Process Overview

Strategic Management Process:
The strategic management process is made up of four stages. These stages in turn are made up of segments. These stages and segments offer guidance for strategy formulation and execution.

Strategic Management: Four Process Stages:
The process stage definitions are based on both the sequential information needs and the dominate congnitive styles most benefical to the work done.

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Producing Advantage

The strategic management process is one of the three elements of the framework for strategic management competency. The performance requirement of a strategic management process is that it produces and sustains a competitive advantage. Its tangible output is a strategy executed to deploy a business design. Its intangible output is the competency to do this repeatedly, keeping the business design current and competitive.

Viewed from the proverbial 50,000 foot level, strategic management is very simple four step process -

• Current Reality - Assess your current reality, know where you are at now, and know your trajectory.
• Desired Future - Develop a plan and design for your desired future, i.e. know where you want to go.
• Plan to Make It Happen – A detailed action plan to align the organization to achieve the desired future, including the performance measures and controls.
• Make It Happen – The actions to incrementally put the future into place. The strategy and operations merge.

As with views of the earth from 50,000 feet, this offers an essential perspective of strategic management. As we zoom in, more of the details emerge, but the basic structure remains. Also as we zoom in, it is important to follow the premises for an effective strategic management process.

Strategic Management Process Premises

Deriving an effective strategic management process begins with a couple of basic understandings.

• First, the business organization is both a system and a process. A system and a process are two ways of labeling the same thing. They both have inputs, outputs, and a network of sub-systems or processes which interact with each other and their environment.
• Second, the business organization exists in a dynamic environment which makes business designs obsolete at varying rates.

Requirements

Given these two premises, the process has the following requirements:

• The strategic management process must have the holistic approach of systems design.
• The persistence and cyclicality of process improvement
• Produce innovative business designs on an ongoing basis.
• Be "smart" enough to know when the design needs radical innovation vs. when it needs refining or adjusting.
• Be self-correcting.
• Produce learning.
• Enable the organization to be adaptive.

With attention to these requirements, the strategic management process design is based on a composite of systems development and continuous process improvement methods. The design is then refined making it an integral component of adaptive learning and a strategic management competency.

Four Stages of the Strategic Management Process

The strategic management process has four sub-processes called stages. These four stages break the work of strategic management into logically separate types of work based on people's thinking types, learning requirements, and the sequencing essential to any design or improvement process. Each stage's descriptive name conveys the nature of the stage and draws attention to the essence of its purpose, the essential cognitive processes, and activities.

• Generate Wisdom – The generating wisdom stage centers on the cognitive processes related to understanding in general, and understanding complexity in particular, to arrive at an effective understanding of the current reality. This stage's slogan might be learning to understand, understanding to learn.
• Create Art – The creating art stage centers on the cognitive processes related to exploration, divergent thinking, alternative generation, and creation of strategy and a holistic idealized design for the future business organization. Its slogan might be formulating strategy, designing the business.
• Apply Science – Applying science plans to close the gap between the current reality and the desired future. This stage plan aligns the organization to execute the strategic plan to deploy the idealized design. The cognitive processes of this stage are analytical problem solving nature. Therefore this stage's slogan might be applying science, planning the deployment.
• Wage War – Waging war executes the strategy, deploying the idealized design. The design is typically deployed piece by piece, not all at once. This stage is the doing stage. Like the fog of war, strategy execution is fraught with confusion and difficulties. Governance, discipline, control, and paradoxically, flexibility, come together to keep the deployment on track. Deployment tests the hypotheses of the business design, making this stage a time of intense learning. The cognitive process of this stage centers on acting and controlling action. The slogan for this stage might be controlling chaos, deploying the future.

Specialization and Integrating of Cognitive Capabilities

The four stage strategic management process separates and integrates learning, problem definition, creative activities, innovation, strategy formulation, problem solving, designing, planning, and execution of strategy. The strategic management process produces synergy from diverse thinking types by first separating them, allowing each their own time and place to be exercised to their fullest, and then integrating them to achieve higher order understanding and designs. From a thinking type perspective, the focus of each respective stage is: 1) problem definition, 2) unconstrained creative innovation, 3) problem solving and planning, 4) solution implementation and transformation.

Freedom to Perform

The strategic management process makes the most of the organization's talent, imagination, and innovation by allowing for each type of thinking and activity to be fully exercise before moving on to the next stage. Problem definition is unfettered in the generating wisdom stage. Innovators and pathfinders, with their creativity and holistic orientation, are unleashed in the creating art stage. They are unfettered from the problem solvers with their scientific orientation who are unleashed in the next stage, applying science. The doers perform the dynamic work of implementing the strategy, deploying the new business model, in the waging war stage. (Note: These thinking types come from Gharajedaghi, Jamshid, Systems Thinking: Managing Chaos and Complexity, Butterworth-Heinemann, 1999, pp 42-43, 116-117).

Deliberately Emergent Strategy Formation

The BAi approach to strategy formation is deliberately-emergent, fostering the emergence of strategy necessary for an organization to be adaptable and sufficiently deliberate to control and focus the organization to produce an advantage.

Generating Wisdom