Strategic thinking: What is it? How to evaluate it in a candidate? How to inspire future leaders to think strategically?

In the first months of the corona crisis in 2020, we conducted a survey among managers and entrepreneurs and examined what they think is the top3 competencies that they consider critical for key employees in their organization. By far, strategic thinking turned out to be the winner. Even today (and indeed at the beginning of the 2008 financial crisis), when there is a lot of uncertainty and uncertainty about the future in the economy, we hear similar signals here and there. Expectations are understandable: the ability to think strategically is a powerful tool with such significant weight in decision-making, problem solving, innovation activities, etc. What is meant when talking about strategic thinking?

In order to simplify things and not to delve into overly complex theoretical concepts, let’s just say that strategic thinking is a way of thinking (and process) based on rationality, which focuses on the analysis of critical factors and variables that influence the long-term success of business, team and individual. Strategic thinking involves careful and conscious mapping and consideration of risks that could affect the opportunities that are to be realized. At the end of the day, strategic thinking should lead to the emergence of a clear set of objectives, plans and ideas needed to cope with a competitive and changing environment. In business, such thinking should take into account the competitive situation, market trends, the economic situation and the resources of the company. Strategic thinkers are able to balance sticking to the plans drawn up and being open to new opportunities and making changes to those plans in changed circumstances.

For clarity, let´s distinguish between strategic thinking and strategic planning and focus on the former. I would treat strategic planning as a set of methods and actions that help plan the achievement of goals at the organizational level (and reach the organization’s strategy), and strategic thinking as a way of thinking as such.

Strategic thinking actually relies on a whole range of sub-skills: the ability to gather information and see the big picture, analytical (including critical) thinking, innovation, problem-solving skills. At the same time, communication skills, decision-making and leadership skills, for example, are important if an employee wants to demonstrate strategic thinking in an organization. The opposite of strategic thinking is instinctive, impulsive thinking and making quick intuitive decisions. In the process, there is a risk of jumping quickly to answers before one can think about whether the questions themselves are correct.

Also at the employee level, strategic thinking helps to be better in his role and send a signal to management that he is ready to have control over larger resources. In fact, it is also a valuable skill in life in general, in relationships, in sports, in planning your career and future, and beyond.

What could suggest that a candidate can think strategically?

In Estonia, it is popular to use mental aptitude testing in personnel competitions, especially when assessing the suitability of key employees. Mental aptitude refers primarily to the cleverness of the person assessed, which is strongly related to all kinds of competencies related to thinking. It is generally an effective tool for assessing leadership potential and maps a significant part of the potential spectrum. At the same time, mental aptitude tests have been accused of being well defined as the problems to be solved. In real life, however, problems often have to be defined, prioritized beforehand, and only then can one begin to work on solving them. As my late management theory lecturer, Professor Harry Roots, said: in addition to doing things right, you also have to deal with the right things.

Strategic thinking is influenced not only by cleverness, but also by certain personality traits. At the same time, the skill is still developable to a certain extent. So how to evaluate strategic thinking in a candidate anyway, if there is no time, competence, budget to do it in a focused way? What could be quick handy tools for a recruiter to map out this important competence (albeit superficially)?

During the assessment process, the candidate may be asked to solve a problem. Give him some time to come up with a solution and then introduce it. Ask the candidate to explain step by step how he or she came to the solution. The problem to be solved could be unexpected in nature, so that one would not be able to prepare for it before the interview and somehow relate to the position and field to which the application is made.

Top management candidates can be given a deliberately skewed strategic plan (which would be related to the field) or talk about a strategy that didn’t work well and see what solutions they come up with, what they point out, and what questions they ask you.

One can also ask about the goals that he could not achieve and why: has he retrospectively analyzed the situation and identified the reasons why the result did not materialize?

Also observe the use of words in the interview: some may not identify themselves as strategic thinkers, but if they use expressions such as “data-driven decision-making”, “strategic goals”, “cross-sectoral”, “multi-year plan”, “connecting the dots”, “forward-looking thinking”, then it may be inherent in him to approach problems strategically. It is also a good sign if a candidate introduces a customer focus into their answers.

It is also important to note what questions the candidate asks you at the interview: how does the role I am applying for contribute to the implementation of the strategy and plans? Can a strategy be influenced in this role? Especially good are the candidate’s questions about your company’s business, which make the interviewer himself admit that wow, this was a good question. Observe how the candidate approaches planning; whether, for example, considers different alternatives, identifies risks, etc.

In the case of candidates for the position of manager, red marks shall appear when:

• The candidate has struggled to decide and take responsibility
• The candidate does not have leadership skills: in addition to setting goals and planning activities, it is also necessary to bring things to life
• The candidate’s answers are quick and superficial: is he able to switch himself in situations that require strategic thinking?
• The candidate has struggled to adapt to the changed circumstances

How to encourage future leaders to think strategically in an organization?

Future leaders are encouraged to think strategically about the possibility of encountering key roles in an organization. Ability to analyze problems, look for patterns and synthesize solutions from different sets of information.  There is a culture that supports curiosity on the part of the organization. In larger companies, future managers are offered job rotation, cross-sectoral project management, job shadowing, one-on-one conversations, and collaborative projects with top management.

In large companies, it is also necessary to demonstrate strategic thinking. Here, then, the future manager should take on the role of a salesman, marketer and evangelist of change. He challenges the status quo,  offers his own solutions, engages others and looks for ways to implement solutions, thus attracting the attention of top management.