Introducing Strategic Management Introduction - Strategic Management

In this chapter we will learn how to introduce a successful process into organization. Strategic management is not a technique but a complete way of Running a business. The application of strategic management is not like taking a patent elixir in casual doses, but is a strict regimen that transforms the patient and which can do harm if administered haphazardly.

Strategic management in any company should begin with a decision. The only person who can take this decision is the chief executive, who must reach the conclusion that this is the way in which he or she wishes to manage the company. Ideally at this stage the top management team should share this enthusiasm. The chief executive’s enthusiasm must also infect others with the same feeling. The decision to implement planning should not be taken lightly.

The first problem the chief executive will encounter following the decision is how to implement it. If the company is of any significant size, the probability is that it will need some full-time professional help in the person of a corporate planner. Smaller companies may need this assistance but may not be able to afford the services of a full-time person: for them there is another solution – the use of part-time specialists. At the start-up stage it is possible for a chief executive to use a firm of management consultants, although this solution is usually only economic in the short term, and a more permanent arrangement is needed once the problems of introduction have been overcome. The best solution of all, if it is workable, is for the chief executive to be the planner. This will only work where he or she is fully conversant with all aspects of the strategic planning process and if it has been possible to delegate enough of the other work to allow adequate time for planning matters. Unfortunately, the nature of top management being as it is, these circumstances rarely apply. In many ways this is a pity because maximum enthusiasm would be generated in a situation where the chief executive was so obviously deeply involved in the process.

Much of the impact of strategic management throughout the world still depends on the professional corporate planner. Few effective planning processes have been installed without the skilled services offered by this type of manager.

The chief executive who decides a corporate planner is needed is faced with another choice. Should someone be recruited from inside the organisation or brought in from outside? Each possibility has advantages. The person from inside may know the business well and already command the respect of senior managers. On the disadvantage side he or she may know nothing about strategic management. This disadvantage may be removed if there is sufficient time to learn about the subject before being turned loose on the company. Too often, planners appointed in this way are expected to do the impossible – to become experts overnight. A person appointed from within should always be a manager ‘who cannot be spared’: anyone who can be easily spared is unlikely to hold the good opinions of colleagues. It is unfortunate, too, that planning positions filled in this way are often pitched too low: the temptation to do this is much stronger where the chief executive can virtually force anyone from the company into the new job.

An outside skilled planner should bring particular benefits through expertise. He or she will be unfamiliar with the specific company (although not necessarily the industry), but this problem can be overstressed. A good corporate planner can learn the key areas of the company very quickly and should have a consultant type skill for adapting to new situations. Above all, the person should be expected to know what to do in the new job. It is very easy for those inside a company to overstress the time it takes to learn the business. A line manager who has spent an entire business life learning the craft from the shop floor upwards is likely to believe that no one can understand the dynamics of the business without following a similar career pattern. This is just not true, and confuses two different types of knowledge. A production manager in the iron and steel industry needs to have an encyclopedic knowledge of how to make iron and steel. The corporate planner does not have to be able to make the product: but has to understand what makes the business tick.

The chief executive must, however he or she decides to recruit the planner, set the position at the right level of seniority. The person chosen should be able to walk on equal terms with the senior management of that company, and should be a member of the board or management executive committee – or whatever the senior organ of management is in that company. This immediately answers the question of how much a planner should be paid. Salary (and status) should be within the band applicable to the most senior managers in that company. The planner need not be the highest paid nor need be regarded as the most senior of the group, but must be within that group. Criticism of an idea or decision of the chief executive is often a delicate task: it may well become impossible if the planner is positioned as a keen, middle-management type rather than a high-level executive.

Managers are human. In any circumstances there may be some hostile feelings to the idea of an additional person who will hold the confidence of the chief executive. The organization of the planning function is another matter that requires careful thought and consideration. There may be a great temptation to establish a large centralized planning department in order to ensure the mix of disciplines which go to make up the ‘ideal’ (and non-existent) planner. This may be reinforced by a common belief that the worth of a manager is measured by the number of direct reports: thus empire building is seen as a way of increasing the status of the manager.

Whatever the temptation, a large planning department is something to be avoided. As a general principle it may be said that the employment of every additional person in the planning department is a relative degree of failure, something to be undertaken only when it is so essential that no other answer is possible. This is a good principle for all chief executives or planning managers to keep at the back of their minds but there are further guidelines which might be suggested.

job-description of a corporate planner

Example-of-an-actual-job specification from british Industrial company

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