Learn all about the strategic management process, how it works, how it can benefit your business, and how to apply it to your business in this article. It will explain what the strategic management process actually is, including the five stages involved in the process.
Next, we’ll take a closer look at what it takes to achieve success with the strategic management process. How can this process benefit you and your business? How can it help you make SMART goals and achieve them?
What is Strategic Management Process?
The strategic management process is a five-stage process consisting of determining a vision, setting goals, determining a strategy, implementing that strategy, and monitoring future developments. All five steps are crucial for the process to work properly, so ensure you understand how it works before trying to execute it without assistance from an expert.
The first stage is setting the strategic vision for your business. Ask yourself where you see your business going in the future. What do you want the direction and focus to be going forward?
The second stage is setting goals or objectives. It’s a good idea to make sure they are SMART goals – goals that are specific, measurable, achievable, relevant, and time-bound. SMART goals are clear and attainable; they aren’t out of reach or too easy to accomplish.
The third stage is determining a strategy to meet those goals. This can be as complex or as easy as you wish it to be, but it should incorporate all of the elements of a SMART goal.
The fourth stage is to implement and execute the strategy you created in stage three. If you have it set up well, you shouldn’t have to do much except flip the switch on your strategy.
The fifth stage is evaluating the performance and making adjustments to your strategy. This stage is just as critical as any of the other stages. If you don’t measure how well you are doing, how will you know what you need to change?
How Can the Strategic Management Process Help Your Business
A huge part of running or managing a business is crafting and executing the strategies you have come up with. It’s very important as business managers need to have a clear strategic vision for the company to progress.
How will you move toward the future if you don’t set goals to reach? How will your employees know how well they’ve done if you don’t measure the success of your strategies and plans?
With a clear vision and goals, you can create a strategy that will not only work but will also bring you success! This is typically the goal of every business owner or manager – success!
With the sheer number of strategic decisions that must be made to see that success, a process like this can seem overwhelming and frustrating at times. It doesn’t have to be that way.
How to Apply the Strategic Management Process
One of the first things you’ll want to look at is the external and internal considerations that need to be made when coming up with an effective strategy. Here is a brief list of things you will want to consider when making your strategy.
What are the competitive forces you are facing?
Is the current strategy working well?
What are the industry’s dominant economic traits?
What changes are needed with the current strategy to see success?
What industry changes are evolving?
Why is the current strategy not working well?
Which direction is the competition headed?
What valuable resources and capabilities do you have?
What key factors equal competitive success?
What are your internal weaknesses?
What are the external threats?
Are your prices and costs competitive in your industry?
What are the external opportunities?
Are you stronger or weaker than the competition?
Your Strategic Plan and Vision
Part of having a successful strategy is having a clear strategic plan, one that lays out the future direction of your business, sets performance objectives, and the strategy you’ll use to achieve those goals or targets.
Once you’ve set your strategic plan, you’ll want to make sure that you have a clear strategic vision. A vision like this just talks about where you are going, but it’s very important because if you don’t know where you are going, you might get lost.
Now that you have a clear strategic plan and vision, you know where you want to go, so you can set short-term and long-term goals. A short-term goal would be one that you would set to deliver results in the current period. Long-term goals focus more on the long-term future. Where will you be in a year? What about ten years from now?
Goals can be financial or strategic in nature, but there is a difference between the two. It might be a wise idea to determine who is responsible for which objective if you have a small to medium-sized business. If you are an entrepreneur, all goals would be your responsibility, or you could consider outsourcing some things to a freelancer.
Implementing Your Strategy
Now that you are ready to execute your plan, you must know the best practices for leading and managing a process like this. First, make sure you have an attainable plan – something you can actually do. Next, stay on top of what is going on. This means that you will want to be involved, ask questions, and watch for results.
To achieve the best results possible, make sure that you are open and willing to listen to feedback from the other people in your business. This may include outside contractors and freelance workers. Once you have measured the results and know what is happening, you can take corrective action where needed.
Finally, you’ll want to make sure you reward those who help you achieve your strategic and financial goals. That includes you! Look at all the benefits you have received because of this new strategy, examine how you can change things in the future, and determine what you want to keep the same.
You should now feel confident in knowing what the strategic management process is and how to apply it to your business to see success. What else does your business need to succeed?
If you need further assistance with managing your business, we might be able to help! We do business consultations and other business tasks that assist business owners accomplish their goals. You can trust Indiana’s tax expert! Contact us today to see how we can best help you!