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CHAPTER 2

Cleverness

Strategy is a Crafted Approach of Fitting Resources to the Nuances of a Situation

Hope is not a strategy.

— Vince Lombardi

IT’s NATURAL TO SAY, “This is a clever child,” and less natural to say, “This is a clever adult.” The word clever implies that a person is creatively leveraging her resources to gain an advantage over a rival. With that characterization in mind, consider these three statements:

• The Oakland A’s had a clever strategy.

• The Oakland A’s had a clever goal.

• The Oakland A’s had a clever plan.

To what extent does each statement make sense to you? For me, the first statement is perfectly sensible because Oakland’s players were undervalued by others, yet they were configured in a way that led to sustained high performance. On paper, Oakland’s team was unexceptional. But despite their apparent weakness, they generated a superior record of competitive performance.

The second statement associating cleverness with goals seems odd, maybe nonsensical. This reveals a profound obstacle to good strategy and competent strategic thinking, which is people’s tendency to confuse goals and strategy.

A strategy can be good and clever, or bad and stupid.

The third statement is subject to the ambiguity of the word plan, which people often use to mean a coordinated approach to the challenge. The strategic-thinking narrative of Billy Beane reveals that he was curious about the potential of sabermetrics, skeptical of the intuitions and habits of baseball scouts, and willing to experiment to discover better methods of acquiring and using resources. Considering those elements, it’s appropriate to declare that Oakland had a deliberately conceived, clever plan.

People sometimes use the word plan in the literal sense of a document. Many strategic plans are wish lists of the organization’s goals and objectives. The authors often add graphics of favorable trends and pictures of smiling people and soaring eagles to create an illusion of achievement. Too often, they neglect the essential issues and choices for the organization.

Cleverness as the Integration of Ways, Means, and Ends

In Chapter 1, I shared the U.S. Army’s definition of strategy as a relationship between ways, means, and ends. It’s an excellent framework for helping people find a useful amount of rigor about what strategy is and how it works. The word relationship is the most important concept, because it is the relationship between ways, means, and ends that gives strategy its power.

A strategy has a less-powerful punch when it’s disintegrated. Many managers overlook the word relationship and focus on one of the elements. For examples of disintegration, some will tell you that strategy is a statement of vision (they’re focusing on the ends statement). Others will tell you that strategy consists of the steps toward the goal (they’re focusing on the ways statement). Yet others regard strategy as a matter of budgeting resources during an annual planning cycle (they’re focusing on the means).

Here are two examples of the incomplete view:

• Top executives. The typical pattern for top executives is to exchange the word strategy for goals, such as, “Our strategy is to internationalize,” or “Our strategy is to cut costs,” or “Our strategy is to be the industry leader.” Statements like these focus on the ends of strategy and ignore the ways and means.

Many people like to include visioning and vision statements in their strategy work. Many subscribe to the value of a “visionary leader” who describes a future state. These are simple and attractive ideas because the vision can establish a direction and motivate people to apply extra effort.

For contrast, former IBM CEO Lou Gerstner declares that, “in and of themselves, [vision statements] are useless in terms of pointing out how the institution is going to turn an aspirational goal into a reality.” He even goes so far as to criticize vision statements as “truly dangerous” because they create a comfort and confidence that’s not backed up by a commitment of resources and a logic for making progress. (Gerstner has the experience of being a CEO of several organizations. We examine his time at IBM in Chapters 9 and 10.)

I emphasized the word how in the preceding paragraph to stress that a strategy is hollow if it doesn’t identify the resources, commit those resources, and provide guidance for configuring those resources to pursue that strategy. Resources are finite. Managers must make difficult decisions about what the organization is going to stop doing or which opportunities it can’t afford to pursue. Strategy is more than declaring goals and setting a vision.

• Project managers. Managers who are assigned goals often use the word strategy to mean the steps (the ways) to achieve the top manager’s vision (the ends). Their goal is to determine the optimal sequence of actions to accomplish that goal.

When I hear strategy defined as the steps to get to a goal, I’m reminded of standing in the checkout aisle at the grocery store perusing the covers of magazines that have teaser headlines such as, “Five strategies to get a flat belly,” or “So-and so’s strategies for sinking long putts.” The articles describe techniques, tips, and hacks.

Use the word goal when you are referring to a targeted outcome. A good strategy is not a goal, nor is it the steps to reach a goal.

I prefer to use the word programming (and not strategizing) to describe the activity of combining techniques with resources for the purpose of accomplishing goals. I also find it helpful to keep this question in mind: What if the assigned goal is illegal, impossible, or poorly thought out?

It’s an unfortunate shortcut when people oversimplify to define strategy as a target (the ends), or in other cases, the steps (the ways) Figure 2-1 provides a general template, structured to describe the organization’s beliefs, choices, and adaptations. There are five numbered statements that serve as a preamble for introducing each part.

1. The collective interests. Oakland’s interests could be stated this way (the first preamble):

Our interests, as the Oakland organization, include … fielding a successful team and supporting our community. Our owners are important stakeholders and have established budget constraints that limit our ability to outbid our wealthier competitors for baseball talent.

It’s worth noting that an organization’s interests can change with the arrival of new ownership, new management, new governance, new rivals, new regulations, and changes in technology and social trends. Too, events can overtake the organization. As an example, during the time I was writing this book there were weekly controversies involving firearms rights, sexual harassment, and race relations in the United States. High-profile organizations found themselves making important choices and pronouncements clarifying their interests and policies. It was common to hear executives, as well as politicians, say, “My thinking on this matter has evolved.”

Figure 2-1. A five-part template for writing strategy, originating from collective beliefs, choices, and adaptations.

The identification of interests provides an opportunity to challenge assumptions about fundamental values and the organization’s place in a larger network of stakeholders.

2. The collective beliefs about the context, situation, and issues. The next part of writing strategy describes the context for the strategy and the group’s underlying justified knowledge.

Given our interests and circumstances, we believe that:

• We are at a competitive disadvantage to our rivals.

• The talent market may be inefficient. We believe that we have advantages over rivals in evaluating talent.

The above is not a comprehensive list. Further, it isn’t likely that there would be a widespread agreement with the “we believe” part of the preamble. Gaining agreement is one of the tough challenges of strategy and is a topic we’ll explore in Chapter 12.

Much of the development of good strategy involves testing beliefs. More specifically, the strategist will develop a hypothesis, collect data, and evaluate the data. For the Oakland example, if the market is inefficient, then the organization’s challenge is to discover methods to exploit that inefficiency.

3. The collective beliefs about the core challenge. A core challenge is the biggest issue (threat or opportunity) facing the organization. It’s the stimulus for undertaking the development of strategy. I state the core challenge for Oakland as follows (the third preamble):

The core challenge for our organization is … that we are in a weak position, compared to rivals, because we are a small-market team with a constrained budget for resources. The presence of inefficiencies in the market for baseball talent provides us an opportunity to recruit affordable talent, enabling us to field a winning team.

The recognition of a core challenge is a crucial element of strategy. Since strategy is defined as a specialized tool for issues management, the crucial task for the strategist is to articulate the specific nature of the opportunity or threat facing the organization. I explain more about the core challenge in Chapter 6.

4. Choosing the ways to configure the means. Strategy involves a stream of aligned, reinforcing decisions through the organization. I use the phrase we choose to qualify each object.

It’s helpful to understand those choices regarding the previously used concept of strategy as an integration of the ways, means, and ends. I have indicated the ways and/or means in brackets to help clarify the impact of the decisions.

Here is the fourth preamble applied to Oakland:

Given our interests and diagnosis of the situation, we choose to:

• Emphasize offensive performance over defensive performance [ways].

• Emphasize a logic of high on-base percentage leading to a targeted number of runs leading to a targeted number of wins [ways].

• Recruit talent based on our forecast of their performance and their affordability [ways and means].

• Not recruit highly-paid free agents [ways and means].

I made a simplifying assumption that Oakland’s goal was to win as many baseball games as possible. Accordingly, I identified the ways and means but not the ends. As you give thought to your own situation you should consider the broadest set of success criteria, including examining the ends statement.

Note that the fourth bullet point is an exclusionary statement. Limited resources (means) are a fact of life. Managers need to make choices (ways) about what to do and not do. A good strategy is one that focuses resources on the essential levers of power. A bad strategy is one that is unfocused and fails to address the real world of limited resources.

5. State the adaptation of the organization. The fifth preamble for writing strategy is this:

Given our centralized choices about direction and focus, our decentralized execution involves:

• Focusing research on college players rather than high school players.

• Positioning players in the lineup to maximize each player’s probability of getting on base.

• Experimenting with reassigning players from one position to another in order to leverage the player’s hitting prowess (for example, training a catcher to play first base.

This fifth part of the template helps us to understand that strategy involves policy choices that shape decisions made at the front lines of the organization.

In contrast to establishing and communicating goals, executives provide policy guidance in combination with resources. A good strategy recognizes that front-line managers have more expertise in some specific part of the organization. Empowered lower-level managers make better choices if they understand the interests and beliefs that frame the strategy.

Sometimes the top managers must use formal power associated with their position to compel others to act against narrower, personal interests. An example is the diminished decision-making prerogatives of Oakland’s field manager.

Crafting Strategy

If clever is an appropriate adjective for describing how strategy functions, the word crafted is a good verb for characterizing the act of developing it. Picture a woodworker crafting a table or a potter crafting a vase. She balances two guiding ideas in her mind: the general shape of the goal (e.g., table or vase) and the properties of her materials. She does not exclusively fixate on the goal, nor does she exclusively focus on her materials. She imagines a combination, a fit, of the function of the object and the properties of the materials. She iterates and experiments.

It is better to say that “strategy is crafted,” rather than “strategy is planned.”

Billy Beane’s multiyear work with the Moneyball strategy shows many parallels with the crafting analogy. The early Moneyball practices were simple. They evolved, with experimentation, into a more-refined and sophisticated strategy.

Another example of craftsmanship in strategy is the development of 3M’s Post-it Notes. The story starts with a researcher, Spence Silver, who developed a substance that he called microspheres. These microspheres had unique physical properties (they were weak adhesives). Silver’s genius was in noticing the interesting properties of the microspheres and in his drive to search for a potential application. Silver persevered even when his bosses discouraged him. Success came years later when Silver’s colleague Art Fry made an insightful connection that the microspheres could be coated onto paper and used as a placeholder in documents.

There are three more essential points in this strategy-as-craft analogy. First, strategy has raw materials: beliefs, bets, dominating ideas, insights, strategic resources, actions, and choices. Second, just as a vase functions as a container, strategy functions to advance the interests of the organization and manage issues. Third, strategy evolves from simple experiments to more-elaborate programs, just as techniques of craftsmanship evolve from crude to sophisticated.

The Sharpness Theorem

“The real challenge in crafting strategy,” writes Henry Mintzberg, “lies in detecting the subtle discontinuities that may undermine a business in the future. And for that,” he continues, “there is no technique, no program, just a sharp mind in touch with the situation.” Mintzberg’s idea of “a sharp mind in touch with the situation” echoes my assertion that a competent person is one who understands the situation and acts reasonably.

Let’s unpack three important ideas.

A competent strategic thinker is a sharp mind in touch with the situation.

Organizations will be undermined in the future. Very few established organizations sustain their power and leadership. Evidence of undermining is easily found in business, such as the turnover of membership on the Fortune magazine list of largest corporations. Moreover, loss of relevance can also be seen in schools, churches, communities, and not-for-profit organizations that were once vibrant and are now shuttered or are making little impact.

External environments are always in flux, and leaders of these declining organizations find it easier to focus on operations (that is neglect the ambiguity of the situation) and their personal aspirations. We can confidently predict that the future of today’s successful organizations is to face significantly different conditions. We can also predict that some institutions will fail to effectively respond and will lose power and relevance.

Detecting subtle discontinuities is the real challenge of strategy. A discontinuity is a deviation from expectations. It’s a weak signal that may (or may not) grow into a force that alters the future of an organization.

Specific discontinuities are not predictable. One may emerge at a specific time and place. Or it may not. Once a discontinuity emerges, there is no way to know whether there will be a significant impact or not. This is true whether we’re considering an economic bubble, new technology, or legislation. Some individuals sense the implications of the discontinuities and some do not.

Figure 2-2. A discontinuity may (or may not) trigger a chaotic, large-scale effect.

Figure 2-2 presents a general model of the life cycle of a discontinuity. Imagine an offshore earthquake as an example of a discontinuity. The average person is unlikely to notice a subtle occurrence. Perhaps the earthquake causes a disruptive tsunami, but perhaps it has no effect. Let’s assume that it causes a tsunami and that the tsunami crashes into a populated area and disrupts normal life. Chaos ensues. What new norm will appear in the reconfigured system?

Disruptions seldom destroy systems. For example, even though both World War I and World War II were devastating, new political and economic orders emerged that retained certain legacy elements of the incumbent systems and added innovations. Systems have various degrees of brittleness or resilience. When the system is disrupted, the emerging replacement can be quite different, such as when mammals became the largest land animals after the mass extinction of dinosaurs.

It’s worthwhile to note that an earthquake doesn’t instantly cause a tsunami, nor does a tsunami immediately cause destruction. Delays characterize any dynamic system. Further, the impacts might be severe, or the impacts might be insignificant.

Avoiding idealized best practices and methodology. Mintzberg asserts that “there is no technique and no program” for detecting discontinuities. This third part of the sharpness theorem contrasts with the preferences of many linear thinkers. It serves as a warning to strategic thinkers to avoid reflexive desires for methodology, such as using a formal set of strategic-planning templates.

The metaphor of organization-as-machine is longstanding, but it is also obsolete. There’s not one best way to approach an ill-defined issue in a dynamic environment.

Best practices are not suitable for uncertain environments.

Instead, the best approach for crafting strategy is a sharp mind in touch with the situation. It echoes this book’s big idea about the importance of individual competency in strategic thinking.

How Does Dullness Arise?

Oakland’s Moneyball strategy was the result of a sharp mind in touch with the situation. Consider, though, that its rivals could have independently developed and tested the hypothesis that the market was inefficient. Stated differently, why were Oakland’s competitors dull, and what lessons does the answer offer?

The answer is that individual managers of Oakland’s competition were subject to their own minds’ predispositions for mental economy and ease. Oakland’s competitors had access to the same sabermetrics methods and data. They were lax, whereas Billy Beane felt the insight borne of creative desperation.

There are at least three tendencies that foster dull strategic thinking.

People are dulled by their routines. Karl Weick and Kathleen Sutcliffe’s excellent book, Managing the Unexpected, explains how organizational routine dulls people’s ability to notice warning signs and changes in context. They explain that people operate on mental autopilot. In this condition of mindlessness, they see the familiar rather than the unfamiliar, and they categorize events with old labels. They are out of touch with their situation, yet their intuition gives them a false sense of security. They become overconfident and lax.

People build stories out of events. Most people tend to interpret their experience as a series of events. Consider this daily-life example: You see a broken window, a ball lying on the ground below it, and a group of children playing nearby. Your mind naturally tends to associate things that are proximate with each other (broken window, ball, children) and construct a plausible story: The children threw the ball that broke the window. People easily generate explanations and have confidence in those explanations. They don’t need all the facts. The story can change with new information (the neighborhood has had a series of burglaries, or an earthquake recently struck the area). However, people are reluctant to alter already-developed stories.

Murphy’s Law is a call for alertness, not a dour expectation of dystopia.

Event-oriented thinking (or linear thinking) reflects the mind’s tendency to create simple stories of proximate causes and effects. When people pass around stories that are simple explanations of “who did what to whom” or “sales are down, so we lowered prices,” they are practicing event-oriented thinking.

People, managers included, tend to react superficially to events instead of having a more subtle, nuanced understanding of systems behaviors over long periods of time. Most people remember the famous Murphy’s law this way: If it can go wrong, it will. The source is Edward A. Murphy, an engineer tasked with improving airplane cockpits. Many people tend to see Murphy’s Law in a pessimistic way.

In systems language, an airplane cockpit is a loosely-coupled system with multiple interactions between elements, such as the delay between cause and effect. It requires effort and expertise to understand complicated and non-linear systems. Murphy’s law is not a dour and cynical view of the future. Ed Murphy was advising us to be alert for the early, weak signals of discontinuities that might lead to threat or might lead to opportunity. The better lesson is that when you find yourself in a complex situation, mentally process it this way: If something can happen, sooner or later, it will.

Aspirations drive goal setting. Goal setting is typically a form of event-oriented thinking where a person’s aspirations become her most-salient mental anchors.

Imagine a typical, busy manager reviewing a forecast of the next month’s revenues. She concludes, quickly and without deep thought, that the organization can do better. Her quick mental comparison of the situation and aspirations yields her goal.

Figure 2-3 illustrates how event-oriented thinking guides goal setting. The manager feels the pressure of limited time. Her mind easily perceives two things: her readily available data and her aspirations. The mind prefers information that is readily available and then makes the best use of it that it can. (This mental action will be explained in more detail in Chapter 11 as the availability heuristic.)

For contrast, strategic thinkers practice broad framing, which is the search for and consideration of additional information. This can include general economic conditions, existing and emergent competition, social trends, technology, and natural events. Sometimes those signals increase in salience and contribute to disruption. Sometimes not. Certainly, the effort to broad frame can consume too much time for people who already feel the pressures of the day-to-day. On the other hand, to neglect weak signals is to risk increased exposure to an emerging threat or miss an emerging opportunity.

Figure 2-3. Many people tend to narrow frame and set goals.

Advice for Clarifying Goals and Strategy

A competent strategic thinker is curious and asks questions. She is alert for the mistaken substitution of goals for strategy. Here’s an example of how a more junior person could interact with a more senior person:

Top executive: “Our strategy is to launch 20 new products in the coming year.”

Project manager: “That’s a very interesting goal. What’s the thought process behind the establishment of that goal?”

The project manager’s response is subtle. She hasn’t compounded the mistake of substituting goals for strategy and has correctly recognized that a goal is another name for a target or end.

Her question avoids a confrontation over the semantics of definitions of goal and strategy. Also, it creates an opportunity for a more-productive discourse about the organization’s strategy. (Strategy-as-conversation is a topic for Chapter 12, and the courage to confront reality is a topic of Chapter 13.) That discourse might include discussing questions such as the following:

• Are the ends reasonable, given the means available?

• Given the means available to us, if we were clever, what ends might we be able to achieve?

• What are the tradeoffs?

• How might a competitor use cleverness to gain an advantage over us?

• Have our organizational interests changed?

• What issues are we trying to address?

Rather than focusing on goal setting, a competent strategic thinker looks more broadly and deeply for meaningful signals. Strategy, as defined in Chapter 1, is a broadly applicable construct that fits government, business, and charities. The search for good strategy encourages us to answer this question: What are the potential combinations of ends, means, and ways to advance our interests?

Adjectives tell you something important about strategy. I encourage you always to have an adjective to associate with the word strategy. For example, use the adjective clever to describe a configuration of ways and means of strategy (a clever strategy) that results in a relatively weak competitor gaining the advantage.

Another example is the use of the adjective good, which is explained in Richard Rumelt’s excellent book, Good Strategy, Bad Strategy: The Difference and Why it Matters. Good strategy has three distinguishing characteristics: a diagnosis of the situation, a set of essential choices (called guiding policy), and coherent action in the organization to pursue those essential choices. Good strategy is mostly the hard work of identifying and solving problems and exploiting opportunities. Rumelt explains that a bad strategy is one that’s all about desired performance outcomes. Bad strategy is “a stretch goal, a budget, or a list of things you wish would happen.”

Everyone wants to have a strategy that’s clever or powerful or good or effective or brilliant or nuanced. Similarly, no one would be satisfied if her strategy was labeled stupid, weak, bad, ineffective, dull, or generic.

Adjectives also tell you something about strategic thinking, which is why I’ve chosen to associate the word competent with the individual strategic thinker. I encourage you to assess the individuals around you: Are they sharp minds in touch with the situation? Are they acting reasonably?

A competent strategic thinker is more likely to craft good strategy. An incompetent strategic thinker is more likely to craft bad strategy.

Strategic Thinking’s Three Literacies

We would expect a literate person be able to read and write and to have a working knowledge of the use of verbs, nouns, adjectives, adverbs, and so forth. We would also expect her to be able to distinguish broader concepts, such as the difference between a book of fiction and a book of nonfiction; within those categories, a literate person could recognize a science fiction adventure from a romance novel and a history of civilization from natural history.

When addressing specialized topics, we expect a practitioner to be literate with the theory and application of her domain, such as a physician using professionally correct terms to describe the human anatomy and an accountant being able to distinguish a balance sheet from an income statement.

A competent strategic thinker is literate in three areas: strategy, judgment, and futures.

Literacy with strategy. There are thousands of articles and books published on strategy every year. Because strategy is an ambiguous concept, people pick up small pieces of good thought (the importance of planning, for example) and hold incomplete understandings of the principles of good strategy. The specialized language of strategy includes concepts such as the organization of resources, power, statements of the core challenge, and weak signals. As I’ve discussed, strategies are not synonymous with goals, nor are goals the steps to achieve a strategy.

Grand strategy is a term used by the military to describe the interests of a nation and its use of political, military, and economic power. The acronym VUCA originated with the U.S. military as a concept for showing the limitations of master planning and for encouraging agility.

In the for-profit business environment, the phrases corporate strategy, business strategy, and functional strategy have specific meanings. Corporate strategy is concerned with the question: What businesses do we want to participate in? General Electric’s famous approach to its portfolios of business is an example. GE wanted to be number one or a strong number two in each of its businesses and divested its businesses that couldn’t meet that criteria.

Business strategy is concerned with developing and sustaining a winning value proposition. Oakland’s Moneyball strategy is an example of a business strategy.

Functional strategy is associated with departments within the organization, examples being marketing strategy, or IT strategy. Upon closer inspection, functional strategy is typically practiced as programming. The department has a set of goals to achieve, and it is programming the implementation of its resources to meet those goals. In some cases, the department is nurturing some capability (such as a technology or a talent development program) that may bring unique competitive advantage to the business.

A literate strategic thinker will also recognize the distinctions of emergent versus deliberate strategy. Deliberate strategy is traditional, institutionalized strategic planning where management establishes a long-range vision and then directs the organization to implement actions to move toward espoused goals. Emergent strategy is entrepreneurial, flexible, and opportunity seeking.

Judgment literacy. An individual with judgment literacy is aware of the presence of cognitive biases and the possibility that individuals may make decisions that are not in their own best interests.

Daniel Kahneman was awarded the Nobel Prize for his contributions to a better understanding of decision making. Kahneman’s excellent book, Thinking Fast and Slow, provides an excellent and detailed description of topics that are relevant to strategic thinking: perceptions, memories, and decisions. Kahneman states, in the introduction to the book, that his goal is to “improve the ability to identify and understand errors of judgment and choice, in others and eventually in ourselves, by providing a richer and more precise language to discuss them.” This precise language includes the terms fallacies, illusions, and neglects (such as the previously described neglect of ambiguity).

People want to be systematic, rational, and deliberate in their strategizing. A fundamental task for a competent strategic thinker is to override, when appropriate, her intuitions, habits, impulses and inclinations.

Chapter 11 provides more on the role of judgment literacy and Chapter 12 describes how better conversation can help avoid mistakes in strategic judgment.

Futures literacy. One common way of anticipating the future is to rely on extrapolated trends or forecasts of a “projected future” or “predicted future.” Another kind of future is the “preferred future,” where leaders establish some wished-for outcome. Planning is done by backcasting to envision the steps to the goal.

A strategic thinker often uses a third discovery-oriented approach. She wants to see things that she couldn’t see before. She notices weak signals and explores their implications. She wants to fully grasp the potential of the future rather than be locked into a particular view.

Futures literacy is not the ability to make better predictions. Its purpose is to examine the anticipatory assumptions that connect present-day choices to their future effects. With an increased understanding of futures concepts and tools, strategic thinkers can make more-proactive decisions and can sidestep unintended consequences.

Futures literacy is probably the least-well-known of any of the three strategic thinking literacies. Fortunately, the mainstream of strategic management thought is embracing it. You will learn more about the tools of futures literacy in Chapter 7.

Nuance Matters

The text of Oakland’s Moneyball strategy contains many words because situations are unique and the response must match it. Like the words clever, powerful, effective, or good, the word nuanced is also a suitable adjective for characterizing a strategy. A nuanced strategy is desirable, and a generic strategy is not.

Given knowledge of the detail of a situation, we can see that a good strategy is understandable and commonsensical. Notice that I didn’t need pretentious words or complicated graphics to describe the Moneyball strategy.

In Chapter 1, I discussed Shoshin, the beginner’s mind. The beginner’s mind is appreciative of detail. A learner with a beginner’s mind embraces nuance because it can reveal the logic of a particular good strategy.

The next chapter describes the strategic-thinking narrative for Christopher Columbus. It will help you deepen your understanding of the purpose, nature, and scope of strategic thinking. Two highlights are the four pillars and the four X-factors of strategic thinking. These concepts provide an essential framework for defining and applying strategic thinking.