What is strategic management?
The definition of Strategic management consists of a set of practices that aim to control a company in a more intelligent and predictive way . Furthermore, it is based on the analysis of data and information that help to understand the scenario in a more detailed way, so that decision making is more efficient.
Characteristics of strategic management
Among the main characteristics that define strategic management in a company, we will highlight the two most relevant. Check out!
1-Data based management
The elaboration of a strategy, whatever it is for whatever purpose, depends on the information that is available about the subject. As in a chess game, you have to look at the board, see how the pieces are organized, know how each one moves, and only then can you anticipate your opponent’s moves and elaborate your next moves.
2-Involvement of all sectors
A very common mistake in companies that are beginning to adopt strategic management is to think that actions can be concentrated in just a few sectors, when the correct thing is to have strategies drawn up in all of them.
Thus, it is interesting to have a strategic HR , who knows how to deal better with people, in addition to marketing and sales that optimize efforts and increase the customer base, an administrator who makes smarter purchases and manages inventories more efficiently. and so on.
What is the importance of strategic management for the business?
If we had to summarize the benefits of strategic management of a company in one word, it would be optimization . Optimizing is making something great, doing it in the best way, with the lowest cost and the best result. In this sense, the strategy allows the identification of where and how processes can be improved.
Returning to the parallel with chess, it is as if the company were playing a game without any criteria and started to consider the next moves before acting. The chances of arriving at checkmate are much greater and piece losses along the way can be reduced.
How to implement strategic management in the company?
The management strategic business is something that takes time and dedication to be implemented. In the following topics, we will list some of the most important steps to be followed to have a more strategic management in your company.
Don’t go to the pot too thirsty. Understand that many changes will be needed in people’s routine and this requires time for adaptation and even for acceptance by everyone involved.
A good tactic is to start by adopting a more strategic management in HR , as the improvement in the efficiency of sub processes in this sector helps to have employees better prepared for the changes that are to come.
2-Diagnose all processes
Even before working effectively with the elaboration of strategies, it is essential to understand the current scenario in depth . At this point, the most important thing is to know how the company’s processes are being developed, what are the main difficulties encountered and what results have been obtained.
The development of a strategic HR or any other sector must go through this diagnosis. It is from there that the first data is collected and the initial decisions will be made.
3-Define what will be measured from the start
Implementing strategic tools can be quite exciting, which requires attention to some details. The most relevant is to limit the scope of each phase of the project. It’s very easy to start seeing so much data and information available and want to measure and track it all. But this is unfeasible.
So have a plan well established from the beginning. Leave it defined what will be measured in the first months and only after having one stage of implementation stabilized, move on to the next. This helps maintain positive results and avoids deviations and distractions, both for employees and managers.
4-Choose the most suitable tools
Management tools are not lacking to have a more strategic company. But each scenario will demand the use of specific types, some of which are quite common and useful for the vast majority of cases. See some examples.
SWOT analysis is an excellent tool to be used in the diagnosis phase, both at the beginning of implementation and at the beginning of new stages. It is a methodology that aims to analyze 4 different points:
- (S) Strengths: what are the strengths of the business, the best it has to offer the market;
- (W) Weaknesses: what are the main weaknesses, what it needs to improve to better meet your demands;
- (O) Opportunities: what are the opportunities that the market offers for the company and the possibilities for the future;
- (T) Threats: who are the competitors and elements of the external environment that threaten the company’s success and that need to be avoided or dealt with.
The 5W2H is another tool widely used in the initial stages of implementation of any type of project. It allows for the detailing of the actions that will be developed and serves as a follow-up guide throughout the process. Typically, a spreadsheet is created that has the following columns to be filled in:
- What: what will be done, usually starts with an infinitive verb;
- Why: because, explains the reasons for the action that will be performed;
- How: how the action will be developed, usually starts with a verb in the gerund;
- Where: where this action will be developed;
- When: when it will be done and by what deadline;
- Who: who is the person responsible for the action;
- How much: how much this action will cost the company.
- (P) Plan: design the plan to be followed, considering data and information;
- (D) Do: execute the plan in accordance with the defined specifications;
- (C) Evaluate: collect information about the results obtained, check what went or didn’t go as planned;
- (A) Act: based on the evaluation, decide what will become effective in the company’s routine and what needs to be reviewed for the beginning of the next PDCA cycle.
As already mentioned, the strategic management of people plays a fundamental role in the company as a whole. This is because the impacts reflect on employees, enhancing the actions of each sector. In this sense, People Analytics is extremely important, as it is premised on the use of statistical data from employees for decision-making, both by HR and area managers.
5-Automate key processes
Each company has its most important processes, those that are directly related to the business and that generate the most impacts. In order to have a more strategic management, it is interesting to leverage these processes with the help of technology.
After all, automation is a solution that provides gains in productivity, reduced time and increased business profitability.
6-Establish a management routine
Strategic management, above all, requires constant monitoring . It’s no use buying top-of-the-line software and investing tons of money in it if people don’t feed it and don’t use the information generated in a coherent way. But employees and, above all, managers must be prepared for a new routine .