Strategic thinking involves anticipating changes, recognizing new opportunities, and adapting plans in response to events. Good strategists balance planning with the ability to react creatively when circumstances change. The IKEA strategy emerged from reacting to opportunities rather than rigid planning. Strategic plans should allow for challenging assumptions and recognizing when the plan is outdated. Regular reviews and adapting strategy helps organizations take advantage of unforeseen events. Strategists assess risks and uncertainties but also make committed decisions to shape an uncertain future. Both internal risks like capabilities and external risks like market dynamics must be considered. An effective strategy balances planning with the flexibility to adjust to new information.

1. Part 2: Strategic Thinking revision notes
Thinking like a Strategist
When thinking like a strategist you see new possibilities that can be shaped into
situations that are desirable or favourable. You should be able to notice historic
trends that open up new opportunities and you need to be able to play a kind of multidimensional chess game, imagining several moves ahead of what your next move
should be now.
Skilled strategists accept that the world is a complex place and still manage to figure
out what to do now in order to shape events. They do not pretend to know all the
answers; they just look for patterns and then creatively design actions now to shape
the future then.
Reacting to Events
A winning strategy is often about reacting to events. Planning only takes you so far
because you do not know what will happen in the future as you can only guess. Good
intuitive reactions can develop great strategy.
IKEA
“A young Ingvar Kamprad used cash from his father – a gift for good exam results –
to found IKEA. He lived near a furniture maker and therefore reacted by selling
furniture. He reacted to a boycott of local rivals by producing his own furniture. His
first designer reacted to not being able to fit his table in his car by producing his first
flat-pack furniture. Kamprad reacted to excessive customer demand by starting selfservice.” The IKEA strategy came from clever reactions to unplanned opportunities.
Sport
The same can be said with sport. In a game of football you have a plan (tactics), a
formation and technical skills however this will only take you so far. No player can
know what is going to happen on the pitch and how the opposing team will play. Yet,
they are able to imagine what could happen and they are able to adapt their game,
react to changes in relation to how the game is being played on the field. However
they must keep their strategy close to them so the opposing team are not able to
predict their own game play.
Points to consider:
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What can we do today that was impossible yesterday?
Is our plan still working? How can we take advantage of events?
Planning
A plan is a list of objective, priorities and tasks. Some managers insist the plan is
followed as a point of principle. The plans demand a response from senior
executives, managers and professionals. Every level of the hierarchy produced their
own version of the master plan. However you need a prepared mind to recognise

2. unplanned opportunities. The good news is that openly discussing the benefits of
reacting and the limits of planning is healthy for business. There is something for
everyone in the idea. It can bring together those who believe all plans work and those
who believe that the day-to-day is all that matters. Both are rightcorrect and both are
wrongincorrect.
Another practical challenge is making room for both kinds of strategy in the formal
ways that your team or company is organised. Strategy is more effective if it is
adapted throughout the year. Some of this is adjustment in the way the strategy is
executed; individual managers and their team may figure out how to react to
circumstances in order to deliver the official plan.
Points to consider:
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How can employees challenge the assumptions of the plan?
By the time the planning is complete is the plan out of date?
You will know that you are getting better at reacting and planning when you
find some of your greatest achievements of the past year where not part of the
plan at the beginning of the year.
Your approach to planning will become more fluid. You will include options for
moving in other directions if circumstances change. You need to examine “What if?”
scenarios whilst planning. You will become better at recognising new opportunities
whilst still having time to react to them and know how to use them to achieve your
ambitionsgoalsobjectives.
Strategists key measures:
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You have a way of recognising new unplanned opportunities
You review reactions to problems to see if they should change strategy
Your strategy is reviewed, evaluated and adapted more than once a year
Reactive times (responsiveness) are actively improved
Ensure ad hoc plans are made with a view to the bigger picture
You want channelled initiative and creativity
Taking Risks
All decisions are all about the future. Since the future is not certain, all decisions will
have an uncertain outcomeresult. However, because you are trying to shape the
future you still need to make decisions. Part of this is assessing levels of uncertainty;
the other part is making decisions that can give you the best chance of achieving your
goals despite uncertainty.
Uncertainty can only be reduced via committed decisions and actions. You can’t wait
for uncertainty to disappear yet, you can choose to create certainty of purpose and
direction. You can not remove risk, however you can think about creating a culture
and processes to adapt to unforeseen problems.

3. Points to consider:
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How high are levels of uncertainty in your industry?
What uncertainty surrounds a particular decision?
What are the risks in making (or not making) certain decisions?
How could this go wrong? What would you do next?
Avoiding risk is not the main aim of a business. The aim of a business is taking risks
and benefiting from the higher returns of taking those risks. The entrepreneurial
approach to making investments is attractive to growth strategy. And it’s why large
organisations tend to try to recapture small-group risk taking. They understand doing
nothing is often as risky as doing something.
Some risk comes from outsideexternal to the organisation. However, most risk is
about the ability of an organisation to complete it’s plan. The risky part is adapting to
the needs and demands of the market. The risk is dealing with competitor moves and
actions whilst trying to deliver products and services that customers will purchase.
And keeping your share holders satisfied.
One thing I learned from working at AXA is they never explained how the stock
market controls the company enough for all levels of employees to understand it. The
company is trying to award their share holders via excellent business achievements
every quarter. If employees understood the position of the shareholders, in relation to
how the stock market works then they are more likely to work to their best at every
level. Working to their best gives excellent results, shares go up and therefore
creating room for pay rises, bonuses or being given shares as a bonus option. Keep
all employees and shareholders satisfied.
Points to consider:
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Which risks are outside of your control?
Which risks are within your direct control?
How can you deal changes outside of your control?
How can you anticipate external changes?
Risks are internalinside and externaloutside of the organisation.
Insideinternal influences to the organisation
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How are you demanding are aspirations?
How high are performance levels?
Is there a performance aspiration gap?
How similar is the top team?
Does the top team have a stake in the business?
What skills does the organisation have?

4. Outsideexternal influences to the organisation
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Is your market complex or simple? (can be both)
Are the rules of the market stable, dynamic or chaotic?
Are resources scarce or plentiful?
Is the market growing or shrinking? How is the general economy doing?
Are there shocks beyond your market?
There are various methods some organisations use to analyse risk. For complex
choices decision trees have been used. Another approach is scenario thinking where
the strategist uses imagination to ‘see’ into the future and design actions that can be
taken to shape the future. This is all about reducing uncertainty by making actions
that are under the control of the organisation.
Strategy Key Measures:
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You have identified attractive destinations and objectives
A credible strategy for attaining objectives is created
Level of outside uncertainty is understood
Size of performanceaspiration gap is identified
The capabilityuncertainty gap is managed effectively
Does your plan answer the following questions?
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Where are we?
Where do we go from here?
What changes have to be made?
What potential problems need to be addressed?
How should changes be made?
How shall we measure progress?
SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats).
In the real world of business SWOT analysis is the main strategy tool. It is a very
practical and efficient way to start exploring the bigger picture and in deciding what
to do next.
Take these points into consideration when drawing up lists for your SWOT
analysis.
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Get everyone to think hard and imaginatively about the whole organisation
and its external context.
Consider links between the four boxes in your grid. For example what
strengths will allow you to take advantage of opportunities to overcome
threats? What weaknesses need to be addressed to benefit from them?
Prioritise your list by looking at the relative impact and probability.
Turn prioritised lists into specific strategies (or plans) with dates and owners.
The SWOT analysis can more from thinking to action.

5. Action Plans, Business Retention and TCF:
As discussed in Strategic Thinking Part 1 think about creating Action Plans, the
Treating Customers Fairly Principles and the value of Business Retention.
Action Plans
How to develop action plans that bring the most value using Scope (employee
engagement survey) as an example.
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Analyse the results of the Scope survey and select the most appropriate (will
improve business) survey items to focus on.
Choose 3-4 priority areas for action which will help to improve the levels of
engagement (of employees). Stay focused on these priority areas.
Ensure that each action is linked to the business strategy so that achieving the
actions on the plan will help to achieve the strategy overall. Ensure you are
able to articulate these links and the actions are SMART.
Summarise and document the action plans in jargon free clear English
Ensure each action is checked and signed off and are sponsored by senior
management. i.e. Someone who is going to drive the action forward and be
accountable for hitting the targets and deadlines set.
Create a tracking spreadsheet to monitor the progress of each action set. (I
have a working example, my original “Root Cause Analysis Customer
Experience Tracker Log” tool. If you wish to see a copy send me a message)
The action plan produced should be regularly visited and kept up-to-date with
progress monthly. This can also be used as a root cause analysis tool.
Identify and document any problems or risks (high or low) and how they
potentially be overcome with a solution.
Treating Customers Fairly (TCF) Principles (6)
1. All firms must pay due regard to the interests of it’s customers and treat them
fairly.
2. Treat customers as individuals. A customer can be anyone, policy holders,
retail, financial advisors and internal colleagues amongst many others.
3. Make promises you will keep. If you say you will do something for a
customer or client ensure that you have and if not make sure to inform the
customer of progress and reasons why there is a delay etc. Do not promise if
you can not deliver and breaking a promise can lead to a dissatisfied customer.
Always phone the customer on time even if you are not able to fulfil the
promise and explain very clearly why and what has happened. Offer an
alternative action if appropriate.
4. Communicate clearly with all customers. Use jargon free clear English. Issue
a well presented accurate document and write emails as you would write a
formal letter.
5. Provide accurate information on time. Get it right first time and deal with all
points raised. Always deliver within set time scales.
6. Treat complaints as a priority and an opportunity to learn: Business Retention.
Every complaint provides an opportunity to improve processes and therefore
avoiding reoccurrence of the issue. Customers who receive a goodexcellent

6. response to their complaint will become positive about the company and
through word of mouth the company will maintain a goodexcellent
reputation. However, customers who receive a poor response or feel they have
not been taken seriously will continue to complain and through word of mouth
the company’s reputation may suffer.
The Financial Services Authority (FSA) have published (6) desired outcomes as a
means of clarifying the approach firms should take in setting their TCF guidelines.
Consumers:
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Are dealing with firms where TCF is a key part of the corporate culture.
Are marketed and sold products that have been designed to meet their
needs.
Are provided with clear information and are kept appropriately informed
before, during and after point of sale.
Are provided with clear common sense advice which takes in to account
their circumstances.
Receive the level of product performance and level of service they are led
to expect.
Do not face unreasonable post sale barriers when they want to change
their product or switch provider, submit a claim or make a complaint.
Fairness is fundamentally about delivering what we promised to our customers. We
have to ensure that our promise is reasonable and accurately reflects what we intend
to deliver.
In conclusion take these points into consideration:
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Explore the threats you are facing and may face. Examine their causes and
your potential responses. Think about how you will recognise them. What are
the warning signs? At what point should you be concerned?
Discuss the generic (general) responses to performance problems. What can
you do now to prepare? What can you do now to avoid problems in the
future? How can you use potential threats to engage the organisation in
improving what it does now? (Think also about business retention)
Are you abiding by the Treating Customers Fairly Principles?
Are you creating effective action plans?
Have you evaluated your plan via a SWOT analysis?
Consider how you can create a better more sensitive early warning system.
Plug in and listen to all customers and employees and ensure they are satisfied.
Use staff surveys and group discussion, appraisals to gain an understanding of
what problems there are and where the company is doing well.
Develop a continuous marketing and innovation function that is hungry for
change at all levels and capable of seeing and doing more clearly then
competitors.
Rupinder K Gill