Learn about four other processes that should be conducted and monitored by your company's strategy office
If you use the BSC management methodology in your company but don't yet have a Strategic Management Office (SMO), read the article where we discuss the importance of this department in an organization. Here, we will continue to cover the functions of the SMO. In the previous article, we addressed the following functions: BSC management, promotion of organizational alignment, strategy review, involvement in strategic planning, and communication of all of this to the company. Let's look at the remaining four SMO functions below:
6. Strategic Initiative Management
Strategic initiatives are projects that are typically interdepartmental (or even inter-organizational) that help achieve strategic objectives. The coordination of these initiatives should be led by the Strategic Management Office to ensure they are sufficiently resourced, prioritized, and focused.
Initiatives are typically planned at the annual strategy review meeting, but can arise throughout the year, being evaluated and prioritized as needed and feasible. They may include management programs in the area of Total Quality and investments in Information Technology to improve operations and customer service.
However, the operationalization of initiatives must be distributed according to the expertise and knowledge of each area. The EGE only ensures that the actions are aligned with the strategic planning and critical processes.
7. Budget Planning
All areas that require a specific budget must be deeply connected to the strategy, for example, Human Resources, Marketing, and Information Technology. When there isn't a Strategic Management Office with well-defined functions, there's a risk that functional plans will become too narrow and operational, making it difficult to integrate them with the strategy later on.
Together with the Finance department, the EGE coordinates the budget to ensure that financial goals are consistent with what was established in the strategic plan. In addition, the EGE ensures that each area's budget includes funding for strategic initiatives. In the case of initiatives involving more than one department, they should not be included in either of the individual budgets but have their own separate planning.
8. Workforce Alignment
Setting goals, compensation, and professional and leadership development are procedures closely linked to HR. And all of them are enhanced when linked to strategy. Connecting employee-related processes with strategy should be a shared action between the Human Resources department and the Strategic Management Office. Therefore, individual employee goals, career development, and bonuses are aligned so that strategy execution becomes the core work of each employee.
9. Sharing best practices
Ideas that can improve strategy execution can arise from any area of the company at any time. Many of these ideas can be applied across different departments and units. It is the EGE's role to identify these ideas and share best practices throughout the company, helping creative suggestions overcome departmental and functional barriers.
Typically, companies that implement an ESG have around 10 people working in the area. The goal is to manage strategies and make it a corporate priority, not to build a large new bureaucracy. The secret to the success of this area is to have dedicated people, as it doesn't work to add the work to already busy calendars full of responsibilities.
How is strategy handled at your company? Share your thoughts in the comments!
