Strategic Management:

Traditional Management Model

Strategic Programming

Traditional Strategic Management Model for Simple and Stable Business Environment

By: Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

"Strategic programming makes sense when the world is expected to hold still or change predictably while the intended strategies unfold, so that formulation can logically precede implementation." ~ Henry Mintzberg

Strategic Management Strategy Implementation Strategic Programming Identification of Mission Setting Objectives

Conditions That Encourage a Strategic Programming Approach to Implementation1

Necessity Conditions

  1. Simplicity

  2. Stability

Motivating Conditions

  1. Industry Maturity

  2. Capital Intensity

  3. Tightly Coupled Operations

  4. External Control

 

 

 Jack Welch's 5 Strategic Questions

Strategy Innovation vs. Strategy Programming

  • In strategic programming, you can realistically separate planning and doing, strategy formulation and implementation.

  • In strategy innovation, you assume that you cannot realistically tell in advance how the future will unfold or what will work, and  therefore intertwine formulations and implementation, continually adjusting your strategy as you gain new insights through an experimental trial-and-error process of learning by doing.9

Strategic Management

Strategy Management

Strategic Planning

Strategy Implementation

Impediments To Strategy Implementation

Strategy Innovation

Strategic Programming Defined

As a leader, you must ensure that your realized strategies are as similar as possible to your deliberate strategies, which, in turn, should be as close as possible to intended strategies.

Strategic programming is planning how your deliberate strategy can best match the realized to the intended strategy.1

 Corporate Strategy: 2 Logics

 Competitive Strategies: 2 Types

 Blue Ocean vs. Red Ocean Strategy

Planning, Programming, and Budgeting System (PPBS)

In the Strategic Programming model, plan development and implementation takes place in a straightforward linear fashion.

  1. Strategy Formulation: based on a preestablished mission and its corresponding goals and objectives, you identify alternative strategies and evaluate them before selecting the preferred option.

     

  2. Strategy Implementation: implement the strategy through a tactics described by a series of increasingly detailed and shorter range plans, programs, and budgets. Each level of plans should have a corresponding level of budgets by which adherence to the plans is enforced.

Strengths of Strategic Programming

  • Strategic programming facilitates communication about strategic issues and achieving integration across organizational levels and functional specialties.

  • Properly done, rational strategic planning provides your entire organization with a road map that greatly facilitates personal individual initiative.

Limitations to Strategic Programming

In the new era of rapid change, organizations are limited as to how heavily they can rely on strategic programming as the cornerstone of their overall strategic management process. Strategic programming is applicable only in certain stable conditions, and these conditions are becoming rare.

There are four types of interrelated and mutually supportive limitations to strategic programming.

  1. Required Conditions:2 strategic programming is most appropriate in organizations facing stable and/or simple conditions.

    • Stability: businesses that operate in a predictably ongoing ways, free from major unexpected shocks, are defined as stable.

    • Simplicity: using strategic programming is most appropriate in businesses that are simple enough to know what the right strategy is before the fact.

    • Industry maturity: in mature markets, changes are gradual and managers have years of experience to draw on.

    • Capital intensity: Heavy investment in capital equipment provides managers an incentive to adhere closely to their intended strategy.

    • Tightly coupled operations: operators in a tightly linked network must adhere precisely to prespecified plans in order to avoid mass confusion.

    • Powerful external control: organizations under tight control by outside forces have a built-in motivation to adhere closely to intended strategies.

  2. Diminishing Viability of Old Mechanistic Organizations and Command-and-Control Approaches:1

    • Externally, global competition is forcing agile competitors to adjust to fragmenting markets that require greater flexibility in adapting to emerging needs, and mechanistic organizations tend to adapt to such changes slowly.

    • Internally, knowledge workers empowered by advances in information technology encourage organizations to get more people involved in planning and decision making so that planning becomes intertwined with doing.

  3. Problems with Strategic Planning: it may be useful in bringing about incremental change within your organization, but it does not promote radical changes in strategic direction or organizational transformation.

References:

  1. "Strategic Management", Third Edition, Alex Miller

  2. "The Rise and Fall of Strategic Planning", Henry Mintzberg