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Strategic Management

Strategic Management

The complexity of the surrounding environment and the need for a holistic approach to management has pushed towards the adoption of more structured and comprehensive management systems. Research has revealed that organizations that engage in strategic management generally out-perform those that do not.

But research also shows that:

Only 5% of the workforce understands their company’s strategy.
Only 25% of managers have incentives linked to strategy.
Time, energy, and money are not allocated to those things that are critical to the organization. For example, budgets are not linked to strategy, resulting in wasted resources.
About 60% of organizations do not link budgets to strategy.
Management spends too little time on strategy and too much time on short-term tactical decision.
About 86% of executive teams spend less than one hour per month discussing strategy.

Our affiliate Dr. Paul Ritter stated the following, management assumes that employees:

Are well informed.
Will stay well informed.
Are capable.
Are co-operative.
Are constantly available.
Have good intentions.
Discusses in a constructive, open way.
Refrain from interests other than the good of the project’s objective.
Have unlimited capacities.

However, reality is that undesired People’s behavior and attitude could form a clear obstacle to strategy execution. Ignoring such resistance may escalate it to the level that could affect performance and initiatives’ results. During implementation the following comments are commonly heard: “We just hold our breath until they, senior managers, get over it and things get back to normal”. Or “How is that supposed to fit with the six other things we are supposed to be doing?”.

Scenario Planning

Corporate leaders tend to make assumptions such as:

The strategy formulated will indeed work.
Competitors will continue to behave in the same way.
Retaining customer loyalty is not going to be problematic.
Failure to incorporate long-term issues.

Scenario Planning will examine the external and internal driving forces for the purpose of formulating the different consistent and plausible scenarios that the organization can face in the future. It will strive to visualize peoples’ mental models and their decision making process. It can help managers recognize, consider and reflect on the uncertainties they are likely to face by identifying trends and uncertainties. A manager can construct scenarios to overcome the usual errors in decision-making, overconfidence and tunnel vision.

Strategic Management

Strategic Management is a set of managerial decisions and actions that determines the long – run performance of a corporation. It includes environmental scanning, strategy formulation, strategy implementation and evaluation and control. Strategic Management has developed into several phases. From basic financial planning to forecast based planning to externally oriented planning to Strategic Management. Research has revealed that organizations that engage in strategic management generally out-perform those that do not. It includes the following steps:

Environmental Scanning.
Strategy Formulation.
Strategy Implementation.
Evaluation and Control.

Balanced Scorecard

Kaplan and Norton co-created the Balanced Scorecard to address, amongst other things, the lagging nature of Financial Management. They presented a leading management system that looks into leading factors that are affecting performance, to allow managers to intervene before it is too late. The idea was to balance between short term and long term objectives, financial and non-financial measures, lagging and leading indicators, and between external and internal perspectives. It includes five principles:

Principle One: Mobilize Change through Executive Leadership.
Principle Two: Translate Strategy to Operational Terms.
Principle Three: Align the Organization to the Strategy.
Principle Four: Motivate to Make Strategy Everyone’s Job.
Principle Five: Govern to Make Strategy a Continual Process.

Performance Assessment And Audits

You can’t manage what you can’t measure. A company’s success rests much on its ability to measure the performance of its tangible and intangible assets. It is important to monitor financial measures as well as customer satisfaction, internal business process and employees learning. It is challenging to evaluate the latest performance measures and to align the results with the organization’s strategy. In the fast moving world, managers need to stay competitive and to have fundamental information about how well the organization is doing. Several audit tools and survey analysis have given business people better ability to manage. Corporate Clinic can measure the organization performance in more than 20 dimensions such as Strategic Management, Organization Behavior, Financial Health, Change Management, Internal Process, Quality Management, Employees Attitude and Behavior, .. etc.

Strategy Execution

Understanding how to link together people, strategy and operations is the key to business success. This is when and where the rubber meets the road. Leading this stage is the real job for running a business. It is all about leading people to work together to create a strategy building block by building block. Strategy Execution means implementing specific programs, actions and assigning accountability. This goes way beyond budgeting that looks into the rear view mirror to set its goals. It puts reality behind the numbers.

Strategy Execution includes the following features:

Change Management.
PMO “Program Management Office” implementation and management.
Strategic and Complex Projects Management.
Business Process Management.

The Learning Organization

Systems Thinking and Complexity Management will examine the driving forces that are affecting positively or negatively the success or failure of the strategy. It will also include all the projects, initiatives, themes and objectives that the organization wants to implement, to see which is affecting others and which is affected by others from a holistic view; this yields a sanity check on a strategy before engaging on implementation. Complexity Management aims to reveal and assess potential strategic and implementation inconsistencies. It is built on the sciences of systems thinking and system dynamics. It leads to insights and clarity with measurements on complexity profiles for the organization with contextual properties such as organizational readiness, degree of interrelationship and communication requirements. It takes into consideration the stakeholder dynamics which is the most important factor that affects the future outcomes of any project or initiative.

Stakeholders’ Management

A stakeholder is a person or group who can affect or is affected by the achievement of the organizations objectives. Corporate Clinic will help you become aware of the interests of stakeholders and to measure the relative importance those interests are to them and to realize how those interests are connected to yours. It is important to examine conflict of interests, if any, and to understand the perspectives of the various stakeholders. Communication plan and the impact of inviting stakeholders into communication process can be of great help to the organization. Classifying stakeholders to latents, promoters, apathetics and defenders will clarify the future management approaches which the company has to pursue.