The Strategic Management Process

The Strategic Management ProcessThe strategic management process is fundamental to the success of all organisations: commercial and non-commercial. Not only does it provide a process of formulating where you need to be and how to get there, it creates a communication platform to direct and inform stakeholders.

There is an element of skill needed in building and implementing a successful business strategy. There are no magic wands available for managers and leaders of organisations. They simply have to rely on adhering to robust and carefully thought through processes to minimise the risk of failure. As a consultant I have been amazed at the number of organisations that have opted for the “short cut” method and wondered why they have failed to achieve their ultimate goal.  You simply need to read the latest business journals to see whom I am referring to.

The robust and carefully thought through processes I referred to earlier is in fact a strategic building framework. It provides managers with a structured checklist that will ensure all the required steps have been completed. This blog builds on the work of Lynch (2009) for the development of its framework. It has five key elements Identity building.

      • Identity building.
      • Strategic Analysis.
      • Strategic Goal Setting.
      • Strategy Formulation.
      • Strategy Implementation.

Identity Building.

Identity Building is about articulating the vision or mission and its core values. It allows you to describe the identity, character and behavior of the organization (brand). This is extremely important as it creates an identity that your customers, staff and other stakeholders may want to associate with. Some academics and practitioners may argue that the process of identifying the vision and mission should be two discrete steps. I believe that this only adds complexity to the process and brings no real value. A single mission/vision is all that is needed; it should be a brief statement that defines the essence of the organization.

Strategic Analysis.

Strategic Analysis is the classic process of identifying the macro and micro environments related to your organisation. It allows you to identify what forces are affecting (or may affect) it. The tools you could use include:

Each of these tools will give you a slightly different perspective of the market you are operating in (or hope to operate in). It will highlight areas of concern and opportunities that should be considered in the planning phase. The details of each of these will be covered later.

Strategic Goal Setting.

Strategic goal(s) setting for an organisation can be influenced by many factors, they include, but are not limited to:

  •  Shareholders.
  •  Legislation.
  •  New competition.
  •  Survival.

It is the target that the organisation has set itself for a specific period. At the corporate level this could be anything from 3 to 5 years. This process provides you with an opportunity to draw a line in the sand and communicate the objectives to the key stakeholders. The goal setting process should also produce functional objectives; this will ensure that each team knows exactly what is required of them. These objectives should be made visible (internally) so that conflicts can be resolved.  It should only be done after the strategic analysis phase to ensure that what is being proposed is best for the organisation.

Strategy Formulation.

Strategy formulation is the process of identifying the business model needed to achieve its objective(s). It takes into account the key factors identified during the strategic analysis and will demonstrate how an organisation will compete in the market place. There should be an explicit focus on:

  •  Finances (Budgets).
  •  Time.
  •  People.
  •  Equipment or other resources.

It forms the basis of a plan and the key performance indicators which will be needed to manage the organisation.

Strategy Implementation.

Strategy Implementation is the process that translates the strategies into action. It is where the tactics appear and ensures that every individual within the organisation knows exactly what they should be doing and why they are doing it. It covers every minute detail, breaking down plans into smaller chunks that can be reviewed on a frequent basis: usually quarterly. The leadership and skills of individuals (not just managers) will play an important part in this process, the need for personal objectives and development plans becomes paramount.

Each of the elements described above are vital in the strategic planning process. Lynch stated that it could either be “Prescriptive” (deciding on a specific business model from the start) or “Emergent” (experimenting with the process and adjusting plans through learning). I also believe that that organisations may decide on their identity after completing the analysis phase. Figure 1 and 2 illustrates a summary of the process.

Strategic Management Framework 1

Figure 1: Strategic Management Framework 1

Strategic Management Framework 2

Figure2: Strategic Management Framework Option 2

 

 

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Dr Alan Shaw is a Senior Lecturer and Marketing consultant focusing on a range of sectors. His main interests are in strategy development, social marketing, digital marketing, advertising, consumer behaviour and marketing application.
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