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Welcome to our latest article series where we deep-dive into a number of linked topics on strategic management.

Firstly, we’ll take a look at what strategic management actually is, before moving on to look at the most commonly used strategic analysis tools: PESTLE, SWOT, Gap Analysis, Porters’ Five Forces and Benchmarking (with the use of a strategy canvas.)

So firstly, strategic management may be a term that we hear regularly, but what exactly does it mean? Do businesses use it correctly, or has it become an accidental synonym for ‘general management’?

What is strategic management?

When an organisation talks about having a strategy, it is talking about having a long-term view and developing a way forward which it will share with its employees and stakeholders. It does this by implementing a strategic process, and by managing it carefully. To be successful, any strategy must be kept alive with effective management. It must be embedded into daily processes, reporting and the overall business culture so that everyone on the organisation is on-board with the direction and understands their role in achieving the strategy.

How far ahead do strategies look?

Organisational strategies are long-term by nature, but their time-frames have decreased in recent years. Once, business strategies of 5-10 years were common, but today they may only be set with a 1-3 year timeframe. This timeframe will depend on the industry in which the business operates. As an example, tech-driven industries, or those which rely on product innovation, usually need to have shorter timeframes to reflect rapidly changing competitive markets.

What makes a successful strategy?

The key to success lies in following each of the steps above carefully and correctly. Of course, it’s one thing to state, but another entirely to deliver it! Business strategy is notoriously complex because organisations are complex entities. A business strategy attempts to simplify this complexity and to set the entire organisation on the right path to success. However, oftentimes this very attempt to be strategic can become confusing and errors creep in.

Why do strategies fail?

Most organisations are good at planning ahead and talking about their plans with their employees and stakeholders. But many fail to implement and evaluate strategies correctly, or to make necessary adjustments on an ongoing basis in order to stay on course. We mentioned that a successful strategy is a living thing, and this is a challenge for many businesses, who view it as a standalone piece of work that happens at an annual board meeting and then is forgotten about it in favour of daily operational activities!

A common – but misquoted – industry saying says that 90% of strategies fail, but statistics prove (and we have found ourselves) that this 90% failure rate occurs specifically at the execution and implementation stage. The reality is that most strategies are excellent and a great deal of time and effort are put into formulating them, writing them up and then sharing them. At this point, there is a great passion and excitement for taking the strategy forward… and then everyone leaves the board room and the paperwork gets put on a shelf until the following year!

For success to occur, the strategy needs to be worked according to a defined process and it needs to be embedded into the very fabric of the organisation so that it defines the way that every resource is allocated, and ever priority is set.

What is strategic management?

When we talk about strategic management, we are discussing a process – which it does have in common with any other kind of regular operational process.

All management processes involve planning, implementation, monitoring and assessment. A strategy is no different. Plans need to be put into place, tasks have to be delivered in a certain order and managers have to evaluate the outcomes.

However, where a strategic process differs from an operational process is by its nature. A strategic process is imperative to the success of an organisation; it defines what is important, prioritises activities and resource allocation and sets the course of the business.

What does a strategic process comprise?

Every organisation will approach its business strategy in a slightly different way, but it will usually have seven key areas:

  1. Vision/Mission/Purpose
  2. Strategic Priorities (Research)
  3. Formulation of Objectives
  4. Measures and Targets
  5. Projects and Actions
  6. Communication and Ownership
  7. Automation

Some businesses choose to create their own strategic processes, but we find that most will successfully use tried and tested approaches such as the Balanced Scorecard. Other useful methodologies include the Blue Ocean Strategy, OKRs and the Strategy Diamond. A structured strategic process will be effective in guiding the detail that needs to be gathered to create the strategy, put it in place, review it and then evaluate its success.

To find out more about each of these stages, we’d invite you to review our resources.

Strategic tools

In our next article, we will take a look at a valuable and popular strategic tool; the PESTLE analysis. In the meantime, if you would like further information on strategic management, please contact our team. Our strategy consultants work on a flexible basis with businesses and organisations of all kinds, to support their strategy development in a way that delivers maximum value.