You need to overcome yourself and stop being afraid of the phrase "strategic management". The associations and stereotypes associated with it are really not very pleasant: annual strategy sessions involving managers from all branches, presentations, a speech by an invited consultant, group work, the walls of the hall hung with scribbled sheets with options for wild and unrealizable missions, countless goals, plans, deadlines and executors. Then these sheets will be rolled up, thrown on a cabinet to gather dust for a long time - until the next session. In fact, the concept of strategic management is erased by numerous stereotypes.
Where do the stereotypes come from and who is to blame
Strategic management is a favorite topic of business coaches, who would be more correctly called business charlatans. Many of them, being quite decent people, easily go to teach others.people to the basics of high-flying management - strategic management. These people have everything for coaching happiness: a good education, effective public speaking skills, the ability to read and extract the main thing. All but one is management experience. And education is most often psychological with an additive in the form of a diploma of a psychotherapist. The theorist can never be a full-fledged consultant, no matter how smart and great orator he may be. Hence the crowded sessions with bombastic mission declarations (it's easier to hide incompetence). The result is a complete discredit in the eyes of employees and managers of the most important component of managing a modern company - strategic management.
How it all started
The term itself is very young, it was introduced into use in the mid-70s. The task then was to separate the concepts of current management at the level of production and management from top management. Therefore, the first and main difference between the new concept of "strategic management" is its "leading" status. The author of the term is Igor Ansoff (an American of Russian origin). He introduced a model of strategic planning, then many authors invested in the concept, including the famous Peter Drucker.
Over the next fifty years, new approaches and miracle recipes for rapid and effective growth of the company grew and multiplied like mushrooms after rain. As a result, the development of strategic management got bogged down in stereotypes and numerous managerial "wrappers".
Theme Management forChiefs, by definition, has become a favorite for all sorts of schools, movements and directions. After all, who only manages what, and in whatever way… To date, there are already a dozen schools in strategic management, and these are only officially recognized ones. It became more and more difficult to understand them and even more so to choose the best option for yourself and your company. The essence of strategic management has been overgrown with additional formulations, like a Christmas tree with toys. Economic handbooks give standard definitions. Strategic management is a management function of an organization that extends to the long-term goals and actions of the organization, an interconnected set of long-term measures or approaches in the name of strengthening the viability and strength of the organization in relation to its competitors.
Who was the first to be confused and doubtful
Yes, a lot of people. It's just that not everyone spoke and even more so wrote about it. Some kind of status guru was needed here. And there were such, just three of us - it's easier together. All three of them are quite world-famous. This is a group of authors: Henry Mintzberg, Bruce Ahlstrand and Joseph Lampel. They wrote a real bestseller "Strategic Safari. Excursion through the wilds of management strategies. It will be useful for everyone to read it - it is a professional and unbiased guide to all existing methods of strategic management with debriefing, criticism and very competent comparative analysis. The Tower of Babel of "discrete changes" and "strengthenings of vitality" has finally fallen. There she is dear.
The most important thing
Need to decidewith just three concepts:
- Strategy is written.
- Strategic planning is also written.
- Strategic management - you can't write it, you can only execute it, these are actions, a process.
Strategy: actually, it all started with military affairs, the art of the commander, the general plan of warfare. Well, such a definition may well suit, why is the boss not a commander, and modern business is not a war? Let's try to formulate: a strategy is a general plan for achieving the mission and goals. And that's it. That's enough.
Now about the mission - this is the reason for the existence of the company, its global goal.
Now strategic planning: this is a detailed plan to achieve strategic goals with deadlines and responsible persons.
Finally, strategic management is a strategy implementation system with results analysis. Again, this is a process.
The essence of strategic management can be understood by asking and answering three difficult questions about a company:
- What is your company like now?
- Where should your company be in one, two, three, etc.?
- How can these changes be made?
The main focus of strategic management in an organization is on its capabilities and ability to implement strategic decisions. And such solutions are rarely simple, usually:
- new products, new markets;
- new technologies and software;
- reconstruction or restructuring of departments or the entire company.
The peculiarity of strategic management is its preventive nature. All actions to implement the strategy are proactive, not reactive. Strategic management is not about putting out fires. The strategy can be called anti-crisis, but only so that the crisis does not even arise.
Tasks and functions of strategic management
There are only five tasks:
- Define the main goal (mission) and long-term prospects.
- Convert lofty declarations and strategic concepts into detailed operational action plans that every employee can understand.
- Fulfilling these plans.
- An honest assessment of everything done, followed by an unbiased analysis of mistakes, the external environment.
- Adjustment of the content of the stages of strategic management, taking into account the analysis.
They are all tightly interconnected.
As for the functions of strategic management, they are similar to the above tasks only at first glance. In fact, these are fundamentally different things, the functional division is made in order to identify the main performers - strategy developers by their functions:
- Planning function - who performs this function in this case?
- Organizational function - the implementation of the strategic plan. Who performs? Who is in charge of the overall process?
- Coordination function - when and in what form is coordination needed? By whomrunning?
- The function of motivating employees to complete the strategic plan and achieve positive results: this function should most likely be taken over by the HR department.
- The function of monitoring the implementation of the strategic plan: how often? By what criteria and which parts of the strategy should be monitored more often? Control form and so on.
Thus, the functions of strategic management consist in a detailed division of responsibilities of the executors of the strategy with control criteria and methods of motivating employees.
Mission and dreams of the leader
Can a strategic vision be called a boss's dream? Not only is it possible, but the way it really is. In order for this dream to come true, you need to dream taking into account new trends in the industry and in society as a whole. You need to remember everything: new technologies, products, customer groups, communication tools, and so on. The world is changing at a cosmic speed, you need to keep track of everything, not to miss anything. These are the realities of today. Therefore, it is better to limit the planning horizon and strategic vision, for example, to one year.
The style of the mission statement can be anything, long or short. Highlights:
- Mission from Pepsi-Cola: "Defeat Coca!"
- Microsoft Mission: "Computer in every home".
Thus, the mission and strategic vision are the end point of the route, the general vector, the direction: in a year we will become like that. And here's how to get to this end point, which isgo around on a cart, and where to sail on a boat - we understand the following stages of strategic management.
Strategy development
If the end point of the annual route is determined, it's time to start detailing the work. The strategy should set out answers to specific questions. Examples:
- Who will we look up to in the market and how will we achieve a competitive advantage?
- How will we respond to changing preferences in our key consumer groups?
- How will we respond to unforeseen changes in the market?
- Where does the advantage come from, cost reductions, product line changes or branch restructuring?
There is no and cannot be a universal way to create an effective strategy. But there are several mandatory elements that should be included in the strategy:
- System of goals (organizational and special).
- Resource priorities - how to distribute them strategically.
- Administration of plans, monitoring and evaluation: who is responsible for what in the company.
- Forecasts of changes in key areas of the external environment.
- Overview of the main competitors with estimates and forecasts.
- Risks – external and internal.
- Financial plan by type of budgeting.
Henry Mintzberg (one of the aforementioned authors of Strategic Safari) offers three methods for developing a strategy:
- Planning strategy is the implementation of deliberate and rational plans. Usually thisplanned restructuring of the company, their mergers or acquisitions, diversification. Reminds me of a "chef's" smart product.
- Strategy of entrepreneurs. In this model, the so-called entrepreneurial intuition plays an important role. For such intuition, you need to be in the subject: an excellent understanding of the situation, an instant reaction to changes. Such a model would be more properly called entrepreneurial art.
- Adjustments along the way. We are talking about constant changes based on information coming in during the implementation of the strategy itself. This model requires the participation of all performing teams.
Strategic management goals
Where the word "strategic" is present, it always refers to large-scale and fateful events, including the thoughts of the leader, which simply must be large-scale.
Goals, if they are strategic, also reflect the company's ambitious plans. They vary from company to company, but most often the following typical goals are realized in the process of strategic management:
- Maximum profitability, expressed in any format - from profit margins and sales growth rates to the level of dividends to shareholders and product quality.
- Stability of a company in the market is a concept associated with risks and changing external conditions of existence. For real sustainability, that is, the protection of the company from unforeseen events, not only a well-developed risk management system is needed, but also serious expenses for motivation, advancedpersonnel policy with a strong social component.
- Company moving forward - new directions and activities, development of new technologies and products, development of the IT sector, product diversification, new markets, etc.
Implementation of strategic plan items
At this stage, it is time for intensive administrative work. Organizational work within the framework of the strategic management system is best described in the format of clear and precise points - so that none of the participants has any discrepancies and doubts:
- Formation of an effective team of performers with clearly defined responsibilities, hierarchy and ethical standards.
- Priority distribution of financial and other resources, taking into account the importance of the tasks performed by each unit. The main word in this paragraph is “priority”.
- Develop the procedures and rules needed to implement the strategy.
- The most important "communication" point is informing employees about upcoming strategic events. In this case, one should not spare either effort or resources, it must be carried out with maximum efficiency. The success of this new strategy depends on the success of this function. Employees should have a good understanding of why and how changes are made in the company.
- Maximum comfortable conditions for employees to perform tasks: place, time, money, communications, information.
- Effective stimulation and smart and motivation of employees - performers, including financial and non-financial, withthe need to change functional responsibilities and job descriptions.
- Formation and introduction of a system of key performance indicators linked to the fulfillment of the objectives of the strategic plan.
- Adjustment or formation of a new corporate culture, in which the concept of the mission and implementation of the company's strategy must be present.
- Create and implement best practices such as continuous improvement policies.
Strategy implementation is the most complex and troublesome component of strategic management. The further fate of the strategic management system in the company depends on its success. In this case, there are two ways: either complete discredit in the eyes of employees, or achievement of goals and progress of the company with an impetus for further growth.
Evaluation and adjustment
The implementation of the strategy does not always go as planned. All changes in the internal and external environment must be carefully monitored - this is also included in the strategic management component called "assessment and adjustment".
How to respond to change? This depends on the nature of the changes and the capabilities of the company itself and may include, for example, a revision of the budget, rearrangement of employees in the hierarchy of subordination.
The main thing is to constantly and systematically monitor progress in the implementation of the strategy, as well as unplanned changes along the way. Based on the results of such monitoring, it is necessary to create new development paths and adjust actions inplan.
Any company always has a choice - to change or continue to work comfortably in the usual format. Change is always difficult. The manager and employees need to be prepared for the fact that strategic management is forever. All constituent components are repeated cyclically. Continuous process - strategy, planning, implementation of the plan, strategic analysis, risk management. This is one of the most interesting areas of management science, where you can not do without the creative attitude and real enthusiasm of the performers. Strategic management is high-flying action.
Don't forget about accompanying and supporting regulations that are not included in the strategy. Without them, effective work on its implementation will be impossible. Usually these are corporate rules in the form of various policies and codes. These types of documents are usually prescriptive, helping to create a he althy environment and work environment.
A few words about the features of modern strategic management:
- If earlier strategic management was focused on long periods (from five years or more), today strategies are written even for a year - strategic periods are much shorter.
- Strategic management is impossible without the tight integration of all departments of the company - it is a multi-component, but a single process. IT technologies now play a special role in integration.
- Strategic management has always largely depended on the conditions of the external environment. Now this dependence has intensified. The company cannot existoutside the context of the overall development of technology, market and society.
We wish everyone who takes up the creation and implementation of the new strategy a working mood, smart bosses and positive changes.
