Strategic Management for Beginners

When you get your first management role you are likely to be supervising operations. This is a great way to start your management career. It is here that you get a broader picture of what is going on in your organisation and hands on experience of dealing with problems. Dealing with problems is what you are there for. People might be off sick, on training, or annual leave your job here is to keep the process running while maintaining standards during this period where you are short of staff. Finding creative solutions to this situation is where you have the opportunity to shine. You might move staff from activities that can wait for a bit, you might get staff to agree to work extra hours, you might streamline processes along the way. The main thing is you resolve the problem. Operational management is all about sorting out these day to day problems. Being good at sorting out problems depends on your ability to keep your staff and your customers happy. It requires excellent analytical, problem solving and social skills coupled with a firm grasp of the reality on the ground. The better you are at sorting out problems the better a manager you are. However, once you go higher up the management ladder you become more strategic and less operational in your function.

Strategic management is a different challenge from operational management. Managing at this level requires the ability to look longer term and plan for the future. To ensure your organisation is ready to embrace the opportunities that come along rather than react to them. Managing strategically is very difficult if operationally you are in a mess (firefighting). The first challenge, therefore, is to sort out the operational management to enable you to put strategic management into effect.

All good managers need to keep in close touch with what is going on at ground level to be effective strategic managers. There are three ways in which you can know what is going on in your organisation:- the first is to do ‘the thing’ yourself, the second is to listen to the people who are doing ‘the thing’, the last is to receive reports containing data on ‘the thing’. The ‘thing’ here could be your production operation, your sales, your services, your matches (as in sport), your battles (as in war). Clearly each of these means of knowing what is going on has pros and cons, so the best option, if possible, is to gather information from all means. Once you have information you need to analyse it. Your ability to analyse information is important but more important still is the ability to be honest when looking at the evidence. This is where personal traits become more important than management theory or management techniques.

Developing strategy
Developing strategy

Once you have made an honest appraisal of what is going on you need to find a solution that is commensurate with the scale of the problem. This is where you need a good mathematical/analytical approach. When looking at staffing for example, a good rule of thumb is to hire seven staff where your estimate is the need for six posts. This is because staff are not always available due to annual leave, training, sickness, vacancies, jury service etc. In this example the operational manager has the task of keeping the service running when staff are short while the strategic manager has the task of ensuring there are sufficient staffing levels long term. The strategic manager should ensure that a staffing crisis does not occur every couple of weeks. The only reason for a staffing crisis should be very exceptional circumstances. Strategic solutions to a staffing issue could include looking medium term at business trends, projected performance, contingency planning, reviewing staffing levels, reviewing staff skills and cross training, reviewing pay and conditions, reviewing business processes and automation, and reviewing internal communications and intelligence. Once a review or series of reviews have taken place actions should be written up and consulted upon. A strategy should then be put in place to address the issue. Once embedded the new strategy should be reviewed and amended where necessary. It is a good idea to consult as often as possible with customers, other relevant stakeholders and your staff. This process of review, consultation, strategy and action should be tailored in the level of detail according to the size of your operation. If you are a small business this process could be followed without being supported by too much documentation whereas if you are a medium or large organisation this process should be supported by formal documentation and governance procedures.

The examples given here are for staff shortages but this strategic management process can be applied to a wide range of issues such as maintaining quality, controlling costs, developing future products or services, systems failure, and many others.

I hope this very brief overview of strategic management has been useful.

By Martin Sepion