Why Is Strategic Thinking So Important To The Success of Any Business?
Strategic planning is a systematic way of planning for the future, but it's based on strategic thinking. Remember that a major business function is to create a sustainable (something that works long-term) means of creating revenue so you can pay the bills.
One reason many businesses fail during the first year or two is that the business owners do not think through their longer term strategies, and when things in the world change, they either lack the resources (i.e. capital, talent) or the business strategies, to allow them to remain competitive. Thinking strategically involves looking not just at the present, but the future.
Here's an example of the failure to think strategically. In July, 2006 Google introduced what's called a Quality Score that affected the advertising rates for paid advertising on their sites. For some business owners, the Quality Score resulted in huge increases in advertising costs, such that the companies could no longer be competitive.
For companies that thought strategically, this meant that they had to use other ways to generate visitors and sales to their websites, but they had planned for such eventualities, to ensure they weren't totally reliant on any one method of making sales. Thinking strategically resulted in these companies having a "plan B", and even a "plan C".
For other companies, however, who did not think strategically and relied completely for revenue on cheap Google based advertising, they were stuck. They couldn't afford to pay the new ad costs, and they had nothing in place to replace the revenues those ads used to generate. The result was that those companies were stuck. Backs to the wall, some of these companies, out of desperation, tried to cheat the new Google system, which is not strategic or sustainable, since eventually Google would once again remove their access to low cost advertising. Even more honest companies ended up losing considerable amounts of revenue (revenue they could not afford to lose) while they scrambled to figure out what to do next.
In short, regardless of business, strategic thinking helps you anticipate changes in the environment, and plan for them so you are prepared and don't go under..