What is Strategic Management?

Updated: Aug 19, 2019

There are numerous ways to define strategic management, but most include consideration of the long-term direction of an organisation, typically involving the effective management of people, relationships, finances and other resources.

Most models include the fundamental goals (mission, vision or objectives) that the organisation seeks; the scope of its current and future activities; and the particular capabilities (or competitive advantages) that it possesses in order to deliver on these. An ability to measure performance against agreed objectives is also a key component.

My approach to strategy is strongly influenced by Richard Rumelt’s distinction between ‘Good Strategy’ versus ‘Bad Strategy’. He suggests that any good strategy contains 3 elements: a diagnosis of the situation that the organisation faces, a guiding policy within which all decisions will be taken and a coherent action plan. The last element of this I see as key as it ensures that a strategy is active and dynamic – nobody needs a ‘strategy’ that is simply a stack of printed paper which looks nice on the office shelf.

This shows that an effective strategy is about a coordinated and proactive approach to organising any business or charity in order to address the challenges involved in meeting their aims and objectives. Conversely, bad strategy ignores problems or obstacles – often because it confuses goal setting with problem solving and doesn’t start with a clear diagnosis of the problem(s).

Although it tends to deal with complex issues and decisions, strategic management doesn’t need to be complicated. I like to consider it in simple terms, so am a fan of John Bryson’s model – the ABCs of Strategic Planning as shown below. This was specifically conceived for use in the charitable and public sectors and is based around three simple questions:

A - Where is the organisation now?

B - Where does it want to be?

C - How is it going to get there?

Also writing with specific regard to the not-for-profit arena, Mike Hudson suggests six stages that are necessary for strategic management:

a) A vision – the future it wants to see

b) A mission – its fundamental purpose

c) Strategic objectives – what it wishes to achieve in a given time-frame

d) Performance measures – indicators trustees, managers and staff will use to track progress

e) Strategies – how resources will be deployed to meet stated objectives

f) Annual objectives – specific targets to achieve in the coming year.

Although this is something of a top down approach, potentially hampered by what some organisations rather optimistically refer to as ‘vision/mission statements’ it is a useful checklist because it shows the link between overall aims and those used by individuals in order to ensure that they are working towards the appropriate goals.

And finally……….

What strategic management isn’t is decisions that are taken only by the most senior people, or that only involve the largest amounts of money….


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