As the time for decision-making becomes compressed and the implications of decisions become amplified, strong legal counseling skills are no longer sufficient for general counsel. My recent series on “Directions to the GC seat” identified key competencies, including strategic thinking, business and financial acumen, executive presence and the ability to lead and inspire. This column is intended to take a deep dive into strategic thinking.
What is “strategic thinking?”
Many pieces discuss how leaders can become strategic thinkers, what their skills and habits are and how to create a strategic mindset. Yet, in practice, the topic gets a bit fuzzy. After discussions with in-house and firm lawyers, it's clear to me that the meaning of “strategic thinking” is contextually subjective.
I would like to suggest a definition of “strategic thinking” and discuss what some may consider strategic:
Traditionally, strategic thinking involves identifying and finding ways to mitigate risk, including legal/litigation/regulatory risk, business risk, political risk and reputational risk, as well as other risks specific to your organization. A more expansive view of strategic thinking should include the ability to view situations from multiple vantage points and from an enterprise perspective. This broader view of strategic thinking would involve anticipating events and trends, and includes identifying opportunities to create competitive advantage.
As I started this exploration, I spoke with David Jaffe, a former GC who now provides special-situations counsel to GCs and companies. He says the key is asking critical questions of all the right players in any given situation so you can gather the information you need to think strategically.
You may think the examples below are strategic. Others may see them as tactical and already part of the GC role.
Anticipate issues based on your company's goals
Jaffe suggests that an acquisition or a significant change in a product, marketing strategy or business model gives a GC an opportunity to demonstrate strategic thinking.
Example: Your company is considering an acquisition. You prepare filings and documents for regulatory review and are ready for labor and employment issues if you consolidate facilities. Amanda Wait, an antitrust partner with Hunton & Williams, says that asking questions such as, “Who might be opposed to your deal?” can help identify issues ripe for strategic thinking. She suggests that if you anticipate political opposition, consider involving your government affairs team and contact politicians and other stakeholders early to address concerns before opposition hits the media and affects the company's reputation. Jaffe adds that by strategizing early, you can include permissions to speak with government officials in an agreement.
Identify risks and opportunities embedded in uncertainty
Uncertainty in the marketplace is difficult because you do not know what you do not know.
Example: The relatively recent rule requiring reporting use of “conflict minerals” presented an opportunity to think strategically. Non-legal and unanticipated risks the new rule posed could have included shareholder activism, supplier or customer backlash or employee morale. Asking, “What else could we do?” could have helped identify additional strategic opportunities for your company. As GC, you could have suggested that the company engage in education on the issue, or work to find other mineral sources. While the responsibility for addressing these issues may fall elsewhere, as GC you may have the first glimpse of the issue and can connect the dots.
GCs who can anticipate risks before those risks become known, or can identify an opportunity, increase their value to their companies.