What is strategic management
• What we think, know, or believe in is, in the end, of little consequence. The
only consequence . . .. is what we do…. (Haines, 1995).
• Strategic management as a concept is not new.
– The term was first used in the 1970’s, when some strategic
planners more or less thought up strategic programs and then
tried to sell them to decision makers.
• From the 1990’s coming, the view of strategic
planning and strategic management is much
• Now the definition of strategic planning takes us away from the notion that
strategic planning is a staff job and focuses us more on a process that
requires the senior leaders of an organization to set its strategic direction.
• Strategic planning …..is the process by which the
guiding members of an organization envision its
future and develop the necessary procedures and
(Goodstein, Nolan, and Pfeiffer, 1992).
• The concept of strategic management builds on
this definition of strategic planning,
------ recognizing that although planning is the prelude
of strategic management, it is insufficient if not followed
by the deployment and implementation of the plan and
the evaluation of the plan in action.
• Strategic management is a systems approach to identifying and
making the necessary changes and measuring the organization’s
performance as it moves toward its vision.
• It has been defined as a management system that links strategic
planning and decision making with the day-to-day business of
operational management (Gluck, Kaufman, and Walleck, 1982)
The Strategic Management Process
• The five processes of strategic management are:
– strategic planning
– measurement and evaluation.
Role of senior managers/leaders
• It is the responsibility of senior leadership to strategically manage the
– Strategic management is a continuous process rather than a one-time
– Therefore, the senior leaders must become strategic thinkers and leaders
of the organization and its culture, changing it as necessary.
facilitators, coaches, consultants, and consensus-builders.
Transformational leadership is described by Bernard Bass as, superior leadership
performance that occurs when leaders broaden and elevate the interests of their
employees, when they generate awareness and acceptance of the purposes and mission
of the group, and when they stir their employees to look beyond their own self-interest
for the good of the group.
• Acquiring transformational leadership traits requires hard work and
dedication, willingness to take some risks, and internalizing the organization’s
vision and guiding principles.
Benefits of strategic management?
• When an organization is practicing strategic management, thinking becomes
more visionary, which is characterized by:
– Breakthrough thinking about the future; organizational boundaries are more flexible
– A shift in focus from the inputs that are used to run the business to the outputs and
outcomes the organization desires to achieve
– A focus on optimizing organizational performance and process quality as keys to delivering
quality products and services
– A move toward an organizational culture that adapts easily to change.
• With practice, patience, dedication, and hard work, the organizational learning
that takes place through the application of strategic management will bring the
organization closer to realizing its goals and vision.
• With each update of the strategic plan, senior leaders will become better able to
deploy the plan, implement changes, and measure organizational performance.
What is the first step towards strategic management?
• The first step toward strategic management is to develop a
strategic plan for the organization
What is Strategic Planning?
• Process to establish priorities on what you will accomplish in the
• Forces you to make choices on what you will do and what you will
• Pulls the entire organization together around a single game plan
• Broad outline on where resources will get allocated
departments, organizations and businesses to develop blueprint
for action and change
• The process should be community based, inclusive and
participatory to allow for maximum stakeholder involvement and
Why do Strategic Planning?
• If you fail to plan, then you plan to fail – be
about the future
• Strategic planning improves performance
• Counters excessive inward and short-term thinking
• Solves major issues at a macro level
• Communicates to everyone what is most important
Benefits of Strategic Planning
• Defines mission, vision &
• Provides base to measure
• Establishes realistic
goals, objectives &
• Develops consensus on
• Builds strong teams
• Ensures effective use of
• Solves major problems
A Good Strategic Plan should . . .
• Address critical performance issues
• Create the right balance between what the organization is capable
of doing vs. what the organization would like to do
• Cover a sufficient time period to close the performance gap
• Visionary – convey a desired future end state
• Flexible – allow and accommodate change
operational, tactical, individual
• Where are we now? (Assessment)
• Where do we need to be? (Gap / Future End State)
• How will we close the gap (Strategic Plan)
• How will we monitor our progress
Planning to Plan (Pre-planning)
• Discuss the planning phase of strategic planning by
brainstorming on some pre-requisites needed to
undertake the strategic planning process
• Planning to plan requires:
– Organizational readiness
• Recognition of need to plan
• Readiness to plan
– Organizational commitment
• Board commitment
• Senior managers’ commitment
• Staff commitment
– Organizational Capacity
• Human resources
– Board committees
– Special/Standing committees
• Financial resources
– Determine resources
– Identify budget
– Allocate organizational time
– Determine realistic time lines
Strategic Planning Model
Where we are
• Environmental Scan
Where we want to be
How we will do it
Down to Specifics
How are we doing
• Situation –
Past, Present and
• Significant Issues
• Mission & Vision
• Values / Guiding
• Targets / Standards of
• Review Progress –
• Situational Analysis
• Align / Fit with
• Major Goals
• Initiatives and
• Take Corrective
• SWOT –
es, Opportunities, Thr
• Specific Objectives
• Action Plans
• Feedback upstream –
– External assessment (Environmental Scan)
• gathering of information that concerns the organization’s
– Internal assessment
gathering of information that concerns the organization’s
internal operational issues
• analysis and interpretation of this information
• application of this analyzed information in decision making
– Summarize this analysis/assessment with the SWOT model
Internal Assessment: Organizational
assets, resources, people, culture, system
s, partnerships, suppliers, . . .
Marketplace, competitor’s, social
trends, technology, regulatory
environment, economic cycles .
• Easy to Understand
• Apply at any
• Needs to be
• Be honest about your
What are some internal positive things about your organization?
What does the community see as your strengths?
•Strength’s – Those things that you do well, the high value or
• Strengths can be tangible: Loyal customers, efficient distribution
channels, very high quality products, excellent financial condition
• Strengths can be intangible: Good leadership, strategic
insights, customer intelligence, solid reputation, high skilled
• Often considered “Core Competencies” – Best leverage points for
growth without draining your resources
What are some weaknesses in organization?
• What does the community see as your weaknesses?
•Weaknesses – Those things that prevent you from doing what
you really need to do
• Since weaknesses are internal, they are within your control
workforce, insufficient resources, poor product quality, slow
distribution and delivery channels, outdated technologies, lack of
planning, . . .
What are some opportunities in your community or region?
• What are some emerging trends?
•Opportunities – Potential areas for growth and higher
• External in nature – marketplace, unhappy customers with
competitor’s, better economic conditions, more open trading
policies, . .
• Internal opportunities should be classified as Strength’s
• Timing may be important for capitalizing on opportunities
What are some district, regional or national issues facing the organization?
• What are some technology issues that face the organization?
•Threats – Challenges confronting the organization, external in
• Threats can take a wide range – bad press coverage, shifts in
consumer behavior, substitute products, new regulations, . . .
• May be useful to classify or assign probabilities to threats
• The more accurate you are in identifying threats, the better
position you are for dealing with the “sudden ripples” of change
Why create a baseline?
• Puts everything about the organization into a
single context for comparability and planning
• Descriptive about the company as well as the
• Include information about relationships –
customers, suppliers, partners, . . .
• Preferred format is the Organizational Profile
Major Components of the C
Strategic Plan / Down to Action
What we want to be
Why we exist
What we must achieve to be successful
Specific outcomes expressed in
measurable terms (NOT activities)
Planned Actions to
Monitors of success
Desired level of performance
• Captures the essence of why the organization
exists – Who we are, what we do
• Explains the basic needs that you fulfill
• Expresses the core values of the organization
• Should be brief and to the point
• Easy to understand
• If possible, try to convey the unique nature of your
organization and the role it plays that differentiates
it from others
Examples – Good and Bad
To Explore the
Universe and Search
for Life and to
Inspire the Next
Does a good job of expressing the core
values of the organization. Also conveys
unique qualities about the organization.
To Make People Happy
Too vague and and unclear. Need more
descriptive information about what makes
the organization special.
• How the organization wants to be perceived in the
future – what success looks like
• An expression of the desired end state
• Challenges everyone to reach for something
significant – inspires a compelling future
• Provides a long-term focus for the entire