Manager Mint – Strategic Management (Strategic Planning)
The best organizations are professionals when it comes to laying out a Strategic Plan. Not only is this subject important to understand when starting your own business, it is equally as important to always be reevaluating your strategic plan if your established. You cannot stay the best unless you keep practicing and refining your processes. Here is the quick guide on Strategic Management.
In traditional business, most organizations lead from a “Top Down” approach where senior executives and planning teams developed the goals for the enterprise and exactly how those plans were going to be executed. Once the plan was completed, it was handed down to tactical and operational managers, where their planning abilities and activities were limited by procedure, policy and budgets for the goal. Many times however, a plan can look good on paper but when it is implemented in the field, the resources and capital may need to be reevaluated. Getting accurate data in the planning process can alleviate some of this and listening to key individuals with experience in certain fields becomes necessary.
Today businesses are changing rapidly, and managers and consulting firms are developing more and more analytical tools to increase critical analysis of complex business situations and competitive marketplace issues. One area to look out for however is if top-level managers spend too much time with outside specialist to the point where key management individuals are left out. This will result in a gap between strategic, tactical and operations managers, as well as other managers and employees throughout the organization will start to loose focus and become unengaged in the company’s success.
In modern businesses today, we are seeing the change that senior executives are involving managers throughout the company, at all levels, to participate in the strategic formation process. This is important because senior managers can get real time information from what managers on the front lines are learning from customer interaction and product sales to operations and tactile managers giving feed back on supply chain and marketing strategy. By utilizing managers throughout the organizations a company can increase their competitive edge by developing further ideas and innovations from a larger pool of people.
Since this has become a trend seen throughout management, Strategic Management has become more of the phrase to use rather than strategic planning. The reason being is that Strategic Management is adaptable plan rather that a rigid one. Strategic Management attempts to involve managers from all levels of the organization in the process of formulating and implementing strategic goals and plans of the company. Because this concept united both planning and management into one process, it ensures the process becomes an ongoing activity where all managers are encouraged and empowered to become strategic thinkers, focusing on long term, external issues as well as the tactical and operational short term issues of implementing the plans.
The Strategic Management has six parts:
1. Establishment of the Organizations Mission, Vision and Goals
2. Analysis of Eternal Opportunities and Threats
3. Analysis of Internal Strengths and Weaknesses
4. SWOT Analysis and Strategy Formulation
5. Strategy Implementation
6. Strategic Control
The Mission is a clear and concise expression of the basic purpose of the organization. It defines what the company does, whom it does it for, the good and or services that is has to offer and its values. When you hear of a Strategic Vision, that is a vision that looks towards the future. Companies that are looking to scale or grow larger tend to have a strong a clear Strategic Vision, describing where the organization is headed and what it can ultimately become. This is usually all found in a company’s Vision Statement. The Vision Statement can be one of the best sources of inspirations for a team.
The Mission and Vision directly influence the second part of strategic management. It is where a company conducts an Analysis of External Opportunities and Threats. Here a company analyzes the following:
1. Industry and Market
3. Political and Regulatory
5. Human Resources
It is important that a company conducts a detailed Analysis of the Internal Opportunities and Threats. It helps put stakeholders at ease when there is a better understanding to the risks involved.
Next the business should conduct an analysis of its Internals Strengths and Weaknesses. Management must assess strengths and weaknesses in major functional areas inside the business so see if they have the right resources and core competencies to be successful. Usually, organizations conduct the following analysis.
2. Marketing Audit
4. Other Internal Resources such as R&D, MIS, Engineering and Purchasing
5. Human Resource Assessment
After conducting the analysis of internal strengths and weaknesses the company should conduct a SWOT Analysis and Strategy Formulation. A SWOT Analysis is where a company summarizes important facts from their external and internal analysis. This helps to identify primary and secondary strategic issues that the company faces in their mission or vision.
After the SWOT Analysis, it is time for the management team to Implement the Strategy efficiently and effectively. It is important to stress how crucial a successful implementation needs to be. Defining strategic tasks by expressing in simple terms what the business is attempting to do to created a competitive advantage, assessing the organizations capabilities by determining if it can implement the tasks, developing an implementation agenda by having managers decide its activities and procedures and what skill sets and individuals will be needed in critical roles, as well creating an implementation plan that can be deployed and monitored will help to ensure a smooth roll out.
Lastly, maintaining Strategic Control will help managers in evaluating organization progress with its new strategy and how to take corrective action when the plan goes off course. Strategic Control must allow for adaptability to changing conditions where performance indicators, information systems and other mechanisms monitor the progress. Remember the system must be both efficient and flexible. The most successful organizations can adapt to the changing market, and maintain position under budgetary thresholds through strategic management.