Strategic management is the ongoing planning, monitoring, analysis and assessment of all necessities an organization needs to meet its goals and objectives. Changes in business environments will require organizations to constantly assess their strategies for success. The strategic management process helps organizations take stock of their present situation, chalk out strategies, deploy them and analyze the effectiveness of the implemented management strategies. Strategic management strategies consist of five basic strategies and can differ in implementation depending on the surrounding environment. Strategic management applies both to on-premise and mobile platforms. Show
What are the benefits of strategic management?Strategic management is generally thought to have financial and nonfinancial benefits. A strategic management process helps an organization and its leadership to think about and plan for its future existence, fulfilling a chief responsibility of a board of directors. Strategic management sets a direction for the organization and its employees. Unlike once-and-done strategic plans, effective strategic management continuously plans, monitors and tests an organization's activities, resulting in greater operational efficiency, market share and profitability. Strategic management conceptsStrategic management is based around an organization's clear understanding of its mission; its vision for where it wants to be in the future; and the values that will guide its actions. The process requires a commitment to strategic planning, a subset of business management that involves an organization's ability to set both short- and long-term goals. Strategic planning also includes the planning of strategic decisions, activities and resource allocation needed to achieve those goals. Having a defined process for managing an institution's strategies will help organizations make logical decisions and develop new goals quickly in order to keep pace with evolving technology, market and business conditions. Strategic management can, thus, help an organization gain competitive advantage, improve market share and plan for its future. Five stages of strategic management processThere are many schools of thought on how to do strategic management, and academics and managers have developed numerous frameworks to guide the strategic management process. In general, the process typically includes five phases:
Effective communication, data collection and organizational culture also play an important part in the strategic management process -- especially at large, complex companies. Lack of communication and a negative corporate culture can result in a misalignment of the organization's strategic management plan and the activities undertaken by its various business units and departments. (See Value of organizational culture.) Thus, strategy management includes analyzing cross-functional business decisions prior to implementing them to ensure they are aligned with strategic plans. Types of strategic management strategiesThe types of strategic management strategies have changed over time. The modern discipline of strategic management traces its roots to the 1950s and 1960s. Prominent thinkers in the field include Peter Drucker, sometimes referred to as the founding father of management studies. Among his contributions was the seminal idea that the purpose of a business is to create a customer, and what the customer wants determines what a business is. Management's main job is marshalling the resources and enabling employees to efficiently address customers' evolving needs and preferences.
IT leadership and management In the 1980s, a Harvard Business School professor called Theodore Levitt, developed a different strategy with a focus on the customer. This strategy was different from the previous emphasis on production -- i.e., creating a product of high quality ensured success. Distinctive competence, a term introduced in 1957 by sociology and law scholar Philip Selznick, focused on the idea of core competencies and competitive advantage in strategic management theory. This enabled the creation of frameworks for assessing the strengths and weaknesses of an organization in relation to the threats and opportunities in its external environment. (See SWOT analysis). Canadian management scientist Henry Mintzberg concluded that the strategic management process could be more dynamic and less predictable than management theorists had thought. In his 1987 paper, "The Strategy Concept I: Five Ps for Strategy," he argued "the field of strategic management cannot afford to rely on a single definition of strategy." Instead, he outlined five definitions of strategy and their interrelationships:
SWOT analysisA SWOT analysis is one of the types of strategic management frameworks used by organizations to build and test their business strategies. A SWOT analysis identifies and compares the strengths and weaknesses of an organization with the external opportunities and threats of its environment. The SWOT analysis clarifies the internal, external and other factors that can have an impact on an organization's goals and objectives. The SWOT process helps leaders determine whether the organization's resources and abilities will be effective in the competitive environment within which it has to function and to refine the strategies required to remain successful in this environment. Balanced scorecard in strategic managementThe balanced scorecard is a management system that turns strategic goals into a set of performance objectives that are measured, monitored and changed, if necessary, to ensure the strategic goals are met. The balanced scorecard takes a four-pronged approach to an organization's performance. It incorporates traditional financial analysis, including metrics such as operating income, sales growth and return on investment. It also entails a customer analysis, including customer satisfaction and retention; an internal analysis, including how business processes are linked to strategic goals; and a learning and growth analysis, including employee satisfaction and retention, as well as the performance of an organization's information services. As explained by the Balanced Scorecard Institute: "The system connects the dots between big picture strategy elements such as mission (our purpose), vision (what we aspire for), core values (what we believe in), strategic focus areas (themes, results and/or goals) and the more operational elements such as objectives (continuous improvement activities), measures (or key performance indicators, or KPIs, which track strategic performance), targets (our desired level of performance), and initiatives (projects that help you reach your targets)." Value of organizational cultureOrganizational culture can determine the success and failure of a business and is a key component that strategic leaders must consider in the strategic management process. Culture is a major factor in the way people in an organization outline objectives, execute tasks and organize resources. A strong organizational culture will make it easier for leaders and managers to motivate employees to execute their tasks in alignment with the outlined strategies. At organizations where lower-level managers and employees are expected to be involved in the decision-making and strategy, the strategic management process should enable them to do so. It is important to create strategies that are suitable for the organization's culture. If a particular strategy does not match the organization's culture, it will hinder the ability to accomplish the strategy's intended outcomes.
In order to continue enjoying our site, we ask that you confirm your identity as a human. Thank you very much for your cooperation. After months (or more) of planning and collaborating, you have a solid strategy in place to guide your organization into a bright future. All too often though, even the best strategic plans end up gathering dust on a shelf. A strategic action plan is your guard against this happening—so not only can you say you have the best strategy, you can prove it. What is a strategic action plan?Let’s start by differentiating between a strategic plan and a strategic action plan. In short, strategic planning is the process by which you plot out, step by step, how your organization will get where it wants to be. We won’t go into detail about the process here, but you can read more in this article. By extension, a strategic action plan explains how you’re going to make your strategy a reality. It takes the purpose and goals you’ve outlined and adds the details needed to turn thought into action. One action plan example would be defining who has ownership over an initiative, when it’s expected to be completed, what resources are needed, etc. This is your detailed road map of the journey you’ll take to reach your goals. Why do you need a strategic action plan?Creating an action plan gives you a clear guide to success. It helps prioritize goals, maximize resources, and make better decisions, increasing your organization’s efficiency and effectiveness as you execute on your strategy. It can also help boost internal morale and public confidence. Employees will know exactly what they need to do to achieve the organization’s strategy, day by day and task by task. External stakeholders will have confidence that efforts are coordinated and purposeful, which builds credibility and transparency. And everyone can track results and monitor progress toward goals. Now that you understand why a strategic action plan is vital to your strategy, how do you build that roadmap? There are various strategic action plan templates out there. Here is a high level view of one that includes the organization's objectives, action items they have planned, and a description, owner, dates and percent complete of each action. 7 Steps Of A Strategic Action Plan1. Create a strategic plan.As we mentioned in the previous section, strategic planning is the first step to a concrete action plan. This is where you state your mission and vision, and clearly outline your organization’s goals and target objectives. Not sure where to begin? Here are 10 free strategic planning templates to get you started. 2. Determine how to accomplish your strategy.Create concrete SMART goals that align with your strategic plan. Your goals should include the actions you must take to reach them. Describe each action item so everyone can understand what needs to be done. This is where you can get down to specifics. For example, a local government strategy could be to increase citizen engagement. Your action plan would be to launch a marketing campaign, form a citizen task force, and collect feedback from citizen surveys and focus groups. 3. Name names.Next, you must assign ownership and define who is responsible for what. This ensures someone is accountable for each initiative or measure, so nothing falls to the wayside. Ownership and accountability are key to achieving your goals. This includes who is responsible for executing, reporting, or simply overseeing a task. You should also indicate which parties should be informed about updates or changes. 4. Draft timelines.Set deadlines for each measure or initiative. Deadlines should offer a smooth, logical workflow that is realistic—plan on what’s possible, not what you wish were true. By providing target start and end times, a timeline ensures continuous, trackable progress. You may choose to incorporate individual initiatives and milestones into your timeline as well. Think of these as mini-goals that can help ensure you are on the right path. 5. Allocate resources.Every strategy has multiple interdependencies and you’ll need to figure out what (and who) is needed to reach your goals. A big part of equipping employees for success is allocating the proper resources for all tasks. 6. Implement it.It’s called a strategic action plan for a reason. Just like with a strategic plan, creating an action plan only means something if you take the steps to implement it. You can and should ask for status updates—accountability is key. Your strategy should remain a focus of the organization and team members should be able to explain how their roles contribute to the strategy, if they aren’t actually reporting on progress each week. A solution like ClearPoint can help. It can automatically send email reminders and visual status reports to team members. Gantt charts also offer a simple overview at a glance, with flexible properties that update with a single click. 7. Celebrate wins.Once your strategy is in play, keep people engaged by celebrating both big wins and small milestones. Learning how to create an action plan and then actually doing it takes a lot of hard work, which should be recognized and appreciated. How do you know when you’ve had a big win (or near miss)? Use this guide to create an internal reporting process that shows strategic action plan results.Strategic Action Plan ExamplesIt can be hard to tie the concept of a strategic action plan to the reality, so we’ve gathered a few examples of how your organization can manifest these plans. Use these as inspiration and general guides versus action plan samples that need to be copied exactly. Town Of Morrisville, NCMorrisville uses a clean, easily navigable format to outline its strategic action plan. The Initiatives tab in particular explains what actions the city is taking to reach its goals, including statues, milestones, and percent complete. City Of Cambridge, ONIn their summary report, Cambridge clearly links strategic actions to initiatives. Each initiative has a status indicator to show progress at a glance. This ensures both city employees and citizens know what’s being done to reach goals and how the city is progressing. City Of Germantown, TNGermantown does an excellent job of describing why City Services and Finance is a key performance area for its strategy. Then, they use a neat grid to outline action plans—including concise bullets to provide additional detail on the plans—with timelines and status indicators for KPIs. In ConclusionA good strategic action plan is clear, current, and detailed. That means that even people who missed the company strategy meeting should be able to read it and know exactly what to do, how, and when. It is also specific, measurable, and relevant. It sets a straight path toward your target destination and does not deviate. There is a saying: “People don’t plan to fail. They fail to plan.” Make your strategic planning a success with an action plan. To learn more about how to write an action plan for your strategy, contact us.
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