Choosing What to Act On
The Strategic Management Process
In the article Sorting Out The Chaos Phil establishes the importance of following the strategic management process if you want to grow your business, become more successful and reduce your stress. In this article Phil describes the first four of the five-stage strategic management process.
1. Start with the Foundations
Like building a house, we need to start with good foundations. In the case of strategic management the foundations of our business are our mission (“why does our business exist?)”, vision “where are we going?” and values “what are the fundamental values that we all hold?”. Without having established these foundations, there is little point in taking strategic decisions because we will have no reference points against which to make them.
2. Establish your starting point
Next, we need to understand where our business stands relevant to its business environment. This includes the general business environment, the competition, our allies, power customers and suppliers, the competition and our internal strengths and weaknesses (SWOT) relevant to these issues. Many people simply ignore the preliminary analysis and dive straight into the SWOT, but this shortcut can be dangerous. Without first understanding your position relevant to all aspects of the internal and external business environment, how can you know what our strengths, weaknesses, opportunities and threats really are?
Okay, so we now have a list of strengths, weaknesses, opportunities and threats relevant to our business environment and our vision. How do we translate the list into a strategy? This is the point where many of us get stuck because what we need to do is not immediately obvious from our SWOT. There is a simple but incredibly powerful technique used by many of the great business strategists called "Force Field Analysis" which can help us understand our SWOT results as forces which either support or oppose our business aims. Its great beauty is that it encourages us to think "out-of-the-box". For example, if we have identified a close competitor during our SWOT analysis, force field analysis can show us how to turn the competitor’s strengths to our advantage.
3. Selecting our options
Having used force field analysis to identify the most effective options open to us, we can now group them together by business area (marketing, finance, people, products etc) and also by timescale (short term, medium term and long term). Using a simple tool such as a spreadsheet to collect and sort the information not only speeds this process but gives us a permanent record of the thinking that led to each option. Now it becomes a straight-forward step to identify the right strategic initiatives in the form of goals which will have been achieved if the strategic actions have been taken.
A word on goals.
We all know the power and usefulness of a list of goals to be achieved. Many of us will have heard of the term "SMART" goals. The smart acronym denotes a list of qualities that a written goal has to have before it can be achieved. There is much debate over what he had coming means. What follows is the clearest and most relevant set of definitions I have found. You will note that I have added an "O" to the end of the acronym.
- Specific ……… Well defined & clear to anyone involved with the project
- Measurable …. You can’t manage what you can’t measure
- Agreed ………. All the stakeholders should support the goal
- Realistic ……... Within the availability of resources, knowledge and time
- Time-bound …. A goal without a deadline is just a dream
- Owned ………. Someone must be responsible, accountable and have the authority to achieve it.
4. Turning goals into actions
If we have translated our strategy into a set of short-, medium-, and long-term goals to achieve in each area of our business, we now need to break each goal into simple, bite sized actions which, when completed will result in the achievement of each goal. This can be done by asking the owner of each goal to come up with a series for his or her particular goals. Obviously, if you are a one man/woman band, you have to do this yourself. Nevertheless, following the process outlined above will help you separate what really must be done from the myriad of things you could be doing.
In his final article, Phil describes how we can create the head room to carry out our strategic action plan, how to get help and how to make sure it all gets done.