Thinking strategically means looking past the obvious read of an event to the situation behind it, then deciding what to do while acting is still cheap. For most leaders, the harder part is making room for that while urgent work fills the day.
Fourteen years after I saw the threat, our competitor bought what was left of our business.
It started in 2012 with a deal that looked ordinary. A competitor signed with a mainstream manufacturer, and most of the room filed it as a lost contract. Learning how to think strategically starts with refusing that first read.
That year I’d come across a question in Richard Rumelt’s Good Strategy/Bad Strategy. What’s going on here? Asked of that deal, it showed me something far bigger than one contract.
The obvious read of a competitor’s move is rarely the whole one. The harder part is acting on the rest while urgent work keeps your head down.
By the end of this article, you’ll know how to ask what’s really going on, and how to protect the time to act on the answer before the urgent work decides for you.
What Does It Mean to Think Strategically?
Thinking strategically means seeing the situation behind the obvious one, then connecting what you do today to where that situation is heading.
Most definitions stop at the big picture. The big picture only earns its keep when it changes what you do on Monday. That connection is what separates strategic thinking from the rest of critical thinking: it points your judgement at the future.
In game theory, thinking strategically means anticipating a rival’s next move. That’s a fair place to start, because in 2012 our rival had just made one and we were reading it at face value.
Face value is where most strategic mistakes begin. A competitor’s deal or a client’s new buying process arrives looking like an event. Strategic thinking treats it as evidence of a direction.
Strategic thinking starts by asking what an event is evidence of.
Read as an event, the 2012 deal cost us one contract. Read as evidence, it told us a competitor was buying a credibility we’d assumed was ours.
Why Do Capable Leaders Stop Thinking Strategically?
In 2012, our attention was already spoken for.
We were in the middle of replacing our ERP system, a project with its own lesson in what happens when you don’t make a decision. At the same time, our biggest client was repositioning its business and changing how it dealt with us. The scale that client gave us depended on getting that right.
Neither was a distraction. Both were real and urgent, and both lived in the detail.
So the competitor’s deal became a line in a meeting, noted and set aside. Nobody was interested in exploring what it meant. The detail left no room for it.
The drift was slow enough to look like noise. More manufacturers began to take the competitor seriously. Whether their service was better than ours stopped mattering, because the partnership gave them a reputation we couldn’t match by working harder.
Clients moved one at a time. Each loss weakened our hand with service providers and strengthened theirs.
Seeing the threat was the easy part. Making room to act on it was where we failed.
That’s the trap for capable leaders. The better you are at the detail, the more of it lands on your desk, and the less height you have left to see from.
How Do You Think Strategically?
Most advice on how to think strategically arrives as a list: twelve tips, four steps, five Cs. You need far less. You need one question, and the room to act on what it shows you.
What’s Going On Here?
In Good Strategy/Bad Strategy, Rumelt credits the question to John Mamer (p. 79). Rumelt calls the work it starts a diagnosis: naming what’s actually happening before you decide what to do about it.
The question works because it refuses the first answer. It’s close to reasoning from first principles: you keep asking until the answer stops changing.
Here’s how it ran on the 2012 deal.
- The obvious read. A competitor has won a contract with a mainstream manufacturer.
- Ask again. What does this partnership give them that the contract alone doesn’t?
- The answer. Credibility. A mainstream manufacturer’s name beside theirs tells every other manufacturer they’re safe to work with.
- The real situation. They were positioning on quality, and no service record of ours could outrun a borrowed reputation.
Each pass moves you one layer further from the event and closer to the direction. Stop when the answer changes what you would do next.
How Do You Get Out of the Detail?
I once watched a film about a trauma team. The consultant never touched the patient. He stood at the foot of the bed, where he could see both the patient and the monitors, and directed the work from there.
Leaders need their own foot of the bed.
Start with a regular slot, away from the operational meetings, where the only agenda is one question: what’s going on here? Bring the things nobody has had time to look at, and ask it of each. When the same issue keeps returning, follow it back to the rule that keeps producing it; that’s systems thinking, and it’s often where the diagnosis lands.
Then give some of the detail away. If you’re the only person who can run the project, you’re also the only person who can’t step back from it.
The slot only works if it can change something. When the question turns up a direction, name an owner for the response before you leave the room.
What Happens Next, and After That?
A diagnosis is only useful while you can still act on it cheaply.
This is where second-order thinking earns its place. It means asking what happens as a result of the first consequence, and then what happens after that. Most decisions stop at the first answer.
Run it on the 2012 deal and the chain was visible on day one. One contract goes, and other manufacturers notice. Clients follow the manufacturers, and service providers follow the volume.
Each link makes the next one more expensive to break. In 2012, answering the deal would have cost a strategy conversation. Fourteen years later, there was nothing left to answer with.
Before you file a competitor’s move, ask:
- What is this evidence of?
- If it works for them, what happens next, and after that?
- What will this move cost them, and where does that leave an opening?
- What would it cost to respond now, and what will it cost in two years?
What Does Strategic Thinking Look Like in Practice?
Looking back, the response didn’t need to be dramatic.
Strategic thinking in 2013 wouldn’t have meant matching the competitor deal for deal. It would have meant deciding what our answer to their borrowed credibility was, and putting someone in charge of it while the ERP and the client work carried on.
We had a complete end-to-end solution, and the competitor didn’t. The answer was to position it hard, as a best-in-class service nobody else could offer.
And we should have gone after their other clients. Integrating a partnership that size was always going to stretch their service levels, and a stretched service is when clients start looking elsewhere.
The specific move matters less than who makes it. In 2013 the decision was still ours. Fourteen years later, our competitor made it for us.
What’s Going On in Your Business Right Now?
Somewhere in your business there’s an event you’ve already filed. A competitor’s new partner, or a client that changed how it buys from you.
Ask what it’s evidence of, before the urgent work decides the answer for you.
What’s the move behind the move you filed last month?
FAQs
Is strategic thinking just long-term planning?
No. Planning sets out what you’ll do. Strategic thinking asks whether you’ve read the situation right before you plan anything. A five-year plan built on the obvious read of a competitor’s move is still built on the wrong read. Diagnosis comes first, which is why “what’s going on here?” matters more than the plan.
How do I know if I’m too deep in the detail to think strategically?
Look at what fills your week. If every meeting is about delivery and none asks what’s changing around you, you’re in the detail. The other tell is an event you noted and moved past, like a rival’s new partner. If nobody has asked what it means, nobody is thinking strategically about it.
Is thinking strategically the same as second-order thinking?
Not quite. Second-order thinking follows consequences forward: what happens next, and after that. Thinking strategically starts a step earlier, by asking what the event in front of you is evidence of. You need both, because a wrong diagnosis followed forward carefully still takes you somewhere you didn’t mean to go.
How do you think strategically at work when you’re busy?
Protect one regular slot, away from operational meetings, with a single agenda: what’s going on here? Bring the things nobody has had time to look at. When the answer points somewhere new, name an owner before you leave. It works the same way as reflective decision-making, looking back so you can decide forward.
Why do leaders see a threat and still not act on it?
Because seeing a threat costs nothing, and acting on it costs attention the business has already spent elsewhere. A slow threat also looks less urgent each week than the work in front of you. That gap between seeing and moving is where indecision in leadership takes hold.
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