Increasingly complex business challenges require organizations to sharpen their strategy management systems, not merely for survival but for sustained success and growth. Setting objectives, examining the competitive landscape, scrutinizing internal organizational aspects, assessing strategies, and ensuring their systematic implementation are integral components of strategic management.
This points out that professionals aspiring to excel in strategic management must cultivate a diverse set of skills and competencies, but are these enough? In an interview with Performance Magazine, Dana AlSaaïd, the Director of Corporate Performance Management for the Ministry of Economy and Planning in Saudi Arabia, emphasizes that analytical thinking and foresight competencies are critical to gaining a competitive advantage in the field. She also believes that professionals must possess a deep understanding of their industry and its operations to anticipate trends, identify opportunities, and make informed decisions.
However, excellence in strategy should not be confined to a single individual. It can manifest through collaborative efforts and diverse perspectives. Dr. Marc Sniukas, a strategy advisor and leadership coach, said in his interview with Performance Magazine, “Strategy is about collective sense-making, forming a shared view of what is going on, what is needed as a response, and how the organization will do that.”
Hence, having a heightened awareness of the organization’s strategy at the individual level is important. As indicated in The KPI Institute’s State of Strategy Management Practice – Global Report 2023, strategy awareness ensures that all stakeholders comprehend the strategic direction, objectives, and initiatives. It empowers employees, team leaders, and managers to “align their actions and decisions with the organization’s strategic goals,” per the report.
Reality presents a different picture. The report indicates that although 44% of participants agreed with the effectiveness of strategic planning practices, a significant segment (17%) still perceived disconnection from business needs. Findings also reveal that executives exhibit the highest level of strategy awareness at 40%, with middle management following at 16%, and lower management and employees each registering at 7%.
Another essential factor in building a shared understanding is effective strategy communication. According to the report, even if a notable percentage of organizations (31%) aspire to communicate the strategy to all levels, a smaller portion (28%) regards strategy communication as primarily focused on decision-makers only.
Leaders must also strive to develop an internal culture that recognizes the value of competence in strategy management. Jeroen Kraaijenbrink, cofounder of Strategy.Inc, stresses the importance of internalizing strategy within an organization rather than outsourcing it to consultants. He argues that organizations should make strategy an integral, systematic, and routinary business process.
Where should professionals looking to expand their skills start? One important move is gaining insight into the business environment and the current capabilities of one’s organization in strategy management to identify the areas that require additional learning. For instance, the report above reveals that a significant number of professionals rate their capabilities in managing key performance indicators (KPI), especially in the selection process, at the lowest level. With this, the report recommends investing in skills development and acquiring knowledge related to KPI selection, a process that ensures the accurate tracking of strategic objectives to build alignment between measurement and strategy.
Just as strategy adapts to disruptive times, individuals striving for success must also evolve. However, this evolution should not be arbitrary. Professionals must direct their efforts strategically to achieve meaningful skill expansion.
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Editor’s Note: This was originally published in Performance Magazine Issue No. 29, 2024 – Strategy Management Edition.
Artificial intelligence (AI) has emerged as a transformative force in corporate strategic management, fundamentally altering the way companies make strategic decisions. AI is crucial in driving innovation even in the face of dynamic business environments and data abundance.
The integration of AI into corporate strategic management offers a myriad of benefits for businesses seeking to navigate the complexities of the modern market, namely:
Data-driven decision-making: AI empowers companies to transform raw data into actionable insights to identify market trends, assess customer preferences, and predict future outcomes more accurately. AI supports data-driven strategy, leading to better resource allocation, risk mitigation, and operational effectiveness. For instance, a company can leverage AI predictive analytics capabilities to forecast future revenue, competitive threats, the likelihood of expansions succeeding, and other core strategic considerations years in advance.
Enhanced strategic planning: AI’s capabilities extend beyond data analysis to encompass strategic planning and scenario modeling. AI-powered tools can simulate tens of thousands of realistic scenarios per minute, allowing companies to evaluate the potential impact of strategic decisions and identify potential risks and opportunities before committing to major investments. Maersk, for example, uses cutting-edge AI algorithms to revolutionize its container shipping operations. These algorithms optimize vessel routes for efficiency, predict equipment maintenance needs to minimize downtime, and provide real-time insights into cargo location and status, ensuring unparalleled transparency and efficiency.
Customer-centric strategies: AI plays a pivotal role in understanding and anticipating customer needs, enabling companies to develop customer-centric strategies that foster long-term customer loyalty and enhance brand reputation. AI-supported tools can analyze customer behavior, preferences, and feedback; thus, AI can provide valuable insights to personalize marketing campaigns, improve product offerings, and optimize customer service experiences. For instance, H&M Group uses AI to create personalized shopping experiences, optimize product offerings, and improve customer satisfaction by analyzing customer data and preferences.
Competitive advantage: AI adoption provides companies with a competitive advantage in a rapidly evolving market. AI-driven strategies enable organizations to adapt quickly to changing market dynamics. By leveraging AI’s capabilities, corporations can outstand competition and establish themselves as leaders in their respective industries. Unilever, for example, leverages a system to analyze sales data, marketing campaigns, economic trends, and weather patterns to predict future demand more accurately. This enables the company to optimize production planning, reduce waste, and improve profitability.
AI Challenges Within Corporate Strategic Management
While AI presents immense opportunities, it is crucial to address the ethical considerations surrounding its implementation, such as the potential for AI to perpetuate biases and discrimination. AI algorithms can be trained on biased data sets, leading to partial decision-making and deeper inequalities. Transparency and accountability are other ethical concerns in AI decision-making as it is important to foster trust and understanding of how decisions are made. This is to ensure that everyone involved can act on a just and well-informed strategy.
Successful AI integration also requires a cultural shift within organizations. Companies need to develop training and educational programs to equip employees with the needed skills and to work with AI systems and capabilities in harmony. This should improve communication and collaboration, leading to better alignment with corporate strategic objectives.
Companies that embrace and adapt AI strategically will be well-positioned to navigate the complexities of the modern market and achieve sustainable competitive advantage. For effective adoption of AI capabilities, companies need to develop transparent and accountable AI systems and establish clear ethical guidelines for AI use. Additionally, companies need to engage in ongoing dialogues with stakeholders to build trust and ensure that AI is used responsibly and ethically.
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Editor’s Note: This article was first published on February 12, 2024 and last updated on September 17, 2024.
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