30 items, the 90/10 rule will leave you with just 3, the “Vital Few”.
These are the aspects that a company should focus on and they come from asking questions like:
- What do we know?
- Of what we know, what’s most important?
- What makes us unique?
In concluding my interview with Paul, I fielded some questions from our viewers. I also asked him the $100,000 question, and he was glad to provide his priceless insight.
How Can You Deal With Uncertainty?
Getting clarity is important. Paul recounts a story of a pizza boy as an example, noting how a company in Silicon Valley gained clarity into their actions by inviting a pizza boy to sit with them around the conference table.
The pizza boy, in this instance, assumed the role of the average consumer, the layman. If he couldn’t understand the ideas being presented, they needed further clarification.
After all, not only does a business have to think about its customers, it also has to think about employees who don’t necessarily have the experience or knowledge to understand certain concepts.
It’s not just a lack of understanding on their part, either.
If you’ve ever worked as a lower-level employee for a major organization, you can appreciate that ideas are often implemented that don’t make sense to those implementing them. These ideas come from the top, from people who are so far removed from their employees that they can’t see the flaws that are so obvious to everyone else.
Uncertainty, as we’ve experienced during the recent pandemic, can cause pandemonium within a business, leading to rushed decisions, haphazard plans, and initiatives that cause more harm than good.
By seeking clarity at every step and ensuring all levels of the business are involved, these problems can be avoided.
How Can You Begin To Fix A Struggling Business?
Paul recommends asking yourself five simple questions to better understand your business and where it’s going wrong. How you answer these questions will determine your next step:
- What is working? Keep doing it
- What is not working? It needs to change
- What is missing? If we don’t have it in place, we won’t know if it is working or not.
- What are we doing now that’s not adding value? Why are we still doing it?
- What is one thing we can do on the 90/10 that we need to attack now? Let’s do it!
What Is The $100,000 Advice For New Businesses?
Paul’s $100,000 advice is to always do your homework, and to understand your true value.
This goes much further than simply, “This is what I do/sell”. It’s about what you can bring to the table, what you can do as an employee or owner, and how that differs from other people inside and outside your organization.
It’s also important to have a tangible product or service, as opposed to a concept. Paul uses his own business as an example, noting that while some consulting firms will offer a vague concept (we can help with this; we can help with that) he offers a tangible program known as STARS (Strategic Thinking Action Results).
It’s about specificity, tangibility, and comprehension—that’s the key to success.
About Our Guest: Paul Butler
After a successful career in senior management roles in sales/marketing and HR with Pfizer and Procter & Gamble (Gillette), where Paul led large organizations, he founded GlobalEdg, a firm dedicated to providing value to organizations. Working with organizations of all sizes from start-ups to large corporations, he has helped thousands of employees in more than 50 different organizations. There are over 3,000 alumni in his internationally known STAR (Strategic Thinking – Action – Results) program.
Paul is the co-author of Think to Win, Unleashing the Power of Strategic Thinking as well as many articles on strategic leadership. He can also be found interviewing some of the world’s most successful leaders on the Association of Talent Development Leadership Diary Podcast series. A sampling of clients includes Procter & Gamble, PepsiCo, Green Mountain-Keurig, Jamba Juice, Mead-Johnson, Staples, Cardinal Health, Metro AG, Hanes Europe, and Johnson and Johnson. Non-Profit work consists of The Sandy Hook Promise, CECP (the CEO Force for Good), and National Leadership Roundtable on Church Management.
He is the founder of the Career Transition Ministry, a non-denomination group dedicated to helping people in their job search. Paul is also the founder of The HR Leadership Forum, Exclusively for Senior-Level HR Leaders who are professionally dedicated and committed to pushing the boundaries in HR Functional Excellence. He is a board member of Arts Escape and served as an officer of the Society for Sales and Marketing Training. In conjunction with his consulting business, he regularly participates in the public discussion via conferences and published articles.
Paul is an “empty nester” and lives in Connecticut with his wife, Becky. He is an avid runner and a frustrated golfer.