Components Of Strategic Thinking

(This post is intended to be a run-up for an upcoming post on strategic development in trading)


To begin with, the process for solving a problem takes two types of steps; initially Divergent - The generation of many options, alternatives, or responses to an open-ended question, then Convergent - To narrow down or select from many options. Here are the components of the thinking process, which might be helpful for traders:


Categorization: A problem, however ill-structured it may be, should be documented and categorized.
Goals: The goal or objective should be measurable, specific, documented and deadline oriented.
Consequences and Sequels: This helps to probe the side benefits, associated problems and costs associated with the process.
Challenge: As one of the most fundamental techniques, persuade individuals to refuse to accept things as they are or that the current way is necessarily the best way.
Creative Pause: It is an interruption in the smooth flow of any routine in order to once again pay deliberate attention. This is likely to park alternatives in the thought process and give attention to something that may be useful later.
Focus: One does not generate ideas with focus, yet should be willing to note a point as a potential focus for creative effort. Once a focus has been defined, it can there be treated as a real problem. It isolates Red Herring. An enhanced technique involves considering multiple foci/ alternatives definition of same focus.
Alternatives: It involves the willingness to seek out alternatives even though the next step seems to be logical and available.
Concept: It is important to 'pull back' from any idea to discover the concept behind the idea. Once the concept is extracted, work can be done to strengthen the concept, change the concept, or find better ideas with which to put the concept into action.
Resource Utilization: This involves talking to competent person/reading subject literature for generation and flow of ideas
Fractionation: it seeks to provide a complete breakdown of a situation into component parts and then reassemble them. It works with the premise that smaller parts are more manageable.
Facilitation: process control and facilitation should be carried out throughout. Also emotions, feelings and intuition should be ventilated and considered through out the process.
Factual: it emphasizes that at each step of the process, the facts should be kept aloof from the opinions. It also identifies and secludes bias and stereotypes.
Anticipatory Troubleshooting: Room should be left for possible exogenous, unforeseen events; as they may play spoilsport in the pattern of trader’s behavior.