Why Would You Recommend the Institutional is Ing of Strategic Management[1]

8/3/2019 Why Would You Recommend the Institutional is Ing of Strategic Management[1]

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Why would you recommend the

Institutionalising of Strategic Management

through a participative planning workshop?What are the benefits and what agenda

would you follow at the workshop?

By B. W. Murimirwa 1


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Institutionalisation of Strategic

Management

This question was basically asking me

how strategic management can be out

into practice in a participative manner,as well as how and why I would cover

the whole process

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Management

To answer the question, I broke it down into four parts as

follows:

Briefly, what is Strategic Management?

How would you put it into practice in a participativemanner?

What agenda would be followed at the participative

workshop?

Why should Strategic Management be done in aparticipative manner? (What are the benefits?)

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Briefly, What is Strategic

Management?Strategic Management is an ongoing and systematic process

that evaluates, in the long term, the business and industry in

which a company is involved in; assesses its competitors and

formulates strategies to outwit existing (and potential)

competition; and then reassesses each strategy regularly todetermine how it has been implemented and whether it has

succeeded or needs replacement with a new strategy to meet

changed circumstances, new technology, new competition or a

new operating environment. Lamb (1984)

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Briefly, What is Strategic

Management?Stated simply, strategy is a road map by which an organisation

moves from a current state of affairs to a desired future state.

Strategy allows a company to position itself effectively within its

environment to reach its maximum potential, while monitoring

the environment for changes that can affect it so as to makechanges to its strategic plan accordingly. In short, strategy defines

where you are, where you are going and how you get there.

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How would you put Strategic management

into practice in a participative manner?

Although a strategic sense of direction is important for an organisation,it can stifle creativity and its ability to be implemented if not doneproperly a participative strategic planning workshop can helpminimise such adverse effects.

I have taken participative strategic planning in this sense to be the

bringing together all of organisational stakeholders in crafting astrategic plan so that each one participates in the strategic formulationbefore an organisation draws up its strategic plan for implementation.These stakeholders include employees, (senior) management, Board ofDirectors, suppliers and customers were possible all of who areaffected in one way or the other by the firms chosen strategy

A danger of not consulting widely in strategic formulation is thecommon handicap whereby strategies undergo only brief periods ofusefulness or where strategies either tend to be too narrow in focus tobuild a complete corporate strategy on or too general and abstract tobe applicable to specific, practical situations.

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Strategic planning as a formalised business process has been in

practice for almost forty years, but worryingly and commonly it, a

lot of organisations have no clear concept of how to effectively

conduct the planning process. As a result, most strategic plans

never make any real impact on an organisation and its activitiesFortunately, in the past decade, there have been attempts to

clarify the major components and processes of strategic

planning. It has thus become easier for an ordinary organisation

to effectively create and implement a first rate strategic plan.

Recent studies and leading management theorists have

advocated that strategy needs to start with stakeholders

expectations and use a modified balanced scorecard that includes

all stakeholders.7


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Developing corporate strategy should be interactive, whereparticipants are given time to question and/or improve theintended objectives or implementation method. Initial corporateobjectives may need to be altered if there is no feasibleimplementation plan that will meet with a sufficient level of

acceptance amoung the range of stakeholders or if the requiredresources are not available.

All stakeholders should be involved in strategy development toensure that it addresses relevant problems and issues, as well asto provide practical solutions to enable the firm to gain a larger

market share. This avoids ivory tower strategies.Strategic formulation should follow a participatory and demanddriven or needs based approach, hence stakeholders need to beconsulted regarding their requirements, needs and expectations. 8


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Participative strategic planning (through a workshop) can be done in thefollowing ways:

Bottom up approach. This is where employees are allowed toparticipate at the planning stage through submission of strategicproposals to management , who then in turn funnel the more usefulideas further up the organisation.

Top

bottom approach. This is the most common approach, whereusually the CEO (probably with the assistance of a strategic planningcommittee) decides on the overall direction that the firm should take.

Collaborative approach. This is whereby the management team,strategic planning committee, employees and other concernedstakeholders jointly and collectively decide on the strategy anorganisation can adopt and implement.

After all the information is collected from the participants, the strategicplanning team then evaluates the data, and uses the organisationsstrengths and opportunities (both existing & potential) to formulate thefinal strategic plan. This team should be composed of top level managerscapable of representing the interests, concerns and opinions of all relevantstakeholders.

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There are however other ways in which strategic planning can be done

through stakeholder engagement. In the early days of Hewlett-Packard

(HP), Dave Packard and Bill Hewlett devised an active management

style that they called Management By Walking Around (MBWA) were

senior management at HP spent time visiting employees, suppliers and

customers. This direct contact with key stakeholders provided them

with a solid ground on which viable, successful strategies were crafted

for the company.

A successful strategic plan is executed when stakeholders contribute in

every phase of the planning procedure.

A problem solving strategic plan also needs relevant feed forward

information from its stakeholders. It is thus imperative that a

participatory method of strategic planning be applied to ensure a needs

based strategy which can realistically be implemented and provide

benefits to the different stakeholders.

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Advertising is key to successful implementation of the strategy.

The more often employees hear about the plan, its elements and

ways to measure its success, the greater the possibility that they

will undertake it as part of their daily work. It is especially

important that employees are aware of the measurementsystems and that significant achievements be rewarded and

celebrated. This positive reinforcement increases support of the

strategic plan and belief in its possibilities.

The strategy should have the support of at least most members

of the firm, but of course, the companys leader is its mostinfluential member. His support and implementation of the

strategic plan into daily activities greatly increases the likelihood

that other people in the organisation will do the same. 11


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What agenda would be followed at the

participative planning workshop?

The Strategic planning team would host the workshop, and obviously begin bywelcoming participants, introducing themselves (as well as having participantsintroduce themselves) and explaining to them the purpose of the workshop, whichwill be to gather relevant ideas on the firms strategy from each of them.

The team can then present their overview to the stakeholders, and seekconfirmation from the stakeholders that they indeed understand the generaldirection the organisation wants to take and how that strategy will affect the

different stakeholders differently.Questions can then be invited from the floor, should they have any.

The stakeholders can then be divided into groups to have discussions amoungstthemselves, brainstorming on the firms strategy.

The groups can then make presentations/give feedback to all workshop participantson how they feel about the firms strategy, what they may want incorporated orchanged, why they feel that way and which specific areas they may want addressed.

This method will ensure that all approaches of gathering strategic information(bottom-up, top down and collaborative) are taken into account.

The strategic planning team should ensure that relevant information gathered fromthe workshop participants is taken up when the final strategy is formulated andimplemented. Stakeholders are more likely to take ownership of the strategy andmake it a relevant, working one if their suggestions are incorporated in the finalstrategy.

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Why should strategic planning be done in a

participative manner?

This section looks at the benefits of coming up with a strategic

plan in a participative manner. Participative planning ensures that

pertinent questions related to the firms chosen strategic

direction are answered. Such questions may include:

Which business should the organisation be in? How does being in that type of business create synergies

and/or add to competitive advantage of the corporate as a

whole?

Why does the organisation exist? Where is the organisation now?

Where does it want it to be?

How does it get there? 13


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Strategic planning in participative manner is done for the following reasons:

To educate management, employees and other stakeholders on the chosencorporate strategy.

It allows for the planned utilisation of the organisations resources in a mannerthat enhances performance of the firm in its external environment.

Allows buy in and ownership from the concerned stakeholders.

It allows the organisation to check if the corporate culture fits in with the chosenstrategy.

It allows for an environmental scan which highlights all pertinent aspectsaffecting the organisation ,whether external or industry based. This will alsoshow areas on which the firm can capitalise on in addition to areas in whichexpansion or growth can be pursued.

It shows whether the chosen strategy will address the key strategic issues

underlined by the organisations strategic position (sustainability). It assesses whether the resources required to implement the strategy are

available, or can be developed or obtained (feasibility).

The organisations strategy can be measured for effectiveness throughconducting a SWOT analysis analysing the internal strengths & weaknesses andthe external opportunities & threats 14


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It is significant in defining and setting up a corporates long term goals,as well as its mission, vision, objectives and values.

Provides direction and guidance to employees, setting up measurablegoals and a time span to achieve them, and designating duties to allcorporate personnel.

A well formulated and implemented strategy will ensure survival,

success and growth of the organisation. It allows for uniformity of purpose, provides a basis for resource

allocation, guides organisational culture, establishes corporateboundaries, facilitates accountability and enhances performance.

Allows for the detailed layout of paths by which the company plans tofulfil its mission and vision. This involves defining the firms major lines

of businesses, identifying/establishing critical success factors andidentifying strategic thrusts to pursue.

Allows for the closing of any performance gaps that will have beenidentified through gap analysis. This involves looking at the current stateof affairs against the desired state of affairs and then determiningwhat needs to be done to ensure that the desired future state becomesa reality.

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Allows for organisation to build on its strengths to exploitexisting and future opportunities, while managing risks arisingfrom internal weaknesses and external threats.

Allows for contrasting strengths against weaknesses todetermine if the organisation has enough strengths to offsetits weaknesses.

At an external level, a similar contrast can be made betweenexisting opportunities and threats to determine whether theorganisation is capitalising on opportunities to offset emergingthreats.

Leaves room for a change in the strategic direction in pursuitof organisational objectives should there be unforeseencircumstances or a change in operating environment. This isdone through contengency planning. 16


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Management

THE END

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Why Would You Recommend the Institutional is Ing of Strategic Management[1]