|An Overview of the Strategic Management Process|
|Written by Randall Rollinson|
|Thursday, 09 February 2012 10:43|
For over twenty-five years now my great friend and professional colleague Earl Young and I have collaborated to build a robust understanding and integrated set of information and programs on the strategic management process. In our book entitled Strategy in the 21st Century we write.
“Beginning in the 1950’s ‘strategic management’ emerged as one of the most widely used (and oft misused) terms in the business management lexicon. It has been the focus of a constant stream of articles, books, tools, concepts, and software; the primary product/service of many consulting firms; and a required capstone course in most MBA programs.”i
Last year we built on our understanding of the strategic management process when I wrote an article published in Strategy & Leadership entitled “Should strategy management professionals be certified?” In this article I wrote.
”Strategic planning and strategic management have long been widely regarded as more art than science and, probably for that reason, have never been codified into a body of knowledge that would lend itself to credentialing. But an analysis of what strategic planners do suggests that the process can be described and defined. In fact, strategic planners—using the tools and techniques of strategic management--conduct a process for making crucial choices about actions that play out in an uncertain, ambiguous, and ever-changing future.”ii
The Association for Strategic Planning (ASP), the largest organization for strategic management professionals, has been hard at work addressing this challenge since 2008 and is well on the way to creating a widely recognized certification effort. Out of this process has emerged a “first generation” Body of Knowledge (BOK) centered on what strategy practitioners need to know about to meet the certification standard. This foundational effort is built around the four basic building blocks of the ASP strategic planning and management rubric – LEAD, THINK, PLAN and ACT.
Continuing to build on this solid foundation my colleagues Frank Mruk, Howard Rohm, David Wilsey and I formed the Strategy Professional Resource Center where we work to prepare emerging and existing strategy professionals to sit for one of two ASP certification exams, i.e., Strategic Planning Professional and Strategic Management Professional. To guide our work we have created a study guide which fleshes out the ASP rubric or Key Component Processes of the strategic planning and management processes. These processes are summarized in the graphic below.iii
In our guide we describe each of the four processes as follows:
“LEAD provides the vision and direction for the growth and success of an organization. Leadership is art, not an exact skill or science or skill set. It has been described as a process of social influence where one person or group enrolls the support of others in the accomplishment of a strategic undertaking. The art of leadership is getting others motivated to do that which the organization is convinced should be done. It enables an organization’s leadership team to develop an effective strategic plan and ensure efficient execution by establishing a strategic management system.”
It includes providing perpetual leadership throughout the strategic management process. It includes assessing the strategic situation of the organization and its people. It requires gaining a high level understanding and base knowledge of the situation the organization faces. It includes organizing an initiative to move the strategic planning and management process forward.
“The THINK building block incorporates internal and external views of an organization. THINK is a process of looking outward at the external environment in which the organization operates or competes. It is also the process of looking inward, inside the organization and understanding how the organization’s employees, policies, processes, and procedures produce value for customers, employees and other stakeholders. Simply put, THINK is about understanding how your organization “fits” into the bigger picture of your place in the world. Here we analyze, understand, and forecast the organization’s current and possible future external and internal environments. The purpose is to discover the basis for optimal organizational strategy development.”
In our next round of blog postings Earl Young will pen a two part blog. Part 1 will be a theory based posting and Part 2 will be focused on the applied application of THINK.
“From a holistic perspective, PLAN or planning is the process by which needs are anticipated and prioritized to implement change. Planning is critical to maintain control over change. Planning anticipates what changes will take place and puts into place a process to respond effectively. Assessment drives better decision making around a future course of action. In PLAN we determine and clearly articulate the organization’s strategy. We explore and analyze options. Objective criteria are used to select the strategy or strategies for success. A foundation is laid enabling the strategy to be made operational.”
Following Earl Young’s comments on THINK, I will offer up my thoughts on PLAN.
“The ACT building block completes the strategic planning and management cycle. At this stage in the process, the organization implements its strategic direction developed in the earlier LEAD, THINK, and PLAN building blocks. Strategy has been translated into a budget and an operating plan whose scope is either multi-year or annual depending on the organization. Action is now undertaken to run the programs, manage the projects, and produce the products and services called for in the strategic plan. We execute the strategy through an operating plan, and hold individuals and the organization accountable for results. We make fact based decisions based on reviews, analysis, questioning, and progress reporting. We measure and manage what matters. We follow through to ensure that decisions are made and the work of implementation gets done correctly. Finally we incorporate learning into new strategy development, to transform the organization into a high performance entity.”
In the last round of posting in this LTPA series, Earl Young will return to share his deep and wide insights into this most vital component, i.e. ACT.
Please do share your comments. We are anxious to learn from you and share our thoughts on these powerful topics.
[ii] Randall Rollinson, Should Strategy Professionals be Certified?, Strategy & Leadership, Volume 39, Issue 1, 2011