Are You Strategic?
by Rich H orw ath
I was thrown out of college for cheating on the
metaphysics exam; I looked into the soul of the boy
sitting next to me.
Wood y Allen
Until now , looking into som eone’s soul is about
the only w ay w e’ve had to guess at w hether or
not som eone is “strategic.” When the question
“Are you strategic?” is posed , it’s usually
answ ered by the follow ing people in the
follow ing w ays:
o Senior executives confidently reply “yes”;
o Mid -level m anagers squirm a bit w ith som e
saying “yes” and others “no”, d epend ing on
w ho else is in the room ;
o Entry-level m anagers respond “no” so as not
to be seen as overconfid ent by upper
m anagem ent.
As you m ight im agine, strictly using som eone’s
title to d etermine their strategic ability is as
accurate as using a H ollyw ood star’s popularity
to d eterm ine their know led ge of political issues.
I’ve heard entry-level m anagers in strategy
d evelopm ent m eetings synthesize several
custom er and com petitor facts to com e up w ith
brilliant insights leading to successful strategies.
I’ve also heard a senior level executive running a
m ulti-billion d ollar business say that their
strategy w as to be d ifferent, w hich is akin to
saying that they like their w ater w et. So if title
and experience are not definitive m easures of
one’s strategic thinking skills, then w hat is?
The answ er to the question “Are you Strategic?”
isn’t nearly as im portant as the follow up
question: How do you know? H ow d o you really
know if you or your fellow m anagers have the
Copyright © 2007. Strategic Thinking Institute. All rights reserved.
strategy skills required to take your business to
the next level?
Ten Strategic Thinking Competencies
To rem ove the guessw ork from the issue of
d eterm ining the level of a m anager’s strategy
skills, research w as conducted to id entify the
tangible com petencies that com prise strategic
thinking. As d eterm ined by the research, the ten
strategic thinking com petencies are as follow s:
1. Strategy—m astering the three criteria of
great strategy.
2. Insight—generating new id eas about the
business.
3. Context—m atching competencies w ith
opportunities.
4. Competitive Advantage—creating d istinct
offerings w ith superior value.
5. Value—d eterm ining the benefits/ costs of
one’s offerings.
6. Resource Allocation—decid ing w here to
focus capital, talent and tim e.
7. Modeling—visually capturing the essence of
business issues.
8. Innovation—creating new value for
custom ers.
9. Purpose—d eveloping m ission, vision and
values.
10. Mental Agility—ability to im provise, ad apt
and excel through adversity .
The ten com petencies w ere then used to d evelop
a Strategic Thinking Assessm ent. The assessm ent
is a 50 question d iagnostic that provid es an
objective assessm ent of m anager’s strategic
thinking skills. Questions are grouped into the
ten com petencies of strategic thinking in ord er to
provid e a clear picture of the exact areas of
d evelopm ental need s. Follow ing
are several sam ple questions from the
assessm ent:
Successful business strategy is about:
A. Being better than the com petition.
B. H aving the “ right people on the bus.”
C. Being different than the com petition.
One m ethod of influencing com petitive
ad vantage is to:
A. Red uce prices to d rive out com petition.
B. Change the custom er’s value preferences.
C. Benchm ark com petitors and excel at best
practices.
Context is d efined as:
A. The specific problem in a given business
situation.
B. The circum stances in w hich an event
occurs.
C. The combination of strengths and
w eaknesses an organization possesses to
balance w ith opportunities and threats.
For m y business, purpose in the form of a
m ission, vision or values statem ent:
A. Influences m y d aily activities.
B. Doesn’ t exist.
C. In reality has little, if any, im pact on m y
business.
The three value d isciplines are:
A. Revenue grow th, gross m argin and return
on capital.
B. Custom er intim acy, operational excellence
and prod uct lead ership.
C. Operational Effectiveness, low -cost
lead ership and innovation.
Once the Strategic Thinking Assessment is
com pleted , a one-to-one interview should also be
cond ucted . The interview provid es a d eeper d ive
into the areas of potential focus to ad d rich
qualitative inform ation to the quantitative
assessm ent. The result is a holistic picture of the
m anager’s strategy skills and a tangible road m ap
to enhancing their strategic thinking
com petencies.
Soul Searching or Truly Know ing?
As research by the Am erican Managem ent
Association on lead ership has show n, t he most
import ant compet ency for a leader t o possess is
t he abilit y t o dev elop st rat egy . Unfortunately,
w hen researchers exam ined lead ers at all levels
in organizations, they found only 4% to be
strategists. Without an objective w ay to evaluate
m anager’s strategy skills and program s
specifically d esigned to enhance the strategic
thinking com petencies, it’ s no w ond er the
percentage of m anagers that are strategists is so
low .
Organizations can continue to operate in first
gear w ith only a hand ful of people strategically
contributing to the business or they can tap into
the d eep reservoir of insights that are w aiting to
be aw akened in managers at all levels.
Developing m anagers into truly strategic lead ers
begins w ith the proper assessm ent of their
strategic thinking com petencies and then
program s specifically d esigned to enhance their
strategy skills. World-class com panies such as
P&G and GE are m axim izing the strategic
d ecision m aking pow er of m anagers at all levels
of their organizations. Are you?…

To view the full 50 question Strategic Thinking

Assessment, visit w w w .strategyskills.com .

Rich Horwath helps managers develop their strategic thinking skills to achieve competitive advantage and
reach their leadership potential. He is the president of the Strategic Thinking Institute, a former Chief Strategy
Officer and professor of strategy at the Lake Forest Graduate School of Management. Rich is the author of
Sculpting Air: The Executive’s Guide to Shaping Strategy and frequently speaks to organizations on strategy.
Rich can be reached at (847) 756-4707, email rich@strategyskills.com or visit www.strategyskills.com
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