What is Strategic Management?

Strategic Management encompasses several areas in managing and leading an organization. Planning certainly is part of the process. Without a well developed strategic plan to act as a roadmap of where you’re headed, you’re just shooting in the dark hoping one of the shots will hit the mark. And the plan must start with a future vision, mission and values. These will provide a compass for identifying the future direction of the organization, the organizational culture you want to create, and an understanding by your employees, stakeholders and customers of what you do and why you’re in business.

So you’ve created a 3-year or 5-year strategic plan. Are you done until the time rolls around to dust it off and update it three years from now? Hardly! The plan is a living document. Every year you update the plan and add another year. That way you are continuously working on your strategic plan while you work on the day-to-day activities that need to get done to move the business forward. So your 2008- 2011 plan you create this year becomes your 2009-2012 next year and so on.

Then you have every division and department in the organization create 1-year business plans that support the 3-year strategic plan. We call this the Parallel Involvement Process, for which there are many tools. Their goals and objectives are the same ones identified in the strategic plan, but the actions and initiatives they are accountable for will be different from department to department. That way you ensure that each department and everyone within the department is doing their part to ensure the strategic plan is implemented.

But strategic management doesn’t stop there. It also includes attention to your people. After all, it’s the people in the organization who make it work. Involving them in the planning and implementation is critical to ensuring you have buy-in and stay-in for your planning process. Each person’s performance review should be tied directly to how he or she contributes to achieving the objectives and values identified in the strategic plan. This also helps you create the kind of culture you want in the organization, what we call Creating the People Edge.

Ultimately, strategic management is about change…creating and leading enterprise-wide change in a successful manner so everyone understands how they contribute to implementing the change. As a leader, two of your key responsibilities are planning and change. Understanding how to lead and manage the change process, and what structures and processes to put in place to ensure a successful implementation, are all part of strategic management.