Strategic management for the modern company
Strategic planning and management has moved from highly analytical operations to that of using a more inclusive, creative, thinking process that actively engages all stakeholders and individuals within the company. This move recognises that people who are actively involved in the business care about their organisation can and do make valuable contributions to planning the company’s future.
The essential principle of strategic planning remains the same – it is about making choices – between cost and or quality. Its whole purpose is to equip companies with a process to better make those choices. The objectives are to find, develop and leverage competitive advantages that will enhance and sustain a company’s position and long term viability.
Johnson and Scholes in their book “Exploring Corporate Strategy” say that strategic decisions are concerned with;
- The scope of organisations activities.
- The matching of organisations activities to its environment.
- The matching of its activities to its resource capability.
- The allocation and or reallocation of major resources in an organisation.
- The values, expectations and goals of those influencing strategy.
- The direction the organisation will move in the long term.
- Implications for change throughout the organisation – they are therefore likely to be complex in nature.
Strategic planning is actually deciding on which strategy is best for the organisation to adopt, planning how that strategy can be put in to effect. Strategic management is the doing – actually making the plan happen.
Don’t just plan – think
The traditional methods of developing strategy have been usually led from the top i.e. CEO down and fewer considerations were made to those people below line management positions. The CEO has overall responsible for strategy formulation and must be able to see the big picture and take a longer range, broader business perspective. My advice to CEO’s is step back from the day-to-day tactical details of the business and focus on the “why”, not just the “what” and “how”.
CEO’s should encourage information flow and strategic conversations. This can be done through regular briefing meetings, staff training and development, encouraging communication and creating an organisational culture that embraces teamwork and cooperation.
Always start with a clear statement of the organisation’s objectives so that provides the necessary focus to direct efforts and resist distractions or unnecessary digressions.
Strategies must be developed from insights, foresight, considering scenarios of what is and what might be…, trends, fresh ideas, creativity, and intuitive hunches.
Organisations that actively involve their people in the process of strategic planning will create a team with a greater ability and agility to change and adapt.
An immediate benefit will be in achieving a unified acceptance of the action plans. Secondly your colleagues will know you value their opinions and ideas.
There is a link – good ideas, planning and prompt implementations do lead to increased profitability. The ability to predict and control your business future is a prize worth chasing.