If you run a business, you need a strategy—and if you have a strategy, it needs managing. It’s that simple! Whether you’re a sole trader or a global corporation, strategic management is a must. But not everyone thinks so.
In recent years, with volatile markets and new tech popping up daily, the focus moved from long-term planning to a more flexible, ‘try it and see’ approach, especially amongst tech start-ups. The theory? It’s better to remain unattached and open to new things rather than plan ahead.
Unfortunately for the more relaxed among us, the research doesn’t back this up: the better companies are at strategic management, the better they do. In fact, done well, the strategic management process has agility and flexibility built in, so you really don’t need to choose one approach or the other. Planning ahead is the clear winner.
Strategic management is the map that guides a company from point A to point B, ensuring it adapts, survives, and thrives.
It involves making clear goals, knowing what other companies are doing, understanding what your company is good at, and putting plans into action. It’s about making smart choices and being ready to change those choices if needed to help the company grow and flourish in the long term.
But before we discuss why you need one (and what happens when you don’t), let’s take a quick look at some common mix-ups.
While strategy outlines the plan for achieving objectives, strategic management is about making sure these plans are effectively implemented, managed, and adapted over time. It integrates strategy into the organization’s day-to-day tasks, keeping every part aligned with the overall goals.
TL;DR: strategy sets the destination, and strategic management navigates the journey.
| Aspect | Strategy | Strategic management |
| Definition | A plan of action designed to achieve a long-term or overall aim. | The ongoing process of implementing, monitoring, and revising strategies. |
| Focus | Developing a broad approach to achieve objectives. | Overseeing and guiding the entire strategic process. |
| Scope | Concerned with the direction and scope of an organization. | Encompasses all activities from planning to execution and review. |
| Process | Involves setting objectives, analyzing competitive environments, and evaluating strategies. | Involves strategic planning, execution, monitoring, and adjustment. |
| Goal | Defining the long-term direction and goals of the organization. | Ensuring the organization’s strategy is effectively implemented and adjusted to changes. |
Strategic planning is a subset of strategic management. It’s the process of making sure a company has what it needs to achieve its goals. While strategic planning lays out ‘what’ and ‘why,’ strategic management addresses the ‘how,’ ‘when,’ and ‘who.’
| Aspect | Strategic planning | Strategic management |
| Definition | Deciding the main direction and resource allocation. | Putting plans into action and adjusting them. |
| Focus | Setting priorities and goals. | Executing, monitoring, and revising plans. |
| Scope | Narrower; primarily involves the creation of the plan. | Broader; involves the entire process from planning to implementation. |
| Activities | Defining strategy, setting goals, and allocating resources. | Executing plans, monitoring progress, and revising strategies. |
| Outcome | Creation of a plan for future success. | Continuous alignment of the company’s strategy with goals amidst changes. |
Operational management focuses on the day-to-day execution of tasks and processes that produce the organization’s goods or services. It’s concerned with maximizing efficiency and effectiveness, ensuring the business runs smoothly day-to-day. Strategic management, in contrast, takes a broader view.
Operational management includes (among other things):
| Aspect | Strategic management | Operational management |
| Definition | Overseeing the broad goals and direction of an organization. | Managing day-to-day activities to ensure smooth operations. |
| Focus | Long-term planning and overall vision of the organization. | Efficiently running daily operations and processes. |
| Scope | Broad, encompassing the entire organization. | Specific, dealing with particular functions or departments. |
| Timeframe | Long-term, focusing on future direction and sustainability. | Short-term, focusing on current and near-future activities. |
| Goals | Setting and achieving long-term objectives, adapting to changes. | Ensuring efficient and effective operation and problem-solving. |
Tactical planning is about the short-term actions that are derived from and support the broader strategy set by strategic management.
It involves creating specific, actionable steps that are designed to achieve parts of the larger strategic plan. Tactical planning is focused on the near term, often covering weeks to a few months, and is more about the ‘how’ of the immediate tasks and projects. It’s the bridge between strategic objectives and day-to-day activities, translating ambitious goals into manageable tasks.
| Aspect | Strategic management | Operational management |
| Definition | Overseeing the broad goals and direction of an organization. | Managing day-to-day activities to ensure smooth operations. |
| Focus | Long-term planning and overall vision of the organization. | Efficiently running daily operations and processes. |
| Scope | Broad, encompassing the entire organization. | Specific, dealing with particular functions or departments. |
| Timeframe | Long-term, focusing on future direction and sustainability. | Short-term, focusing on current and near-future activities. |
| Goals | Setting and achieving long-term objectives, adapting to changes. | Ensuring efficient and effective operation and problem-solving. |
The strategic management process can be broken down into five key stages.
First things first. Where do you want to go? Effective goal-setting involves understanding what your organization stands for and what it wants to achieve. For this, you’ll need your company mission, vision, and long-term objectives.
Begin by revisiting and deeply understanding your organization’s mission and vision. These are values that encapsulate the essence of what your organization is and aspires to be.
Think about how your goals can reflect and advance these fundamental principles in the long term. These values act as a guiding compass and should be evident in every goal you set. For example, if ‘innovation’ is a core value, your goals should reflect a commitment to new ideas.
You need to know what you’re working with and what you’re up against. This involves looking inside your organization to understand your strengths and weaknesses and looking outside at the market and competitors to identify opportunities and threats. A SWOT diagram will come in handy here. Use a template to make the process headache-free.
Don’t forget your customers. Work your way through customer discovery to (re)assess any opportunities that lie in that direction. You may not need to start from scratch here, but be sure to include customers in your analysis phase.
Here’s where you map your route. Based on what you’ve learned from your analysis, you work out how you’re going to reach your goals.
This could involve diversification, market penetration, product development, partnerships, cost leadership, or differentiation strategies, among others. The secret is to generate multiple options that align with the results of your SWOT diagram.
Not every strategy you mastermind will be viable. So as part of this step, you’ll need to critically assess the pros and cons of each option. Considerations include feasibility, value alignment, resource availability, market trends, and potential risks and rewards. Ask around so you get a range of perspectives and insight. Once you’ve gathered all you need, run it past management and decide on a strategy or mix of strategies that will best serve your goals.
Finally, as part of this stage, address the two Cs: contingency plans, and organizational communication.
Contingencies, aka your ‘plan B’, will keep you resilient and adaptable when something unexpected happens. Communicating your chosen strategy and its rationale is essential for alignment and buy-in at all levels. This might involve formal presentations, written documents like a business case, and discussions with key teams and individuals.
Now, it’s time to put all that planning into action. The implementation stage involves allocating resources, assigning tasks, and making sure everyone in your organization knows what they’re supposed to be doing.
Using project management software can make this stage a lot easier. Instead of creating spreadsheets and sending out emails like wedding invites, simply add all your deadlines and tasks to a cloud-based timeline, then assign tasks and let the software do the heavy lifting when it comes to tracking.
As you move along, you need to check you’re still on the right path. This stage is about monitoring your progress, comparing it with your plan, and making adjustments like the captain of a ship. Maybe you’ve hit some unexpected challenges, or maybe there are new opportunities you hadn’t considered before. The more you check, the more you’ll know.
Now that you know the five steps, let’s examine how good strategic management might be applied in the real world. Our example is focused on an imaginary tech company.
Situation analysis: The company starts by looking closely at what it’s good at and what’s going on in the market. It realizes it has a great research and development team and a solid brand, but it also sees that the tech world is changing fast and there’s a lot of competition.
Goal setting: With this info in hand, they decide they want to grab a big slice of the sustainable computing pie in the next five years. Sustainability is one of their core values, so this fits with the brand. They plan to stand out by creating top-notch, energy-efficient products and being known as a company that cares about the planet.
Balancing optimism and realism in goal setting: Setting your sights on the stars is great, but you need a rocket to get there. When setting goals, balance your optimism with realism. Dream big, but make sure your goals are grounded in what’s achievable. Our tech company considers its resources, market conditions, and past performance to work out how to balance goal-achieving with everyday operations.
Strategy formulation: They decide to pour money into research and development to come up with innovative, green technology. They also want to kick off a marketing campaign to show off their commitment to sustainability and the cool features of their products. To keep costs down, they decide to work with individual freelancers rather than working with an agency.
Sharing the message: Communicating the strategic plan isn’t just about sending a cc-whole-company email. It’s about ensuring every team member understands their role in the journey. So our fictional tech company orders pizza and has a company-wide kickoff event to generate excitement and buy-in. And because they know communication is a two-way street, they hold a Q&A session after and provide various ways for attendees to share thoughts post-meeting, including anonymously.
Implementation: The company starts to change to support this new direction. They put more resources into their research team, work with suppliers who provide sustainable materials, and train their salespeople to explain why their products are different and better.
Evaluation and control: This isn’t like launching a fireworks display. The project needs lots of TLC along the way. So, our tech company monitors progress by tracking metrics and gathering feedback. They also stay alert to any changes in the market and are ready to tweak their approach if needed.
Outcome: After implementing this strategy, the company launched a line of well-received sustainable computing products. Over time, they started to capture more of the market and became known as a leader in the space. Their reputation for being innovative and eco-friendly boosted their brand and set them apart from competitors.
Strategic management can feel daunting. Luckily, there are a few secret weapons (aka frameworks) to help you track, set, manage, plan, and analyze all that data.
We’ve already mentioned SWOT analysis in this article, so this is just a reminder. You assess your organization’s Strengths and Weaknesses (the internal stuff) and the Opportunities and Threats in the environment (the external stuff). It’s a straightforward way to understand where you stand and what you’re up against.
Porter’s Five Forces helps you look at the competitive forces in your industry: the rivalry among existing competitors, the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, and the threat of substitute products or services. It’s all about fully understanding the pressures you face and how to position yourself effectively.
It stands for Political, Economic, Social, Technological, Environmental, and Legal factors. By looking at each of these situational areas, you can get a sense of the bigger picture and how these external factors might affect your organization. A bit like checking the weather before setting off on a walk.
The Balanced Scorecard is a framework for measuring an organization’s current performance and its progress toward specific goals. The BSC model evaluates business operations from four perspectives — financial, customer/stakeholder perspectives, internal processes, and learning and growth. It helps you look beyond traditional financial measures and consider other important perspectives, helping you juggle different needs while preventing you from focusing too much on one area at the expense of others.
Imagine taking apart a clock to see how all the pieces fit together and work in harmony. Value chain analysis is like doing that with your organization.
You break down the activities that create value and products for your customers — from raw materials to production to marketing and beyond. The goal is to see how each part of your company contributes to the overall product and where you can make improvements. Maybe one gear in the clock isn’t working efficiently, or there’s a way to make the whole thing run smoother and faster. By understanding each step in your value chain, you can tweak and improve your processes.
Strategizing is exciting, sometimes challenging, but absolutely worth it. Here are some tips to help you along the way.
Remember, your strategy is a living, breathing thing. It’s important to have a clear plan, but be ready to adapt as you encounter new information or changes in the environment.
Strategic management isn’t a solo sport. Get input and buy-in from across your organization. Different perspectives bring valuable insights and help keep everyone pulling in the same direction.
While it’s important to focus on the here and now, don’t lose sight of the future. Trends, technologies, and market landscapes can change quickly, and you’ll want to be ready to pivot and seize opportunities as they crop up.
Make sure everyone knows not just what the plan is but why it’s important. Good communication aligns efforts and can inspire your team to push towards common goals. Invest some time setting out a plan for communication channels, and brush up on your organizational communication skills to get the word out loud and clear.
Set up ways to track your progress. Regular check-ins and assessments can help you understand what’s working, what isn’t, and where you might need to make changes. Think of it as your project’s health check.
Look at case studies and talk to peers in your industry. Understanding how others have navigated their strategic challenges can give you useful insights and inspiration for your own journey.
Don’t forget to acknowledge and celebrate the milestones along the way. It boosts morale and gives everyone a moment to reflect on what you’ve achieved and where you’re headed next.
Project management software and diagramming tools are the strategic manager’s secret weapon. Rather than juggling spreadsheets, various document versions, and sending emails like there’s no tomorrow, these tools keep it all in one place.
Better yet, many of them offer automation capabilities, meaning things like task tracking and notifications happen with zero input from you (and your team). It’s just one less thing to think about.
Remember, strategic management is more of a marathon than a sprint. It’s about setting a steady pace, being prepared for different terrains, and enjoying the journey as much as the destination. With these tips in hand, you’re well on your way to successfully navigating the strategic landscape. Happy travels!
