Enhanced Strategic Management Process Example

This strategic management process example illustrates the benefits of using the Integrated Enterprise Excellence (IEE) business management system framework to develop organizational strategies.

The described IEE strategic planning  enhanced approach is part of an enhanced business management system that structurally integrates analytics and scorecards. A roadmap for an enhanced strategic process is described below that structurally assesses predictive scorecards and blends business analytics with innovation to determine targeted strategies. The wording of these strategies results in operational performance metric improvement goals that lead to improvement projects that benefit the enterprise as a whole.

 

Strategic Management Process Example: Results

Example high-level statements from a traditional strategic planning session for this strategic management process example are:

Company’s objective is to maintain its position as one of the leading manufacturers of connectors, PC enclosures, and other precision components, and to successfully develop products and market its products for use in network communication and consumer electronic products. A number of strategies have been developed to attain this objective:

Develop strategic relationship with industry leaders–By working closely with top-tier PC and IC companies, Company is able to predict market trends accurately and introduce new products ahead of its competitors.

Focus on the development of global logistic capabilities–This enables Company to respond quickly and efficiently to the customer’s requirements around the world.

Expansion of production capacity–Company currently has production facilities in Asia, Europe, and the United States. Expanding its existing production capacity increases economics of scale.

Achieve further vertical integration–Further integration of the production process allows Company to exercise better control over the quality of its products.

Maintain technologically advanced and flexible production capabilities–This increases Company’s competitiveness relative to its peers and allows it to stay one step ahead of the opposition.

New products–Company will leverage off its manufacturing expertise and continue to move tirelessly into new areas of related business.

Traditional strategic high-level statements like those shown in Figure 1 are then to be cascaded throughout the organization, where Key Performance Indicators (KPIs) and perhaps the balanced scorecard is to have alignment with this effort. Is there a better approach? The answer is yes and will be discussed later.

 

Strategic Management Process Example: Methodologies and Objectives

Aspects often related to traditional strategic planning, as noted in this strategic management process example, include:

  • For determining the direction of an organization, an understanding of current position and possible approaches that could be taken for a particular action course are necessary.
  • Typically viewed as a process for determining where an organization is to go over next year(short term), over three to five years (long term).
  • Built from vision,mission, and values.
  • Often utilizes a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) to gain organizational insight.
  • Could incorporate the Balanced Scorecard
  • Could involve hoshin planning
  • May use scenario planning,which assesses future scenarios.
  • Incorporation of situation analysis; e.g., considering, markets, technology, competition, suppliers,economy, and regulatory conditions
  • Strategy development in away that is easily translatable into action plans.
  • Typically, strategic plans address high-level initiatives and goals, but don’t get tied into day-to-day projects and tasks required for plan’s achievement.

These various points of view for strategic planning can be very important; however, care must be exercised to use a process for integrating these aspects into a system so that the enterprise as a whole benefits.

 

Strategic Management Process Example: Traditional Approach

For a given organization and situation, would it be reasonable to expect that there could be a difference of opinion

  • Relative to how a strategic planning is conducted?
  • How strategic statements would be worded?

After creating a strategy:

  • How is it known that the developed strategy will benefit the business as a whole relative to the financials?
  • What strategy deployment effectiveness might we expect, considering previous experiences?
  • How will everyone throughout the organization be able to relate to the strategic statements in their day-to-day work activities?

These are very important issues that need to be structurally addressed to ensure that there is an orchestration so that the whole enterprise system benefits. These types of decisions need to be based on the results of structured approach including the blending of analytics with innovation; however, this often does not occur.

 

Strategic Management Process Example: An Enhanced Approach

An approach to address the issues with traditional strategic planning is the Integrated Enterprise Excellence (IEE) business management system. In IEE, targeted strategies are created as in step 5, see Figure 2, as opposed to step 1, which occurs in most business management systems. With IEE, there is an overall business management system that aligns predictive scorecards with analytically/innovatively determined strategies that lead to specific targeted operational goals. These operational goals result in process owners’ demanding timely execution and completion of improvement efforts so that that enterprise as a whole benefits.

strategic management process example -- IEE 9-step system

Figure 2
Strategic Planning is Step 5 in the 9-step IEE Business Management System

 

Addition aspects of the IEE business management system and its strategic planning process are:

  • The business is evaluated as a whole when selecting performance measures for functions in the IEE value chain; i.e.,step 2 of the IEE system.
  • Measurements in the IEE value chain are long-lasting through management changes and are assessed for being predictive. When the functional processes are stable, a predictive statement can be made relative to what is expected from the process in the future.
  • The IEE value chain metrics describe the current state of the business and can be useful to determine where strategic improvements efforts should focus through analysis; i.e., step 3.
  • Additional insight is gained in step 3 relative to the economic environment, competition, etc. when deciding where improvement efforts should focus, leading to targeted strategy building.
  • In step 4, reasonable financial goals are set for the enterprise, which are then aligned for the purpose of creating targeted strategies that lead to improvement efforts that are, when appropriate, in alignment with operation metrics; i.e., step 6.
  • Step 7 is then the execution of improvement projects that are aligned to specific functional performance metrics in the IEE value chain; i.e., step 2. Owners of these metrics are asking/demanding the timely completion of projects in their area so that their reported performance metrics improve.
  • Gain from improvement projects can be maintained since operations metrics can be automatically dated daily using Enterprise Performance Reporting System (EPRS) software, which can at any time be accessed by everyone throughout the organization who has authorization by a simple click of a button.
  • The timely completion of improvement projects using this process is in direct alignment with the development of targeted strategies for the enterprise as a whole.

 

Additional Information about the IEE Strategic Planning Enhanced Approach

For additional information about how the concepts of Integrated Enterprise Excellence (IEE) can enhance strategic planning and the business management process, see:

 

 

Contact Us to set up a time to discuss with Forrest Breyfogle how your organization might gain much from an Integrated Enterprise Excellence (IEE) business management system as described in this strategic management process example.

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