It is common to see organizations setting up ambitious growth plans and then subsequently fail to meet the set targets and objectives. This persistent gap between ambition and performance arises from the disconnect between strategic planning and strategic execution.
While most fail to meet their strategic goals, some organizations achieve significant improvements and great results each year while maintaining their strategic vision.
There is something significant that is common amongst these successful organizations.
The business in the post-COVID world
COVID-19 has changed things, forever. The world is dealing with a severe health crisis. The world of business, specifically, has had an unprecedented shift in its modus operandi. No economy or organization, worldwide, seems to be unscathed.
The consequences of the outbreak of this disease caused by the Coronavirus reach far, wide, and deep. The only certainty about the global economy is that it is uncertain. This uncertainty is debilitating.
The internal and external environments of an organization have seen a significant change in a short span. The scope of such changes span all the areas of the business - consumer behaviour, market competition, business forecasts, mode of operations, and the workflow.
It is at such times of uncertainty that an economy or an organization needs to re-evaluate its purpose, direction, expectations, and operations. It needs to re-assess its goals, strategy, and the process of management.
So, how can an organization do that?
The Office of Strategic Management
Every successful organization has, at the corporate level, a unit to foresee all the above-listed activities. It is, typically, called OSM (Office of Strategic Management).
The Office of Strategic Management firstly analyses and formulates a strategic plan for the organization. Then it takes on the leadership role to ensure the successful, goal-aligned execution of the said plan by communicating, monitoring, managing and evaluating all the activities related to plan laid out by the strategic planning unit.
"But wait, what is Strategic Management, anyway?", you might ask.
Strategic Management is the art and science of developing an effective strategy to implement the decision of an organization to meet a set of pre-defined objectives. It is a continual process of managerial decision encompassing analysis, formulation, execution, and evaluation of a strategy to achieve a set of goals.
The OSM manages the strategy related operations in the organization by focusing on integrating different departments of an organization, such as production and operations, management, marketing, finance, R & D, and information systems to achieve organizational success.
The role of OSM
The Office of Strategic Management follows a 5-step model of operation to help the organization gain strategic competitive advantage in the market.
- Goal Setting,
- Environmental Analysis
- Formulation of Strategy
- Execution of Strategy
- Evaluation and Control
This 5-step process is ongoing and the OSM will re-visit these steps as and when required to make the necessary changes.
Step 1: Goal Setting
(Specifying the vision, goals and long-term objectives)
In the first Step, the Office of Strategic Management establishes the strategic intent of the entire process by setting a set of goals and answering the question: 'Where is the organization headed to?'.
The set of goals that OSM enlists have a far-reaching impact on the long-term objectives of the organization. It sets the direction for the organization. It acts as the unifying force for every department at all the levels of the organization. It provides a vision for the organization and sets the direction for the business and its workflow.
The Office shares these goals with all the departments and its members involved at each level of the organization. It gives provides clarity and a sense of purpose to all the members to take part in the processes of business, pro-actively.
Step 2: Environmental Analysis
(Exploring opportunities and identifying the challenges by analyzing the internal and external environment.)
In this Step, with the goals and objectives clearly defined, OSM sets its focus on gathering all the relevant data that concerns the organization.
This data is highly essential for it governs the efficacy of the strategy to be laid out in the next Step. This information helps the Office better understand the internal and external environment of the organization.
Since these environments are continually evolving, OSM strategically analyses them to determine the efficacy of future programs.
All the above undertakings by OSM, including the processing of data and the analysis of information, allows it to thoroughly analyze the competitive environment outside and the operational environment inside the organization. This Step answers the 2nd question: 'Where does the organization stand right now?'.
Step 3: Formulation of Strategy
(Devising the final strategy and generating alternative strategies to face the challenges)
In the 3rd Step, the focus of the Office is to devise a strategy to help the organization navigate its way through the unchartered territory.
The Office reviews the information collected in the previous Step to determine the market opportunities and impending challenges. It also reviews the available resources, core competencies, and the strengths and weaknesses of the organization.
Then the Office formulates the final strategy and communicates the same to all the departments of the organization, providing cohesiveness to the involved teams along the way to achieve the defined objectives.
Considering the dynamic nature of the organization's environment, the Office also devises a set of alternative approaches or strategies for each stage of the plan.
This Step answers the question: 'How can the organization achieve its goals?'.
Step 4: Execution of Strategy
(Overcoming the obstacles by making use of the strengths and core competencies)
Execution of the strategy is critical to the success of the business in fulfilling its long-term objectives. The successful implementation of the formulated strategy will ensure a competitive advantage for the organization.
In this Step, the OSM relies more on managerial skills instead of analytics. It ensures that everyone within the organization is clear of their duties and responsibilities and that everyone plays to the best of their strengths. The cooperative play of strengths adds up to the overall performance towards goal achievement.
Additionally, the Office secures access to all the relevant resources required for the execution of the strategy. The strategy facilitates the use of the organization's strengths in line with its core competencies to overcome the obstacles along the course of the business.
This Step of the process answers the question: 'How is the organization navigating its way to the goal?'.
Step 5: Evaluation and Control
(Re-assessment of the process through performance assessments, consistent review and taking control actions through enforcement of corrective measures)
In the final Step, the progress and performance of the plan are monitored, evaluated, and managed.
The Office strategically monitors every process involved and action taken by each department and measures its alignment to the pre-defined strategic goals and long-term objectives of the organization. Unexpected shifts in the strategy are evaluated, and required tweaks and adjustments are made to bolster the overall plan.
With the nature of the internal and external factors being fluid, the strategies laid-out may not produce the desired outcomes. Here, the Office exercises control by taking remedial/corrective measures and modifying the strategies, if required.
Such reviews and revision are carried out consistently to ensure the success of the implementation of the strategies.
This is the final Step of the process. It answers the question: 'What can the organization do to perform better?'.
The goal of strategic management is to make the collectively combine the strengths of every member of the organization and make it productive.
Peter F. Drucker, in his book The Effective Executive, wrote that “to make strength productive is the unique purpose of the organization”.
Instead of trying to overcome the weaknesses, the collective strength of the organization can make them irrelevant. The strength of every member of the organization can serve as a building block for effective joint performance."
This collective strength of the organization needs to be managed effectively and efficiently to meet the challenges of the ever-changing business environment. Strategic Management allows the organization to do that.
Success today does not guarantee success tomorrow. It brings along a unique set of problems and challenges. Complacent organizations that ignore them or refute them experience demise.