Difference Between Strategic planning vs Strategic management
There has always been some confusion between the two strategic planning vs strategic management and they have often been used interchangeably but there is a world of difference between the two. This strategic planning vs strategic management article will make you understand the two terms separately and will make it clear the steps involved in the two terms.
The process of predicting the future of the company and defining it into the goals and objectives in order to be able to fulfill the future envisioned is broadly categorized in strategic planning vs strategic management. Unlike the conventional way of long-term planning, the strategic planning works its way backward i.e., first defining the end result and then chalking the strategic planning steps to be undertaken in order to achieve the end result. For example, at the time of long-term planning, the planner plans out the steps to reach the next level but in case of strategic planning, the planner reaches the stage and then thinks what must be done to reach here. In other words, long-term planning is a prospective planning and strategic planning is a retrospective planning process.
For example, a company has developed software that helps the users to store and listen to the music at their own comfort. But at the same time, Apple Company, looking at the popularity of the software, created an iPod, which made listening to music all the more easy for the customers. Now in such a situation, if the company did not have a strategic plan in place, then it would have suffered great loss because they would have only focused on the day to day operations of the company and hence would have rendered the software obsolete. And in turn, they would not have been able to compete with their competitors in the market.
This is the five steps of Strategic Planning
Once we have understood what exactly strategic planning includes in strategic planning vs strategic management, the next step is to understand the strategic planning steps. It is an understood fact that if you want things done quickly and smoothly then it is important to build a plan as to how the things are to be done, or else you will just end up in a mess.
The task of strategic planning is only difficult to look at, but it is quite an easy task to do once you get to it and moreover it is of utmost importance to all kinds of business as it critically analyses the current situation of the company, looks at what things are best for the company and focuses on the things that should be done and paves a clear path for the end result.
Here are five steps that you should follow in order to be able to chalk the best possible strategic plan for your company:
Determine where you are
Understand the position of your company, understand the market that you work in and the environment of the market. Do not get stuck in the maze of the way you see the company and the actual position where the company stands. Conduct an internal and external audit to best understand your company’s footing and understand how competitive your company can be.
Identify what’s important
Once the analysis of your company’s footing is undertaken, the next step is to define as to what is important for your company’s growth, to set the direction for your company and define the missions and the vision that you want your company to fulfill. A strategic plan should focus on the issues that are recognized as the more important issues than the other in the in-depth analysis of the company’s position.
Define what you must achieve
Set the objectives for your company as to what should the company achieve in order to properly address the grave issues. This is to make sure that the company is moving in the right direction and has some objective set for themselves.
Determine who is accountable
By determining who is accountable for what, you are indirectly allocating the human resource, the time resource and the money resource that you have and make sure that all the plans, strategies and budgets are properly fulfilled and all the priority issues are properly addressed so that the company can fulfill the objectives set.
Review the work done
Once all the plans have been made and implemented and all the resources have been allocated and the ball has been set rolling, the next step is to ensure that the plans are properly followed and the tasks are being performed as planned. For this, you need to review the process and make necessary changes in the plan. And this should be done at least every quarter just so to ensure that there are no discrepancies.
It is not only helpful for the big business houses to keep things on track but it is also important for the small business units for the growth of their business as the strategic plan will give you a much better idea about what you should do next.
Strategic management is a step ahead of strategic planning. In the planning phase, you chalk out all the plans for the company but in the management phase, the strategies so formulated are identified and are described so that the managers are able to do their job in the best possible manner and so as to achieve a competitive edge over their competitors.
Strategic management can also be defined as the decisions undertaken by the manager which drives the whole company towards the desired results. The manager should undertake timely SWOT analysis so as to be thorough about the strengths of the company and use them to their advantage and to work on the weaknesses of the company and minimize them. And also so that they can grab all the opportunities that come their way and combat the threats properly.
Strategic management in the simplest terms would mean planning for the known as well as the unknown contingencies of the business. And this kind of planning would be applicable for both the small-scale firms and the large-scale firms because irrespective of the size of the firm, it important for the firm to be ready for the competition that they face in order to keep themselves afloat and gain a competitive edge. Strategic management helps in defining the course the company is going to follow by deciding upon the goals that the company wants to attain,
Strategic management is not a one-time process but instead, it is a continuous process. It requires a constant evaluation of the company and its competitive edge and reevaluates the strategies panned out in order to compensate the changing environment. In strategic planning vs strategic management, it helps in defining if the strategies are implemented and worked upon properly.
In strategic planning vs strategic management, it also has another aspect in which the process helps the employees in understanding about their job profile and how their job helps in the accomplishment of the overall objective of the company. The employees work better if they know their exact role in the organization and know what they have to do in order to be able to reach that goal. Strategic management can also be seen as a means to manage the employees of the organization so that the employees are able to work to their maximum potential. The management technique also helps the employees to understand the various changes brought about in the organization and understand how these changes are going to affect their job, hence are able to better face the changes being brought about in the organization. They help the employees to be effective as well as efficient as both the qualities are equally valued in an organization.
Hence the strategic management has to play a dual role in strategic planning vs strategic management, one is to incorporate all the functional areas of the organization into one thing and to make sure that functional area so incorporated work well with each other. And the second role is to keep checking if the goals and objectives of the organization are properly followed and fulfilled.
One of the main functions of strategic management in strategic planning vs strategic management is to properly analyze the various cross-functional business decisions before implementing them. Strategic management also involves various other functions:
- Proper analysis of the various internal and external strengths and weaknesses of the company.
- Formulation of the action plans to be implemented.
- After formulation, the execution of action plans is also included.
- Reviewing the success of the action plans that are executed and making the changes as and when necessary.
Strategic management enables strategic planning which tells about the organizational ability to take the necessary action plan so as to be able to fulfill the goal set by the planners.
The strategic management can only be successfully implemented when the upper management is able to think strategically and is able to apply that strategic thought to the goal-setting process. Also, the people of the organization should understand the strategy properly in order to be able to reap maximum benefits.
There are five stages in the process of strategic management. They are as follows:
Goal setting, as the name suggests is the process of setting a vision for the company as to where they want the company to reach. This process can be further divided into three-point process; first is to define the short term and long term goals for the organization, second is to identify the process and the action plan that needs to be undertaken in order to fulfill the objectives set and third is to customize the process according to the capabilities of the staff so that they are able to better work towards the goal fulfillment process.
But during the process of goal setting in strategic planning and strategic management, you should keep in mind that the goal should be detailed, realistic and it should be in sync with the vision set for the organization. In the end, your plan should be detailed enough to communicate your goals and vision to the shareholders and the employees of the organization properly.
This stage involves in-depth analysis of the strength and weaknesses of the company. Proper analysis of the company is of utmost importance as it helps in the next steps of strategic management. In strategic planning and strategic management the sustainability of the business, the direction in which organization wants to go and the opportunities towards which the organization should be working are the key elements and areas that the analysis should focus on. The external and internal factors affecting the working of the organization are also included in the analysis. A proper detailed SWOT analysis should be undertaken by the business organization.
For formulating the strategy of strategic planning and strategic management in the organization, the planners should take into account the information gathered from the analysis. They should identify the goals and the objectives to be achieved and should also know which problems need to be prioritized according to their importance towards goal achieving. Also, the external help needed by the company in any area should also be identified. Also, the planners should also have a backup plan for each step.
In strategic planning and strategic management, a successful implementation of the strategy is very important to any business organization as it will define if the organization will be able to achieve the goals set. It is important to understand if the strategy implemented is in sync with the business structure. The roles and responsibility of the people in the organization should be clearly spelled out so that there is no confusion on the part of the employees and they are work with a concentrated approach towards the fulfillment of the goals. Also if there is a need for any financial help, then that help should also be secured at this stage.
Evaluation and control
The proper evaluation of the strategy implemented in strategic planning and strategic management should be undertaken and should be made sure that the strategies are followed properly and there is no discrepancy in the implementation. Also if there is any discrepancy then corrective steps should be taken in order to be able to achieve maximum results. Evaluate your actual results to the standards set by you. Internal and external issues affecting the organization should also be taken into consideration and should also keep in mind when formulating the future strategies.
Strategic planning and strategic management are both important for the organization as they help in formulating the goals to be achieved and help in a more concentrated approach towards the fulfillment of that goal.
This has been a guide that strategic planning vs strategic management is a retrospective planning process. It is only difficult to look at, but it is quite an easy task to do. These are the following external link related to strategic planning vs strategic management.