Simply put, strategic management encompasses everything that an organization does from beginning to end to achieve long-term success. Spanning beyond day-to-day operations, strategic management is an action plan to ensure that a company can grow and remain competitive in the future.
Main Stages of Strategic Management
The strategic management process has three main stages that outline everything from getting started through continuous evaluation.
Stage 1 – Strategic Formulation and Planning
The first stage of the strategic management process is when goals and objectives are defined. With the goals defined, plans are created to achieve them.
The following questions are answered during this stage of the strategic management process:
- What does success look like for us in the future?
- How do we measure future success?
- What steps do we need to take to achieve success in the future?
- What resources will be needed to accomplish our goals?
Stage 2 – Strategy Implementation
During the second stage of the strategic management process, plans are executed. Resources are allocated and people are assigned to handle tasks at hand. It is important for information to flow throughout an organization so that everyone understands what their role is in achieving goals.
This occurs when the plans created during the strategic formulation stage are put in motion.
Stage 3 – Strategy Evaluation and Control
The final stage of strategic management is where leaders evaluate the plans put in motion during the previous steps. This occurs simultaneously with strategy implementation as a part of continuous improvement.
As the plan is implemented, progress is evaluated, and the main objective is to identify what is successful, what isn’t, and pivot as necessary.
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3 Tips to Improve Your Strategic Management Process
Because strategic management allows you to position your organization for success in the future, it’s important to do what you can to get it right. While there are many internal and external factors that can drive success, there are a few steps that can be implemented into your strategic management process to improve success.
Develop a Strategy Office or Strategy Team
Having a team dedicated specifically to the success of your strategic plan prioritizes your strategic management process and creates a focus that is hard to otherwise replicate. Not only are they involved in the annual strategic process, but they take ownership in the success of the execution of your strategic plans.
Robert S. Kaplan and David P. Norton outline the responsibilities of a good Strategy Team as developing the strategy, communicating the strategy, aligning the organization, integrating strategic priorities with other support functions, and reviewing the strategies.
All these responsibilities are crucial to effective strategic management. But without the help of a strategy team, it becomes much easier for some of those responsibilities to land on individuals who either don’t have the capacity or the right skill set to see it through.
Make Sure the Right People are Involved
Including those involved in strategy implementation in the strategy formulation process can pay dividends. It not only improves buy-in and engagement, but it also enriches the discussion. These individuals often possess critical knowledge that can improve your strategic planning process.
In a McKinsey Business Article, Renée Dye and Olivier Sibony noted,
“Strategic conversations will have little impact if they involve only strategic planners from both the business unit and the corporate levels. One of our core beliefs is that those who carry out strategy should also develop it. The key strategy conversation should take place among corporate decision-makers, business unit leaders, and people with expertise essential to the discussion. In addition to leading the corporate review, the CEO, aided by members of the executive team, should, as a rule, lead the strategic review for business units as well.”
Streamline the Process of Tracking and Monitoring Your Plans
I’m sure you’ve heard, “You can’t manage what you don’t measure.”
If you aren’t tracking your plans in a streamlined way, it’s likely that you will miss key information. This gap in information creates an unclear picture of how your progress is measuring up against your expectations.
As a best practice, don’t track your most critical strategic initiatives and strategic objectives through a very manual process like updating different Excel files, PowerPoint, or Word documents. This makes the process extremely cumbersome and will often leave you wondering if you’re looking at the most accurate and up-to-date information.
Tracking progress is an essential part of the strategic management process and it’s imperative to have a proper mechanism or tool in place to do so. The tool should not only streamline the process of collecting updates for you but should also give you visibility into your performance across your multiple plans. This will allow you the opportunity to have timely discussions with stakeholders, remove barriers to success, and tighten up your strategic management process.
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