What is Strategic Management?
We use the term “strategic management” often, but what exactly does it mean? To some, it might seem obvious, but the reality is that the term has a lot underneath the surface that is worth unpacking.
To understand what strategic management is from a base level, let’s turn to our friends at the Association of Strategic Planning (ASP) who define the term in their guide to the Body of Knowledge (BOK 2.0) :
Strategic management is an organization’s process of continuous planning, executing, monitoring, analyzing and assessing all that is necessary for an organization to meet its goals and objectives in pursuit of a future direction. This includes decisions and actions that determine the long-run performance of an organization.
When you boil the concept down to the basics, “strategic management” involves managing the strategic plan you developed and monitoring performance along the way.
Managing a strategic plan isn’t a simple task; there are many processes running at once that need to be constantly monitored. Having insight into each of these processes, the resources they require and how they all work towards your company’s mission and vision is a demanding task that can create stress and frustration for those in charge. Thankfully, there are proven methods that professionals can rely on to manage strategy successfully.
Good strategic management doesn’t look exactly the same for every business, but it does follow a similar roadmap. This roadmap can be broken down into six phases:
1. Assess and Organize
2. Environmental Assessment
3. Strategy Formulation
4. Strategic Planning
5. Strategy Execution
6. Performance Management
· Phase 1: By “Assess and Organize” we mean assessing current strategic direction and capabilities of the organization and designing and organizing an appropriate startup program based on this assessment.
· Phase 2: The Environmental Assessment includes external analyses on macro and micro level trends that impact the organization, internal analyses on the organization’s core competencies, and a SWOT evaluation based on these analyses.
· Phase 3: The Strategy Formulation phase is to define the organization’s strategic direction and establish high-level strategies to achieve desired future state.
· Phase 4: The Strategic Planning phase lays out process flows as to develop a long term strategic plan to guide leadership’s decision-making and to develop a nearer term strategic operating plan to guide staff’s implementation.
· Phase 5: Strategy Execution means aligning the organization behind the strategy and implementing the strategic operating plan through effective communication, change management, project management and risk management techniques.
· Phase 6: Performance Management is to measure the performance of the organization’s strategy, learn from weak signals and agilely adapt the plan to become a strategy focused organization which has strategic management as an ongoing process.