Strategic Thinking with Rich Horwath

Reading Time: 10 Minutes

In this episode with author, Rich Horwath we discuss how to be more strategic in your business.

Takeaways We Learned from Rich…

New Growth Comes from New Thinking

New growth comes from new thinking. If you’re stuck in a rut, it’s time to change your approach. Innovate and explore new methods to achieve breakthrough results.

Define Strategy Clearly

Define strategy as possessing insight that leads to advantage. Ensure your team understands this to align everyone towards a common strategic direction.

Regular Strategic Thinking

Like physical fitness, strategic thinking must be practiced regularly. Don’t just plan annually—embed strategic thinking into your daily routine for sustained success.

Diagnose Before Prescribing

Step back, diagnose the situation. Like a doctor, understand your business environment thoroughly before jumping to solutions. This leads to more effective decision-making.

Separate Goals from Strategy

Clarify the difference between what you aim to achieve (goals) and how you plan to achieve it (strategy). This distinction prevents confusion and enhances focus.

Balance Strategy and Tactics

Balance is key. Strategy outlines the path to your goal, while tactics are the specific actions to get there. Ensure both are well-defined and aligned.

Focus and Trade-offs

Strategy is not a popularity contest. Be comfortable making trade-offs. Focus on serving those you can best provide value to, rather than trying to be everything to everyone.

Effective Conversations for Direction

Regularly discuss key business issues with your team. These strategic conversations help crystallize the direction and bring everyone on board.

Stay Disciplined

Avoid the allure of bouncing from one exciting idea to another. Stay disciplined and focused on the strategies that drive the most value.

Empower Through Clarity

Empower your team by ensuring everyone understands and aligns with the strategic direction. Clarity fosters commitment and drives collective success.

About Rich Horwath

Rich is the founder and CEO of the Strategic Thinking Institute where he is a strategy facilitator and coach to executive leadership teams. He is a New York Times and Wall Street Journal bestselling author of eight books on strategic thinking.

His most recent work, STRATEGIC: The Skill to Set Direction, Create Advantage, and Achieve Executive Excellence, was selected by Inc. Magazine as a top 4 “must-read book for 2024.”

Rich has appeared on ABC, CBS, NBC, and FOX TV to provide expert commentary on business strategy and his work has been published in Fast Company, Forbes, and the Harvard Business Review.

Read the Transcript

Allison: Welcome back to the Deliberate Leaders podcast. I’m your host and executive business coach Allison Dunn. Our topic today is strategic thinking. My guest is Rich Horwath. Rich is the founder of strategic thinking Institute is a best selling author of eight books, including his most recent work, strategic, the skill to set direction, create advantage and achieve executive excellence, and was selected as income Magazine’s Top Choice. Top four choice of must read books for 2024. Rich, thank you so much for joining us here today.

Rich: Allison thanks for having me.

Allison: My pleasure. I love to kick these off with a deliberate conversation. What would be your number one leadership tip for our listeners today.

Rich:

“My number one leadership tip for listeners is new growth comes from new thinking. We don’t want to fall into Albert Einstein’s trap.”

When he described insanity is doing the same thing over and over again, and expecting different results. So for business leaders out there, if you’re doing the same tactics in the same way, you’re after a year and expecting some type of miraculous new growth, it’s not going to happen. We have to give ourselves new tools, new techniques, new tips to think differently, that’s when we can get different results for our business.

Allison: That is so brilliant. My general assessment of the marketplace today, because what you’ve just said just hits so many things like straight on that continuing to do the same thing and expecting a different result. Like we have to do new things. Yes. Let’s talk about how to do new things well and do them strategically. How’s that sound?

Rich: Excellent. Let’s do it. All right.

Allison: So strategic, you know, the term is often overused or misused in the world today. So how do you define it? And how do people become more strategic with their thinking?

Rich: Yeah, so I define strategic as possessing insight that leads to advantage if we use that definition. Now, instead of putting the word strategic in front of everything, just to sound more important, we really can think about what’s strategic? Well, a plan can be strategic, because a plan could have insight that helps you achieve competitive advantage. A person can be strategic, they can have insight that helps you create advantage. So to your point, it’s really important, as a leader, as a leadership team, to have a common language for strategy. There’s 91, different definitions of strategy reported the last three or four years.

So as a leadership team, really make sure you sit down and clarify for everyone in the room. Here’s how we’re going to define strategy. And again, if we’re going to be strategic, it’s I equate it to be like being physically fit.

You know, if we, if we run three miles once a year, we’re not going to have good cardio. But same thing with strategy. If we do strategy once a year during our process for two days, and then we put it on the shelf, we’re not going to be strategic. So we really need to be able to think to plan to act strategically day in and day out. And the best way to do that, to your point is to be strategic mean, meaning to really look for new insights, new ideas every day to have that explorers mindset.

Allison: Yeah, I love that. There’s a statistic that shows in research, so 70% of executives are overwhelmed with the amount of data and information coming at them. So how can leaders like navigate their business through these complexities? For more clarity?

Rich: Yeah, Allison, it’s a great question. So one of the things to consider is, you know, we as business leaders, oftentimes, we like to jump right to the solution. Because we’re action oriented, we want to get on with things. But what I found is the best leaders will actually step back in almost like a dot, you know, a doctor, you know, if we go see the doctor for something, if we walk into the room, and they don’t ask any questions, they don’t take any tests, they just write a prescription handed to us and leave. We think that’s crazy, because a doctor has to diagnose first, before they can prescribe. But in business, we’re prescribing new activities, new tactics all the time.

So what I’d recommend for people initially is do a situational awareness. And it’s so simple on a piece of paper, draw circle, draw a line down the road from top to bottom, and align from side to side. So you got four parts of this radar, what I call that put market in one area, customers, competitors and company, and now do a brain dump. Jot down what’s been happening in the market, what’s happening with my customers, what are the competitors doing, what’s happening within my company?

What are all those things like? So if we take the time to step back, to do a diagnosis of what’s happening in our business, that then will give us the foundation to really be able to say, here’s where we want to go as a business. So you Again, I’d recommend folks out there dual contextual radar do some type of assessment of what’s going on in the business, before we immediately jump to solutions.

Allison: That’s brilliant. And such an effective way to really brainstorm those different quadrants to understand.

Rich: Yes, exact research. Because sometimes we don’t know without actually like going in and testing things out and you brought it in. That’s such a great point you just brought up too, because doing that exercise, to your point, there’s some things we’re not going to know. So great, here are the questions that we need to go get answered. So we’re better informed about the competition or the market or the customers?

Allison: What are some of the most common mistakes that leaders make when they are trying to identify their strengths, their strategies to put in place?

Rich:

So the biggest one is mixing up strategy with what you’re trying to achieve the goal or the objective.

So oftentimes, outs and I’m sure you’ve seen this, too, people say what our strategy is to be number one in the market, or our strategy is to be the market leader. That’s what you’re trying to achieve. So again, if you’re a business leader out there, just remember, you’ve got to answer two questions all the time. Number one, what are we trying to achieve? And number two, how are we going to achieve it? So the goal and objective answer what you’re trying to achieve, the strategy is how you’re going to do it. So I equate it like a New Year’s resolution, you know, 80% of New Year’s resolutions fail, because that’s basically a goal, I want to lose 20 pounds this year, but they don’t put the strategy, they don’t put the plan in place to get there.

And as business leaders, we need to make sure that we put that plan in place as well.

So I’d say that’s probably the biggest one is just mixing up goals and in strategy.

So again, sit down with your team, and really educate them on what the difference is. And really make sure that you’re answering those two questions. What are we trying to achieve? How are we going to do it?

Allison: And thank you for that. Let’s talk about the difference between tactical and strategic, which I think kind of aligns with what you’ve just talked about, but like, how do we know when we’re being too tactical and not strategic enough? And how do you balance the two?

Rich: Yeah, it’s a great question. Because I look at lots of plans each year. I know you do, too. And oftentimes, we see strategy and tactics either intermingled or sometimes there’s really not a strategy. And there’s tactics.

So again, when we think about tactics, tactics are important, sometimes they get dismissed, but they are important. So again, if we think about strategy, let’s say, let’s just say we have a goal to get to the top of the mountain, okay, that’s we’re trying to do, we’re trying to get to the top of the mountain, the objective might be to go 3000 feet each day for three days. So we get to the 9000 foot top.

So that’s what we’re trying to achieve the goal objective. Now, to your point, the difference with strategy and tactic. Strategy is the general path that we’re going to get to the top. So can we go straight up? Do we need to zigzag? Do we need to go around to the other side? What’s that general way we’re gonna get to our goal? And then the tactics to your point, are really the specific tangible things that will help us get there. So in this case, do we need ropes or pickaxes? Do we need a boat to go around the other side? What are those specific tangible things? So again, strategy and tactics are both important. But we don’t want to be one without the other.

Allison: How? What are some of the things if someone feels like they recognize that they’re not behaving in a strategic way? What are some of the things that as a leader they can do? If maybe, let’s just say maybe they don’t even have a full blown leadership team? Maybe they haven’t identified that? How else do you get that?

Rich: Well, it’s funny, you have a beautiful background, and a couple of the prints in your background or that are that are compasses. And I’m a big fan of, you know, the leader needs to be able to navigate, they need to be that compass for the organization. So to your point, you know, if you’ve identified other leaders, or you’ve got other people you’re trying to bring along, part of it is really just as simple as let’s have a conversation about the key business issues. What are the most important things happening to our customers? What are the things that we’re really good at? Where do we need to get better?

So just having those down to earth conversations with people that then what I find is that the direction the navigation starts to percolate up in those conversations, if we’re staying at a strategic level.

And so by the end of those conversations, now, as the leader in our mind, we have a more crystallized idea of what does the direction look like? So, again, as a leader, I really believe that we have to bring everyone along with us. It’s not enough for the leader just to have everything in their head, if you’ve got a unless you’re a solopreneur and there’s some of us out there otherwise You need to bring people along to help them navigate as well. So really again, it i Allison, I think it’s as simple as let’s have some conversations, use a couple key questions to get the conversation started. And then take the results of that, and really say, how does this affect our direction?

Allison: In your book, strategic thinking, that’s your newest work. Would you be willing to give us one or two, just like pieces of gold that make people who are listening to this now want to run out and go grab a copy for themselves? Since it’s a top four must read? That we haven’t quite hit on in this conversation yet?

Rich: Yep. So let’s do one strategy. Strategy is not a popularity contest. If you have a real strategy, you are going to intentionally upset some potential customers out there. Think about all the great products, they’re not for everyone, Southwest Airlines was profitable, 40 years. But if you were a luxury traveler, you didn’t want to be on Southwest Airlines. But they were highly profitable. Because they made trade offs, they decided, here’s what we represent. And we’re not going to try to be everything to everyone.

So you need as a leader to be comfortable that you can’t have all the business out there. Who can you serve the best with the value you provide. So that would be a big one.

And then the second one that that ties into that is you’ve got to be able to make decisions, you’ve got to be able to cut some stuff off and focus on the areas where you have an advantage. Don’t be, don’t be like the bumper car at the carnival, where you’re bouncing from one thing to the next. Because everything seems exciting and fun, have the discipline to stay focused on one or two things that are really going to drive the most value. 

Allison: Rich, fantastic tips. Thank you so much. Folks, I’m going to I’m going to wrap up this interview, which I can’t thank you enough for your time with us here today in the show notes. Folks, I’m going to have his web address, how to get in touch, contact him with him and the book that we have just been speaking about. So thank you so much for joining us here today.

Rich: Thank you, Alison. I really appreciate the great questions.

I'm Allison Dunn,

Your Business Executive Coach

Join our list for exclusive tips, content and a welcome gift – our ebook on how to engage your team and boost profits.