What are the 4 stages in the process of strategic management? Check out the best guide to practice it in 2023
The evolution of strategic management has been observed since the adoption of advanced technology and economic dynamics in the early 21th century. In today’ complex world, new business models emerge everyday.
Soon, traditionally managed methods are replaced by efficient strategic management techniques. The question is whether there is a specific formula for strategic management to win every case.
Indeed, the process of strategic management is not a new concept but how to make it really work out depends on many factors. What managers can do at first is understanding the essential elements of the strategic management process, how it works, then using innovative approaches to adapt strategy in different circumstances.
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What is Standard Process of Strategic Management?
The process of strategic management refers to the set of activities and steps that an organization undertakes to develop and implement a strategic plan. One of the most popular strategic management processes is the Wheelen & Hunger’s Model of SMP, which was published in 2002.
The process of strategic management is an ongoing and iterative process that helps an organization to identify and leverage its strengths, respond to challenges, and take advantage of opportunities to achieve its goals and objectives.
An effective process of strategic management can help organizations to maintain a competitive edge, increase profitability, and achieve long-term success. The process of strategic management has come with multiple approaches, however, there are the 4 most important phases that all management team have to notice.
Phase 1: Strategy formulation
The first stage of the process of strategic management, strategy formulation involves identifying various options and selecting the best alternative course of action. Developing a strategy that outlines how the organization will achieve its goals and objectives, taking into account the competitive environment, available resources, and other factors that may impact success.
- Developing a strategic mission and vision
- Analyzing current situation and market
- Fixing quantitative targets
- Create different plan for each department
Phase 2: Strategy implementation
Strategy implementation is a crucial component of the process of strategic management. It involves translating the strategic goals and objectives into specific actions and initiatives, which leads to better business outcomes and a competitive advantage in the market.
- Developing an action plan
- Allocating resources
- Assigning responsibilities
- Establishing a system of controls
- Building a supportive organizational culture
- Managing resistance to change
Phase 3: Strategy evaluation
Another crucial step in the process of strategic management, strategy evaluation involves assessing the effectiveness of the implemented strategy and determining whether it is achieving the desired goals and objectives.
- Defining performance metrics
- Collecting data
- Analyzing performance
- Comparing performance
- Gathering stakeholder feedback
Phase 4: Strategy modification
Many management teams have ignored this stage, but it is essential to ensure adjustments to the strategy are made after monitoring and evaluating the process, so that it continues to align with the organization’s goals and objectives.
- Analyzing feedback
- Monitoring performance
- Assessing the internal and external environment
- Revisiting the strategic plan
- Adjusting the strategy
The Role of Strategic Planning Manager
An effective process of strategic management cannot lack the role of a strategic management team. They are key leaders who take the best alternative course of action for strategic decision making and execute it successfully.
The strategic planning manager is responsible for developing, implementing, and monitoring the strategic plan to ensure that it aligns with the organization’s mission, vision, and goals.
- Leading the strategic planning process: This involves coordinating with stakeholders, gathering data, analyzing trends, and developing the strategic plan.
- Communicating the strategic plan: This involves communicating the strategic plan to stakeholders, including employees, customers, suppliers, and shareholders, to ensure that everyone is aligned with the plan and understands their role in its execution.
- Monitoring performance: This involves tracking performance against established metrics and comparing it to industry benchmarks and best practices to identify areas for improvement.
- Conducting environmental scanning: This involves assessing changes in the internal and external environment, including changes in technology, regulations, competition, and market conditions, and modifying the strategic plan accordingly.
- Providing guidance and support: This involves providing guidance and support to departments and teams to ensure that they understand the strategic plan and are aligned with its goals and objectives.
- Ensuring accountability: This involves ensuring that departments and teams are held accountable for their performance and their contributions to the strategic plan.
- Facilitating change management: This involves facilitating change management efforts to ensure that the organization is able to adapt to changes in the internal and external environment and implement the strategic plan effectively.
Human Resource in Strategic Planning
HR plays a critical role in the strategic planning process by identifying and addressing the workforce needs that are essential to achieving the organization’s strategic objectives. By aligning HR strategies with the overall business strategy, HR can help ensure that the organization has the right people, with the right skills, in the right roles, at the right time, to achieve its strategic goals.
HR professionals can conduct a comprehensive analysis of the current workforce to identify the strengths, weaknesses, and skill gaps that need to be addressed to achieve the organization’s strategic objectives.
They can forecast the future workforce needs of the organization based on the strategic goals and objectives of the organization, as well as the external environment and trends in the industry.
HR professionals can continuously monitor and evaluate the effectiveness of the HR strategies and initiatives against established performance metrics to ensure that they are achieving the desired outcomes.
How to Overcome Failure in the Process of Strategic Management – 7 Tips
SWOT analysis is a valuable tool for strategic management as it helps to provide a comprehensive overview of the organization’s internal and external environment, identify strategic priorities, guide decision-making, facilitate communication and collaboration, and enable risk management.
SMART goals are a valuable framework for strategic management as they provide clarity and focus, align goals with strategy, enhance accountability, encourage creativity and innovation, and facilitate resource allocation. By setting SMART goals, organizations can improve their chances of achieving success and effectively executing their strategic plans.
Feedback, Survey, and Polls
Asking feedback from employees can improve the strategy evaluation process and facilitate quicker strategy modification. Or engaging all employees in the strategy formulation process is a good way to connect and align employees to the organization’s goals. Using a live survey from AhaSlides can make your feedback collecting and analyzing more productive.
Brainstorm solutions is an effective way to embrace innovation for companies to adapt to the speed of technology change, especially in redesigning strategic management plans. Using high-tech software to manage, track performance can improve the quality of management and performance evaluation.
Building a culture of accountability
Building a culture of accountability, where employees are held responsible for their contributions to the strategic plan, can help ensure that the plan is implemented effectively and that failures are addressed promptly.
Clear and open communication between leaders, managers, and employees is critical to the success of the strategic plan. This includes communicating the plan, objectives, and progress to all stakeholders, as well as ensuring that all employees understand their roles and responsibilities.
Different departments can work with HR to develop and provide useful training courses for employees and lower-level managers to help them equip themselves with more advanced skills and knowledge. For remote training, Online interactive presentation tools like AhaSlides show their best in encouraging employee engagement and interaction.
By following the above guideline, organizations can develop a comprehensive and effective process of strategic management that helps them achieve their goals and stay competitive in a dynamic business environment.