Learn about the nine processes that should be conducted and monitored by your company's strategy office.
We've discussed the importance of having a Strategic Management Office (SMO) in an organization. Having an area dedicated to planning and ensuring the achievement of goals is a massive step forward for any business. But, what are the activities of this department?
What is the responsibility of the strategic management office
Basically, the strategic management office should take care of the nine BSC – Balanced Scorecard – processes. See below:
BSC Management
The most natural and primary function of the EGE is to manage the Balanced Scorecard. This entails several other responsibilities, such as facilitating and conducting the annual strategy review meeting, translating the updated strategy into dashboards and strategic objectives. Even if there are no significant changes to the strategy at the time of review, the EGE must lead the discussion on Key Performance Indicators (KPIs) and their measures during the meeting. Once the objectives and indicators are approved for the following year, it is the EGE's role to guide the Senior Management executives in setting targets and identifying the strategic initiatives that will be necessary to achieve those targets.
Furthermore, throughout the year, the EGE should propose in-company courses and training on the BSC management model, being recognized as the knowledge center for the methodology, and serving for guidance, training, courses, events, and, most importantly, to assist local leaders with the tools that support the methodology.
An important point is that the EGE does not need to take on the responsibility of collecting the results from each area. During the process of defining goals and indicators for each sector, it is also determined who will be responsible for producing the area's reports and being accountable. What the EGE can do is oversee the data collection and presentation process in order to guide and ensure the validity of the information being shared. Another issue is that the EGE typically chooses the strategic management system to be used by the company, which can range from Excel spreadsheets and presentations to robust software that automates the entire strategy execution. Therefore, the EGE must ensure training and usability of the chosen system so that it functions correctly and guarantees data validity.
2. Organizational Alignment
The Strategic Management Office is responsible for ensuring the entire company's alignment with the business strategy, fostering internal synergy. Alignment brings focus and coordination among the company's activities and projects, which is why it is so important. It is the SGO's function to develop and deploy the BSC at different hierarchical levels of the company, from Senior Management to the “shop floor.”.
Furthermore, the EGE needs to link suppliers, customers, partners, joint ventures, management, and shareholders so that everyone is aligned with the organization's strategy.
3. Strategy Reviews
Monthly management meetings are fundamental to the process of controlling and executing the BSC. They provide the opportunity to review the strategy and make necessary adjustments. During these meetings, learnings are shared and documented, and new actions are proposed.
In addition to leading the meeting, the EGE must brief the CEO before the event on the current challenges identified in the BSC. This briefing will determine the meeting's agenda, always prioritizing the review of strategy over short-term financial issues and “firefighting” actions that insist on appearing on such occasions. The EGE must lead the discussion towards the creation of action plans and monitoring to ensure projects get off the ground.
Just as Senior Management plays an important role in the strategy review and direction process, the EGE can help in preparing board meetings.
4. Strategic Planning
Strategy formulation and its execution are closely connected in a cyclical process. The function of planning business strategy requires the EGE to conduct in-depth internal and external competitive analysis, as well as build scenarios, organize planning meetings, and guide leaders and managers to achieve maximum results.
It is important that the strategy is not a matter dealt with only once a year, and this is where EGE is fundamental. There is no point in having a super well-formulated strategy if it is not communicated to the entire company, tested, revised, and if it does not reflect the reality of the business. Employees need to have the freedom to contact EGE to suggest new actions and solutions. And senior management needs to review the strategy constantly throughout the year, after all, it is nothing more than a hypothesis of cause-and-effect relationship that takes into account internal actions and the expected impact on stakeholders. These hypotheses need to be validated and constantly edited.
5. Communicate the strategy
To truly engage your employees in achieving the organization's global goals, they need to know and interact with the business strategy. At this point, communication is the most powerful tool to use.
Some companies choose to create multiple messages and disseminate them through different media channels. In this case, EGE acts as a coordinator of the campaigns along with the marketing and communication department, reviewing the message and contact frequency to ensure the strategy is being communicated correctly.
If the company opts for simpler communication, especially when beginning to implement the BSC in the organization, the EGE can assume the communication of the strategy to all employees.
It is also the EGE's function to implement a culture of training and development for new employees and to create a knowledge refresh program for long-term employees.
In the next article, we'll discuss four other functions of the Office of Strategic Management. But, we already want to know what you're thinking about this topic. Share your thoughts with us!
