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Last Updated on December 1, 2020

How to Build Strategic Thinking Skills for Effective Leadership

How to Build Strategic Thinking Skills for Effective Leadership

Have you been thinking of how you can be a more strategic leader during these uncertain times? Has the pandemic thrown a wrench at all your carefully laid out plans and initiatives?

You’re not alone. The truth is, we all want some stability in our careers and teams during this disruptive pandemic.

However, this now requires a bit more effort than before and making the leap from merely surviving to thriving means buckling down to some serious strategic thinking and maintaining a determined mindset.

Is There a Way to Thrive Despite These Disruptions?

Essentially – yes, although you need to be willing to put in the work. Every leader wants to develop strategic thinking skills so that they can enhance overall team performance and boost their company’s success, but what exactly does it mean to be strategic in the context of the times we live in?

If you happen to be in a leadership position in your organization right now, you are most probably navigating precarious waters given the disruptions caused by the pandemic. There’s a lot more pressure than before because your actions and decisions will have a much greater impact these days not just on you, but also to the people who are part of your team.

Companies often bring me in to coach executives on strategic thinking and planning. And while pre-pandemic I would usually start by highlighting the advantages of strategic thinking, nowadays, I always begin these Zoom coaching sessions by driving home the point that this pandemic has now made strategic thinking not just an option but an absolute must.

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Assessing and making plans through the lens of a good strategy might require significant work at first. Nevertheless, you can take comfort in the fact that the rewards will far outweigh the effort, as you’ll soon see after following the 8 strategic steps I have outlined below.

8 Steps to Strategic Thinking

As events unfold during these strange times, you’re bound to feel wrong-footed every now and then. Being a leader during this pandemic means preparing for more change not just for you, but for your whole team as well.

As states and cities go through a cycle of lockdowns and reopening, employees will experience the full gamut of human emotions in dizzying speed, and you will often be called on to provide insight and stability to your team and workplace.

Strategic thinking is all about anticipation and preparation. Rather than expending your energy merely helping your company put out fires and survive, you can put the time to better use by charting out a solid plan that can protect and help you and your company thrive.

Take the following steps to build solid initiatives and roll out successful projects:

Step 1: Step Back, Then Set the Scope

One of the things that leaders get wrong during their first attempt at strategic thinking is expecting that it is just another item on a checklist. The truth is, you need to take a good, long look at the bigger picture before anything else. This means decisively prioritizing and stepping away from tasks that can be delegated to others. Free up your schedule so you can focus on this crucial task at hand.

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Then, proceed with setting the scope and the strategic goals of the project or initiative you plan to build or execute. Ask yourself the bigger question of why you need to embark on a particular project and when would be the right time to do so.

You need to set a timeline as well, anywhere from 6 months to 5 years. Keep in mind that your projections will deteriorate the further out you go as you make longer-term plans.

For this reason, add extra resources, flexibility, and resilience if you have a longer timeline. You should also be making the goals less specific if you’re charting it out for the longer term.

Step 2: Make a List of Experts

Make and keep a list of credible people who can contribute solid insight and feedback to your initiative. This could range from key stakeholders to industry experts, mentors, and even colleagues who previously planned and rolled out similar projects.

Reach out to the people on this list regularly while you work through the steps to bring diverse insight into your planning process. This way, you will be able to approach any problem from every angle.

Bringing key stakeholders into this initial process will also display your willingness to listen and empathize with their issues. In return, this will build trust and potentially pave the way for smoother buy-in down the line.

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Step 3: Anticipate the Future

After identifying your goals and gathering feedback, it’s time to consider what the future would look like if everything goes as you intuitively anticipate. Then, lay out the kind and amount of resources (money, time, social capital) that might be needed to keep this anticipated future running.

Step 4: Brainstorm on Potential Internal and External Problems

Next, think of how the future would look if you encountered unexpected problems internal and external to the business activity that seriously jeopardize your expected vision of the future. Write out what kind of potential problems you might encounter, including low-probability ones.

Assess the likelihood that you will run into each problem. To gauge, multiply the likelihood by the number of resources needed to address the problem. Try to convert the resources into money if possible so that you can have a single unit of measurement.

Then, think of what steps you can take to address these internal and external problems before they even happen. Write out how much you expect these steps might cost. Lastly, add up all the extra resources that may be needed because of the different possible problems and all the steps you committed to taking to address them in advance.

Step 5: Identify Potential Opportunities, Internal and External

Imagine how your expected plan would look if unexpected opportunities came up. Most of these will be external but consider internal ones as well. Then, gauge the likelihood of each scenario and the number of resources you would need to take advantage of each opportunity. Convert the resources into money if possible.

Then, think of what steps you can take in advance to take advantage of unexpected opportunities and write out how much you expect these steps might cost. Finally, add up all the extra resources that may be needed because of the different unexpected opportunities and all the steps you committed to taking to address them in advance.

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Step 6: Check for Cognitive Biases

Check for potential cognitive biases that are relevant to you personally or to the organization as a whole, and adjust the resources and plans to address such errors.[1] Make sure to at least check for loss aversion, status quo bias, confirmation bias, attentional bias, overconfidence, optimism bias, pessimism bias, and halo and horns effects.

Step 7: Account for Unknown Unknowns (Black Swans)

To have a more effective strategy, account for black swans as well. These are unknown unknowns -unpredictable events that have potentially severe consequences.

To account for these black swans, add 40 percent to the resources you anticipate. Also, consider ways to make your plans more flexible and secure than you intuitively feel is needed.

Step 8: Communicate and Take the Next Steps

Communicate the plan to your stakeholders, and give them a heads up about the additional resources needed. Then, take the next steps to address the unanticipated problems and take advantage of the opportunities you identified by improving your plans, as well as allocating and reserving resources.

Finally, take note that there will be cases when you’ll need to go back and forth these steps to make improvements, (a fix here, an improvement there) so be comfortable with revisiting your strategy and reaching out to your list of experts.

Conclusion

A great way to deal with feelings of uncertainty during this pandemic is to anticipate obstacles with a good plan – and a sure road to that is practicing strategic thinking.

In the coming months and years, you’ll need to continue navigating uncharted territory so that you can lead your team to safe waters. Regularly doing these 8 steps to strategic thinking will ensure that you can prepare for and adapt  to the coming changes with increasing clarity, perspective, and efficiency.[2]

More on Thinking Smarter

Featured photo credit: JESHOOTS.COM via unsplash.com

Reference

More by this author

Dr. Gleb Tsipursky

Cognitive neuroscientist and behavioral economist; CEO of Disaster Avoidance Experts; multiple best-selling author

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Last Updated on December 4, 2020

How Not to Let Cognitive Bias Control Us When Dealing with COVID-19

How Not to Let Cognitive Bias Control Us When Dealing with COVID-19

Why have so many people made so many bad decisions around COVID-19?

On the one hand, many ignored the information about the pandemic at first, dismissing its importance. Plenty believed — and some continue to believe — COVID-19 is no worse than the flu and shouldn’t be a concern. Others thought the US medical system would easily cope with it, as it did with SARS and other respiratory infections. Many think it will blow over soon, disappearing with the warm weather in the summer.

On the other hand, plenty of people have taken aggressive — and unhelpful — actions to address their fears. Many have engaged in panic buying, stocking up on more toilet paper than they can use in a year and getting canned goods that they will never eat. Others turned to hyped-up miracle cures offered by modern-day snake oil salespeople, despite health experts clearly conveying that there’s no known treatment or cure for COVID-19.

Such poor decision making stem from dangerous judgment errors that cognitive neuroscientists like myself call cognitive biases[1]. These mental blind spots impact all areas of our life, from health to relationships and even shopping, as a study recently revealed[2]. We need to be wary of cognitive biases in order to survive and thrive during this pandemic.

What Are Cognitive Biases?

A cognitive bias is a result of a combination of our evolutionary background[3] and specific structural features in how our brains are wired. Many of these mental blind spots proved beneficial for our survival[4] in the ancestral savanna environment, when we lived as hunter-gatherers in small tribes. Our ability to survive and reproduce depended on fast instinctive responses much more than reflective analysis.

Our primary threat response, which stems from the ancient savanna environment, is the fight-or-flight response. You might have heard of it as the saber-toothed tiger response: our ancestors had to jump at a hundred shadows to get away from a saber-toothed tiger or to fight members of an invading tribe.

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This lizard brain response proved a great fit for the kind of short-term intense risks we faced as hunter-gatherers. We are the descendants of those who had a great instinctive fight-or-flight response: the rest did not survive.

Unfortunately, our natural gut reaction to threats to either fight or flee results in terrible decisions in the modern environment. It’s particularly bad for defending us from major disruptions caused by the slow-moving train wrecks we face in the modern environment, such as the COVID-19 pandemic.

Thus, the people who ignored — and continue to ignore — the reality of the dangers from COVID-19 are expressing the flight response. They’re fleeing from uncomfortable information, ignoring the reality of the situation. The people who are taking aggressive and unhelpful actions are expressing the fight response: trying to take control of the situation by doing what they can to fight COVID-19.

Neither of these very natural responses is the right response, of course. Our natural instincts often lead us in exactly the wrong direction in our modern civilized environment. That’s why we need to adopt civilized (and unnatural) behavior habits to ensure we develop mental fitness to make the best decisions.

You already take unnatural and civilized steps for the sake of your physical health. In the ancient savanna, it was critical for us to eat as much sugar as possible to survive when we came across honey, apples, or bananas. We are the descendants of those who were strongly triggered by sugar. Right now, our gut reactions still pull us to eat as much sugar as possible, despite the overabundance of sugar in our modern world and the harm caused by eating too many sweets.

Just like you take proactive steps to go against your intuition to protect your physical health, you need to go against your intuitions and adopt civilized decision-making habits to protect yourself from COVID-19 and so many other modern-day problems that didn’t exist in the ancestral savanna.

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The Most Relevant Cognitive Biases for COVID-19

More specifically, you need to watch out for three cognitive biases.

The Normalcy Bias

The normalcy bias[5] refers to the fact that our intuitions cause us to feel that the future, at least in the short and medium term of the next couple of years, will function in roughly the same way as the past: normally. That was a safe assumption in the savanna environment, but not today, when the world is changing at an increasingly rapid pace.

This bias leads us to fail to prepare nearly as well as they should for the likelihood and effects of major disruptions, especially slow-moving train wrecks such as pandemics. As a result, we tend to vastly underestimate both the possibility and impact of a disaster striking us.

Moreover, in the midst of the event itself, people react much more slowly than they ideally should, getting stuck in the mode of gathering information instead of deciding and acting.

While the normalcy bias is the most harmful cognitive bias from which we suffer in the face of the pandemic, it’s far from the only one. In fact, a number of other cognitive biases combined with normalcy bias lead to bad decisions about the pandemic.

The Attentional Bias

One of these, attentional bias, refers to our tendency to pay attention to information that we find most emotionally engaging, and to ignore information that we don’t[6]. Given the intense, in-the-moment nature of threats and opportunities in the ancestral savanna, this bias is understandable. Yet, in the modern environment, sometimes information that doesn’t feel emotionally salient is actually really important.

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For example, the fact that the novel coronavirus originated in Wuhan, China, and caused massive sickness and deaths there didn’t draw much attention as a salient potential threat among Europeans and Americans. It proved too easy to dismiss the importance of the outbreak in Wuhan due to stereotypical and inaccurate visions of the Chinese heartland as full of backwoods peasants.

In reality, Wuhan is a global metropolis. The largest city in central China, it has over 11 million people and produced over $22.5 billion in 2018. It has a good healthcare system, strengthened substantially by China after the SARS pandemic. A major travel hub, Wuhan’s nickname is “the Chicago of China”; it had over 500 international flights per day before the outbreak. If we assume an average of 250 people per plane, that’s 10,000 people a day flying out of Wuhan.

Europeans and Americans, with the exception of a small number of experts, failed to perceive the threat to themselves from the breakdown of Wuhan’s solid healthcare system as it became overwhelmed by COVID-19. They arrogantly assumed this breakdown pointed to the backwardness of central China, rather than the accurate perception that any modern medical system would become overwhelmed in the face of the novel coronavirus.

In the savanna environment, our ancestors had to live in and for the moment since they couldn’t effectively invest resources to improve their future states (it’s not like they could freeze the meat of the mammoths they killed). Right now, we have many ways of investing into our future lives, such as saving money in banks. Yet our instincts always drive us to orient toward short-term rewards and sacrifice our long-term future, a mental blind spot called hyperbolic discounting[7].

This helps explain why so many people are not focusing sufficiently on the long-term impact of the pandemic. Many are rushing to “get back to normal,” failing to realize that doing so will leave them very vulnerable both to COVID-19 and the disruptions accompanying the impact of the pandemic.

The Planning Fallacy

We tend to feel optimistic about our plans: we made them, and therefore the plans must be good, right? We intuitive feel that our plans will go accordingly, failing to prepare adequately enough for threats and risks. As a result, our initial plans often don’t work out. We either fail to accomplish our goals or require much more time, money, and other resources to get where we wanted to go originally, a cognitive bias known as the planning fallacy[8]. Moreover, we don’t pivot quickly enough when external events require us to change our plans.

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Thus, the vast majority of us were unprepared for a major disruption like COVID-19. Moreover, a great many people tried to go ahead with their plans when they should have pivoted, such as holding weddings, going on vacations, and so on.

Addressing Cognitive Bias

To address these cognitive biases in relation to the pandemic, you have to adopt a realistic and even pessimistic perspective. We have no way of coping with the pandemic save a combination of shutdowns and social distancing. We will see wave-like periods[9] of tight restrictions that result in less cases, then loosened restrictions with spikes of cases, and then again tightened restrictions.

Such waves will last until we find an effective vaccine and vaccinate at least the most vulnerable demographics, which in the most optimistic scenario will not be until late 2021. If things don’t go perfectly, it might be more like 2023 or 2024: that’s the moderate scenario. In more pessimistic scenarios, we might not have an effective vaccine until 2027 or even later.

Does that feel unreal to you? That’s the cognitive biases talking. We still don’t have an effective vaccine for the flu, as our current version is only about 50% effective in preventing infections.

Ray Dalio, who leads Bridgewater Associates and manages over $150 billion in investor assets, said early in the pandemic : “As with investing, I hope that you will imagine the worst-case scenario and protect yourself against it”[10]. So what would it mean for you if you plan for the worst while, of course, hoping for the best?

The Bottom Line

You need to pivot for the long term by revising your plans[11] in a way that accounts for the cognitive bias associated with COVID-19. By doing so, you’ll protect yourself and those you care about from our deeply inadequate gut reactions in the face of such slow-moving train wrecks.

More Tips on Overcoming Cognitive Bias

Featured photo credit: Ani Kolleshi via unsplash.com

Reference

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