Mastering Strategic Management: Models and Steps You Need to Know

 

Strategic management is your blueprint for navigating the complexities of business and ensuring long-term success. It’s not just about setting goals; it’s about aligning your actions with a clear vision and adapting as you go. Here’s a straightforward guide to the key models and steps in strategic management, helping you turn theory into practice.

What are the 7 steps of the strategic management process?

Think of the 7 steps of strategic management as your detailed roadmap to guide your business to success. Here’s how to effectively work through each step:

1. Understanding the context: Start by examining the internal and external environments affecting your business. Look at market trends, competitive landscape, and internal capabilities. This comprehensive understanding helps you identify the current position of your organization and prepare for strategic decision-making.
2. Strategic analysis: Dive into a detailed analysis of your business environment. This includes SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats), market research, and competitor analysis. The insights gained here will inform the development of strategies that leverage your strengths and address weaknesses.
3. Setting business objectives: Define what you want to achieve at the top-level in clear and specific terms. Objectives should be SMART—Specific, Measurable, Achievable, Relevant, and Time-bound. This clarity ensures that your goals are actionable and provides a benchmark for measuring success.
4. Strategy formulation and planning: Based on your analysis, develop strategies that align with your objectives. This involves brainstorming and evaluating different strategic options and choosing the ones that best fit your goals and resources. Formulate strategies that are innovative and practical, considering both short-term and long-term impacts.
5. Strategy execution: Put your strategies into action. This involves allocating resources, assigning responsibilities, and establishing timelines. Effective implementation requires coordination across various departments and ensuring that everyone is on board with the strategic plan. To learn more have a look at our related article: Strategy Execution in 4 Steps: Keys to Successful Strategy.
6. Monitoring and evaluation: Track the performance of your strategies using key performance indicators (KPIs) and regular reviews. Assess whether your strategies are delivering the desired outcomes and make adjustments as needed. This ongoing evaluation helps ensure that you stay on track toward your goals.
7. Closing the loop and feedback: Gather feedback from various stakeholders and use it to refine your strategies. Continuous improvement is key to staying competitive and responsive to changes. Looping in feedback helps you adapt and evolve your strategies based on real-world experiences and changing circumstances.

For further insights into each of these steps, explore detailed articles and resources on strategy in our resource library (use the search function). Note that HBR also has a rich library of academic and practical articles on strategy management.

Streamlined strategic management process

For a more streamlined approach, here’s a breakdown of the 5 steps of strategic management that you can follow:

1. Business objectives: Begin by defining clear, specific, and actionable objectives for the strategy cycle you want to scope. This involves understanding what you want to achieve in terms of growth, market position, or other business outcomes. Setting these goals provides a direction for your strategic planning and execution.
2. Analysis: Conduct a thorough analysis of both your internal capabilities and external environment. This includes reviewing your organization’s strengths and weaknesses and understanding market opportunities and threats. This analysis forms the foundation for developing effective strategies.
3. Strategic planning: Based on the insights from your analysis, create strategic plans that address your goals and challenges. Evaluate different strategic options and select the ones that best fit your business needs and resources. This step involves drafting detailed plans and considering various scenarios.
4. Strategy execution: Execute your strategies with precision. This step involves putting plans into action, coordinating efforts across departments, and managing resources effectively. Ensure that your implementation plan includes specific actions, timelines, and responsible parties.
5. Evaluation and optimization: Regularly assess the performance of your strategies using metrics and KPIs. Review progress towards goals, identify any issues or deviations, and make necessary adjustments. This step helps you stay aligned with your objectives and improve your strategic approach over time.

These steps provide a solid framework for effective strategic management.

What are the 5 models of strategic management?

Understanding different models of strategic management can help you choose the best approach for your business. Here’s a closer look at the 5 models of strategic management:

1. Traditional or Linear Model: This model follows a sequential process where strategy formulation, implementation, and evaluation are done in a linear fashion. It’s a straightforward approach that works well in stable environments but may need adjustments in more dynamic settings.
2. Always-On Strategy model: Bridges the strategy execution gap using a continuous, rapid, and iterative loop of strategy development, execution, and evaluation. Its connected, data-driven, and agile nature encourages informed strategic decisions, faster execution and time to value, and ongoing alignment with market demands.  
3. Interpretive model: Centers on understanding and interpreting the organizational context, including stakeholder perspectives and internal culture. This model helps in crafting strategies that align with the organization’s unique context and values.
4. Transformational model: Aims for significant change and innovation within the organization. It focuses on transforming business processes, cultures, or products to achieve substantial growth and differentiation.
5. Radical model: Challenges conventional practices and seeks to make disruptive changes. This model is about pushing boundaries and rethinking the business model to drive major shifts and breakthroughs.

Opinion: best model for strategy management

At Quantive, we believe that the Always-On Strategy model is the most suited to today’s market dynamics. At its core, it embraces the fluidity of the market, customer preferences, and macroeconomic changes that are the reality for most businesses today. It acknowledges that change is not just continuous but fast. Rather than depending on dated, set-term plans, this model empowers businesses to tweak their strategy using real-time insights. Its inherent feedback cycles refine and optimize strategy continuously, ensuring it stays relevant and timely. 

To adopt an Always-On Strategy successfully, consider leveraging AI-powered solutions specifically designed for dynamic strategy management. The right solution can optimize the management of your Always-On Strategy, enabling you to wholly and effectively deliver all of your business’ potential. 

Quantive StrategyAI pairs AI with your business data to design, deploy, and continually enhance an Always-On Strategy for your business. 

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Leadership Styles, Models and Philosophies. Leadership Models and Theory. Part 2

 

• Rishabh Bhandari 

Behavioural Leadership: Managerial Grid - Blake and Mouton

wo crucial - though often ignored - factors in influencing leadership styles are:

1. The need to adapt behaviour/style/methods according to different situations
2. The psychological make-up of the leader.

To account for this, Robert Blake and Jane Mouton created their "Managerial Grid" model in 1964, in their book, The Managerial Grid: The Key to Leadership Excellence.

Blake and Mouton depicted their model as a grid with two axes:

1. Concern for People
2. Concern for Production

Note: 'Concern for Production' might be replaced with 'Concern for Task/Results'.

The Blake and Mouton Managerial Grid identified five kinds of leadership behaviour, of which they suggested that the Team Style is the ideal.

Country Club Style

• High People - Low Task - Here the leader has a high concern for and usually involvement with people, but a low concern for the task. 
• There is usually an overly friendly relationship between the leader and the led group. 
• So although leaders like this appear to care about their people and want to create a comfortable and friendly environment, this style is often not good for creating producing results. People feel good and happy, but the task lacks priority. 
• Ironically, the group suffers ultimately because they fail to achieve. 
• The style is common among leaders who are afraid of upsetting people, and/or who fear rejection and being disliked.

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Impoverished Style

• Low People - LowTask - Here the leader has both a low concern for people and a low concern for the task. 
• You may ask who would adopt this approach because it is obviously doomed to fail. The answer typically is 'leaders' who care mainly about themselves and are afraid of making mistakes. 
• Not surprisingly, Blake and Mouton said this is the least effective approach to leadership.

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Middle of the Road Style

• Mid People - Mid Task - This is essentially an ineffectual compromise. There is some concern for the task and equally, some concern for people, but we might also say there is not enough of either. 
• Leaders adopting this behavioural approach try to address the needs of the task and their followers to some extent, but do so without conviction, skill or insight and therefore reduce their effectiveness. 
• Leadership generally requires a good degree of natural authority and decisiveness, so a style which lacks these aspects has much room for improvement.

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Produce-or-Perish Style

• Low People - High Task - Here we see a high focus on the task with little or no concern for people. This style is often referred to as autocratic. 
• Leaders using this style seek to control and dominate others.
• A leader like this will commonly take the view that staff should be grateful to be employed and paid a salary. 
• Motivation is often attempted through a threat of punishment, such as being sacked. 
• This is a dictatorial style. In extreme cases, it would be rightly regarded as ruthless.
• Sadly, it can be effective in the short term and interestingly, where a group is failing to react suitably to a serious crisis then it may actually be a viable style for a short period, but the approach is not sustainable, especially where followers have the option to walk away.

This reflects Theory X in Douglas McGregor's X-Y Theory - with the leader often operating under the assumption that individuals are naturally lacking in motivation, and require an external stimulus to inspire productivity. 

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Team Style

• High People - High Task - This style combines a high concern for and involvement in the group with a strong well-organised and communicated focus on achieving the task. Blake and Mouton saw this as the ideal behavioural approach. 
• Leaders who behave like this manage to blend concern for both people and organisational aims by using a collaborative teamwork approach, and plenty of consultation enabling the development of a shared (not imposed) motivation to achieve the organisation's goals. 
• This style normally requires that followers/the group are suitably mature and skilled for a high level of involvement. The style is difficult to use and may be inadvisable when leading inexperienced people to produce challenging and vital results in a new or strange area.

This reflects Theory Y in Douglas McGregor's X-Y Theory - with the leader often operating under the assumption that individuals are naturally self-motivated and happy to work so long as they are led well and provided with enough freedom to do so.

• Blake and Mouton noted that Team Style was preferable in an ideal world.

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Combinations: Paternalistic and Opportunistic Managerial Styles

Following Mouton's death in 1987, Blake and his team created two additional managerial styles which are often considered to be a combination (dependent on the situation) of the previous five. These are known as Paternalistic and Opportunistic. 

1. Paternalistic

• Paternalistic managers are described as switching regularly between the Country Club and Produce-or-Perish styles of leadership. 
• They are often supportive and encouraging, caring for the needs of individuals within their team, whilst simultaneously being very defensive of their decisions. 
• They will generally not delegate any true responsibility for tasks, and will not consult on decisions with team members, but will instead dictate the terms of a role. 

2. Opportunistic

• The Opportunistic manager can be found anywhere across the Managerial Grid, depending on the situation. 
• These leaders will favour their own individual needs, moving from quadrant to quadrant on the grid to align themselves with a style which will suit them at any one time. 
• They are manipulative and will utilise their flexible managerial style to get what they need from individuals at the time. 

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Developing Your Individual Managerial Style

It is important when contextualising your managerial style in accordance with the Managerial Grid, to remain objective. By analysing your individual strengths and weaknesses you can begin to plan your personal development with the aim of achieving the ultimate goal as a Team Leader.

You can break down the development process into a few simple steps:

1. Identify your managerial style - Consider several recent situations when you were required to utilise your role as a manager or leader. Evaluate how you acted during these situations in accordance with the task and the team members, and position yourself along the Managerial Grid.
2. Identify areas for leadership development - Now, considering where your results are generally centred around, identify the particular style of styles you most closely associate with. Do these suit the context of your role or the situations that were at hand?
3. Consider the skill or style gaps between you and becoming a Team Leader- If you believe yourself to be too Results-oriented, perhaps begin to include team members in decision-making more often, improve your communication, or maybe even delegate more responsibility. If the opposite is true, and you are strongly Person-oriented, maybe work on improving your project management or scheduling skills, or how you clearly communicate roles and tasks. Practice your new skills consistently, and do not allow yourself to fall back into your previous, weaker managerial style.
4. Contextualise your grid position based on the situation - The key to the Managerial Grid is retaining a level of behavioural flexibility. Some situations will require most of a Results focus than others, and vice-versa. For example, if your team is going through a major change, or a new member arrives, it may be more suitable to focus on their needs during this period. However, if the organisation is in a phase of uncertainty or struggle, it may be more suited to prioritise results slightly over the individual need for the time being.

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Limitations of the Managerial Grid Model

However, as James Scouller and others have noted, the model does not naturally or fully address two particularly important dimensions of leadership:

1. The need to adapt behaviour/style/methods according to different situations
2. The psychological make-up of the leader

In more detail to paraphrase Scouller:

• Adopting the Team Style of leadership will not always be appropriate - for example at times of major crisis when the task is necessarily more important than people's/worker's interests, or when leading very inexperienced people towards a tough aim and tight deadline, who under such circumstances normally require very direct and firm instruction.
• Also, concerning the leader's own personality makeup, not every leader can or will adopt the ideal Team Style, even after training, because of inner psychological blocks or basic personality. Some leaders are simply much more skilful in 'non-people' areas, such as strategy, visioning, building systems and structures, innovating, etc., compared to relating to others. It is not sensible to imply that such leaders, many of whom can very effectively delegate the people/team aspects of leading, are not good leaders.

Scouller addresses these points in more detail within his Three Levels of Leadership model.

All that said, Blake and Mouton's work is highly significant.

• Their thinking warrants a section in its own right within this leadership model sub-group - and it remains a very important advance in leadership theory.

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