No matter what field you work in, you’ve likely heard of strategic management. The term refers to how strategies, systems, and procedures can be created to make a business more competitive. To use strategic management in your day-to-day operations, it’s necessary to have processes that will empower you to manage scarce company resources and achieve your objectives.
Read on to learn about the strategic management process, understand how it can help your team achieve its goals, and learn about the five steps your team can use to plan, implement, and evaluate your strategy.
- What is the strategic management process?
- The importance of the strategic management process
- Steps to the strategic management process
What is the strategic management process?
The strategic management process refers to the ongoing task of defining your company’s strategy to achieve better performance. It involves setting high-level goals and allocating resources to execute plans of action. It’s one of many effective tactics leaders can use to gain an advantage over their competitors.
The importance of the strategic management process
The strategic management process is important because it can help leaders plan for a company’s future and sets the direction for employees. Some of the benefits of implementing the strategic management process include:
- Better strategic decision-making: Using the strategic management process will help you make better decisions for your team. The strategic management process will help you understand the impact of each decision you make by forcing you to think deeply about how your choices impact the present and future of the company.
- Motivated employees: When employees understand how their hard work contributes to the success of the company, they will feel motivated to be productive. Strategic management forces company leaders to determine why each project is important and allows employees to rest assured that their continued efforts are moving the company forward. Managers can even determine a list of company goals and values and hire employees whose skills and interpersonal skills directly align with what they want to achieve.
- Higher company profits: When you plan based on the actions of competitors and consider the company’s future operations, you’re bound to increase company profits. An effective strategic management process should help leadership make decisions that optimize profits using the company’s available resources.
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Steps to the strategic management process
- The planning process
- The strategy formulation
- The strategy implementation
- The strategy execution
- The tracking process
1The planning process
- Establish clear goals: The team or organization must begin by establishing clear and realistic goals. During the first stage, craft a vision statement for your team and company and determine which area of the business you plan to focus on. Set high-level strategic objectives that will guide the rest of the planning process. Ensure your goals are SMART: strategic, measurable, achievable, realistic, and time-bound.
- Conduct strategic analysis: Strategic analysis is the process of researching your business to determine how it can thrive within the environment it operates. Gather as much data and information as you can at this stage. Determine what resources the organization currently has and identify where the company could outsource help externally. At this stage, clarify your goals and determine your company’s why.
- Identify opportunities and risks: During the planning stage, you may choose to complete a SWOT analysis to determine your organization’s strengths, weaknesses, opportunities, and threats and to evaluate your company’s competitive position. Identify this information by talking with customers, conducting a competitive analysis, looking at external factors like economic changes, government policies, and new technological developments, and reviewing the strategies of companies that have business models similar to yours.
Check out Fellow’s SWOT analysis meeting template and our strategic planning meeting template to kickstart strategy conversations with your colleagues.
2The strategy formulation
- Allocate resources: A business can only succeed if it has the resources required to reach its objectives. Resource allocation is the process of assigning and managing assets in a way that supports a company’s planning goals. During the first part of this phase, identify what resources must be obtained and what goals are priorities at this time. Determine how you can maximize the use of the resources you currently have on hand to get the best return on your investment.
- Create an action plan: Once you’ve determined what resources you have and what you need to acquire to move forward, create a plan of action. Outline how your company will achieve its goals and gain buy-in from internal and external stakeholders. Your action plan should include several specific, small tasks that, when executed, lead to the next phase. At this step, create an action plan timeline that shows the full duration of the plan you’ll use to achieve all outlined objectives.
- Define your KPIs: Key performance indicators (KPIs) are targets that can help you measure progress against your strategic objectives. Select KPIs that relate directly to your business goals and prepare to iterate as your business changes. In combination with other metrics, your KPIs should provide a comprehensive view of your team or company’s performance. However, be sure to avoid KPI overload by focusing on only the most impactful measures.
3The strategy implementation
- Communicate the strategy to the company: Buy-in from employees is key at the third stage of the strategic management process. Begin propelling your organization toward its objectives by explaining to your teammates how the process will work. Set a company or team-wide meeting to present the new strategic process you’ve developed and communicate the vision. During the meeting, describe the contribution you want the group to make using the strategy. Do so by articulating the impact of the strategy on customers, stakeholders, and the community. Host a Q&A session for employees at the end to answer any lingering questions or to clarify the process.
- Delegate roles and responsibilities: Assign duties and responsibilities to employees that align with team and individual strengths. Once you have assigned roles, define clear expectations. Ensure that each person contributing to the overall goal has a good understanding of the project’s desired outcome. To make this process simpler, try assigning, organizing, and prioritizing all your meeting action items in one place with Fellow! To learn more about how to assign tasks and projects to your teammates, check out our blog post on how to delegate effectively!
- Monitor progress: As employees begin to implement pieces of the strategy, monitor progress closely to ensure that everything begins on the right track. Compare your progress against the metrics you determined in the second phase. Refer back to your KPIs often to interpret the results.
4The strategy execution
- Implement the strategy: In the fourth phase of the strategic management process, execute your plan. At this time, leaders must determine whether the team is meeting its defined goals. If there are issues, leadership must then reevaluate and make the necessary changes to the plan. The entire team or organization should be well on its way to implementing the plan and everyone should have a good handle on their tasks.
5The tracking process
- Evaluate your strategy using defined metrics: At the fifth stage of the strategic management process, measure your progress against the metrics you defined in the first stage.
Objectives and key results (OKRs) are a collaborative goal-setting methodology used by teams to set ambitious goals. With your plan in full swing, use OKRs to add new objectives and creative goals for departments, teams, and individuals. Specify what you want to achieve next and determine benchmarks that are specific and measurable.
- Make changes: Strive to be adaptable and adjust to changes as needed. There are two types of changes you might make at this stage: adaptive changes and transformational changes. Adaptive changes are small gradual changes you’ll make to evolve your workflow and strategy over time. Transformational changes are larger in scale and may signify a shift from your original plan.
As you track the progress of your goals, you must pivot and respond to new priorities with ease. Go through each action item you set for members of the team and record the extent to which the group has completed or achieved the item. Conduct performance measurements, ask teammates about issues, and take corrective measures accordingly.
The strategic management process is one way that businesses can remain competitive, manage company resources, and achieve ambitious goals. Follow the five steps of the process to establish objectives, execute your action plan, and monitor your team’s performance.
At Fellow, we believe that effective processes begin with great meeting habits… and great tools! Host amazing meetings and end every strategy session knowing who is doing what by when with Fellow. Empower your teammates to build collaborative meeting agendas, host productive team meetings and one-on-ones, record decisions, and hold each other accountable using our tool. Before you know it, the strategic management process will be another piece of your team’s workflow and you’ll be achieving company-wide goals at an unprecedented rate.