Strategic thinking is critical for CEOs to scale their companies, especially in second stage. What got you to this point is not going to be what transitions you to the next level.
This means you need to spend the majority of your time looking into the future. You want to assess opportunities in the external environment that can hone your competitive edge — and trends that might hinder your firm’s ability to compete. Yet too often business owners get sidetracked because they find themselves engaged in what I call “firefighting,” which can range from tactical issues to internal politics and personnel problems.
Fires can break out for a lot of reasons, but typically are sparked by:
- Inadequate management — You may not have enough managers — or you may have the wrong people in the wrong seats. Look at your organization chart. How many buckets are you in? In second stage, it’s time to build a team of senior managers to direct your frontline employees. You then become a manager of managers.
- Problems with delegation — Or, you may have built a management team, but are having a hard time relinquishing control. Admittedly, it’s hard to hand over your baby to someone else. Yet senior managers are the path to liberation. Hire the experts you need, and then let them do the work. In other words, stay out of their lane.
- Time-management problem — You may be doing less important tasks in order to feel a sense of accomplishment. I remember one CEO who told me he didn’t have enough time for strategic thinking, so I asked him to write down everything he did over the course of a week. This was in the winter, and he came to work each morning at 7 a.m., jumped in a truck and plowed snow from the parking lot. I pointed out that he could hire someone else to do that. He resisted, saying that the employees liked it, which probably was true. But the point was he was wasting valuable time.
My suggestion is to make a list each evening of what you want to accomplish the next day and prioritize these. Work on the difficult and important tasks when you have the most energy. Also, don’t be afraid to be stingy with your time.
Granted, there may be some fires that CEOs must put out. How to identify which ones really belong to you? One of my roundtable members compares her hourly rate to what she pays other people. If she finds herself doing something below her pay grade, she considers it firefighting and quickly delegates it to a more appropriate team member.
In their book “Driven,” Douglas Brackmann and Randy Kelley point to neuroscience research that shows entrepreneurs are wired differently, and their brains crave immediate rewards. If involved in activities that don’t deliver rewards quickly enough, they lose interest. Brackmann and Kelley also note that entrepreneurs recover from risk faster than other individuals, which might make them like adrenaline junkies. With that in mind, I wonder: Could you be creating your own fires?
Awareness is key here. Entrepreneurs are unique and driven which we love. But remember, if you’re the CEO, you’re setting the direction of the company; it should be moving where you want it to go. If distracted, your ability to read the tea leaves and understand what’s happening outside the walls of your company is diminished.
Indeed, the macro environment is comprised of seven broad categories that can influence your company’s future: technology, the global market, sociocultural issues, politics, demographics, economics and the environment. As a strategic thinker, you want to look for trends in these areas and then extrapolate how they could play out and affect your company or industry.
Recently I asked one of my peer groups what they considered to be conducive to strategic thinking and help them work “on” their business versus “in” it. Among their answers:
- Going to a conference.
- Listening to customers and suppliers.
- Checking out the competition.
- Paying attention to the news — something that can take considerable time considering the number of media outlets that exist today.
- Spending time in a roundtable (I was happy to hear this one.)
Sometimes going completely out of your industry can be helpful. The point is that strategy has nothing to do with today. Strategy is about the future. You must constantly be looking ahead to anticipate problems and identify opportunities — and then get your company ready to act accordingly.