Rich Horwath, author of Deep Dive: The Proven Method for Building Strategy, Focusing Your Resources and Taking Smart Action, is president of the Strategic Thinking Institute. He advises that strategic planning without some deep thinking is akin to an organizational lobotomy.

Why is strategic thinking so critical?

If you don't have a solid business strategy, there's a 50/50 chance your company will go bankrupt. Research over the past 25 years has shown that half of bankruptcies are caused by bad strategies. Strategic thinking enables managers at all levels to develop solid plans and then adapt those plans as changes occur in the market. The reality in this economy is if you don't have a strategic plan today, you may not have a job tomorrow.

What are some common errors companies make in executing their strategies?

One is poor communication. Research shows that 95 percent of employees don't understand the firm's strategies. This would be like in the National Football League, 10 of 11 offensive players going to the line of scrimmage without knowing what play they were going to run. Good leaders develop a strategy and then communicate it in a variety of different ways. Developing a simple one- to-two-page description of the strategy, ideally using common metaphors or analogies that employees will understand, goes a long way toward successful execution. A second error is a lack of calibration. Most of us wouldn't think of going a couple of years without taking our cars in for a tune-up. Yet, many people go that long without doing a similar type of tune-up on their business strategy. Research shows that 85 percent of senior leadership teams spend less than one hour per month discussing strategy. Schedule time to talk about it regularly and it soon becomes a mind-set.

Describe strategy mistakes CEOs make that you characterize as "million-dollar oops."

When Microsoft and Yahoo recently announced their search-engine partnership, Yahoo's CEO said her strategy was to grow audience and enhance display-ad leadership. Problem is, those aren't strategies, they're goals. Strategy is how you achieve it. Taking time to educate managers at all levels on the key business planning terms will make the organization much more effective and efficient.

What are key steps for companies to develop strategy?

Strategy can be broken down into three A's -- acumen, allocation and action. If we think of a car, acumen is the car key, the business insights that start our projects. Without insights, we're not able to get our work going. Allocation is the car's steering wheel, providing us with the direction of which road to take. As managers it's about deciding where to put our resources in order to move the project forward. Business success is as much about what we choose not to do, as it is about what we choose to do. The third A is action, which is like the GPS telling us which roads to stay on and which one's to avoid. In business, it's the discipline to focus on what's important to the project's success and to avoid the urgent things that pop up and try to take us off course.

Dawn House