Strategic Mindset: 3. Why Strategic Management Matters

Apr 9, 2024 | Uncategorised

How to Follow a Strategic Management Process in Four Steps
  • Step 1 – Strategic Intent
  • Step 2 – Strategy Formation
  • Step 3 – Strategy Implementation
  • Step 4 – Strategy Evaluation

A business without long-term goals and objectives will struggle to set company direction, focus efforts, and gain a competitive advantage. To set and achieve these goals, it’s crucial to understand what strategic management is and why it’s paramount for success.

What is Strategic Management?

Strategic management is the ability of an organisation to formulate and implement major goals and initiatives on behalf of its stakeholders. It involves shareholders, executives, employees, customers, communities, and suppliers. At its core, it’s the management of resources to successfully achieve goals and objectives, providing overall direction and a competitive edge.

Why is Strategic Management Important?

Strategic management is vital for organisations, irrespective of size, from both financial and non-financial perspectives. It helps move past short-term thinking, fulfil responsibilities (especially for listed companies), and establish and monitor progress against long-term plans. The benefits extend to forecasting, planning timely decisions, and preparing for future opportunities and risks.

Benefits of Strategic Management:

Financial Gains: In a disruptive marketplace, strategic management contributes to a solid bottom line by enabling executives to forecast, plan, and make timely business decisions.

Workplace Motivation: Setting effective employee goals aligned with organisational objectives improves overall performance. Studies show a dramatic increase in performance when goals align.

How to Follow a Strategic Management Process in Four Steps

Step 1 – Strategic Intent: Successful execution starts with defining organisational objectives as a benchmark for performance. An organisation’s vision and direction should be specific, actionable, and measurable. Our previous newsletters in January and February covered vision, mission, values and goals. Future articles will cover the next steps: Strategy Formation, Implementation, and Evaluation.

Step 2 – Strategy Formation: This involves a SWOT analysis, examining internal and external factors. Organisations identify strengths, weaknesses, opportunities, and threats, developing strategies to outcompete rivals and respond to market conditions.

Step 3 – Strategy Implementation: Putting the organisational blueprint into action requires developing structures, allocating resources, overseeing change management, and strengthening competitive capabilities. Execution allows the exploration of new opportunities and aligns people, strategy, and operations.

Step 4 – Strategy Evaluation: Analysing and assessing results achieved through the strategic process. Periodic reviews allow organisations to adapt to changing market conditions and determine the effectiveness of their strategy.

Embark on a strategic management journey to unlock the full potential of your business. Stay tuned for detailed insights in the coming months. In case you missed our recent newsletters on vision, mission, values, and goals, catch up for a comprehensive understanding by clicking on the links below.

Strategic management isn’t just a process; it’s the roadmap to your business’ success.