What is Strategic Management?
Management, from a traditional perspective, is about planning, organizing, staffing (recruiting, retaining and developing talent), directing and measuring the work that goes on in an organization. Strategic Management is similar in nature. It is the core managerial responsibilities and tasks associated with building, communicating, and executing strategy. Strategic management concepts encompass the well-managed actions and tasks associated with a plan to win.
With effective strategic management practices in place an organization, function or team is better positioned to convert a vision, mission, and strategy into better results and long-term success for stakeholders (owners, customers, employees, etc.)
Like traditional management, strategy requires ongoing planning about how to create and leverage competitive advantage, organizing resources needed, directing the efforts of the organization’s talent effectively and efficiently, implementing and executing on priorities and initiatives, and evaluating performance and results. Strategic Management is a dynamic and continual process that enables organizations to shape the future by capitalizing on opportunities, mitigating risks, and anticipating changes and challenges that occur.
Why Strategic Management is Important
The long-term sustained success and competitiveness of an organization are dependent on leaders and team members’ ability to craft and implement strategy. The role of strategic management is critically important to an organization because it puts a structure in place that is needed to:
- Identify and track the opportunities, issues, disruptions, and changes that could impact the organization.
- Form a strategic vision, mission and direction.
- Convert the vision and mission into measurable targets, priorities, and plans.
- Align functions, departments, and teams around a shared direction and purpose.
- Effectively allocate resources.
- Enable the organization’s talent to proactively contribute to the strategy.
- Monitor and measure progress towards strategic objectives.
- Make adjustments and respond to internal or external opportunities or changes.
What Are the Four Phases of Strategic Management?
There are four key phases of Strategic Management:
- Awareness: Gathering information about the forces shaping the environment the organization functions in.
- Translation: Converting the information and intelligence gathered in Phase 1 into insights about potential opportunities, challenges, and changes.
- Formulation: Defining the active measures, strategic priorities, initiatives and plans that will lead to success.
- Execution: Implementing the plan, aligning others, measuring progress and making necessary adjustments.
In the fourth phase of Strategic Management, you are “operationalizing” the strategy, so management practices and disciplines become especially important in driving the strategy forward to completion. Strategic Management responsibilities include procuring resources, dividing tasks, ensuring accountability, tracking progress and measuring results. All leaders have to be flexible and able to focus on delivering short-term results while managing the future throughout all four phases.