Business First

The ABCs of Strategic Management
Some thoughts for the practitioner
by Joseph G.P. Paolillo, MBA, Ph.D.

When was the last time that you thought about or actually used the concepts or components of strategic management in your firm, organization or institution? For some of you, it was in your strategic management class during your senior year at Ole Miss, and for others it may have been more recently. Either way, here are some thoughts on strategic management that I hope you will find useful.

The standard definition of strategic management goes something like this: It is the art and science of formulating, implementing and evaluating cross-functional decisions to enable the organization to be successful. A more useful way, in my opinion, is to think of strategic management as decision making on the part of top-level managers with guidance from the board of directors (of course, if there is a board).

Where does this decision making start?

It starts with a vision statement for the organization, firm or institution. A vision statement should answer the simple question, “What do we want to become?” or “What are we shooting for?” Those of you who are familiar with Ole Miss know the Ole Miss vision statement is simply “Committed to becoming a great American public university.” Another example of a vision statement is from Nike, “To bring inspiration and innovation to every athlete in the world.”

The next step in this strategic management decision-making process is the mission statement. The mission statement simply states what business the firm or organization is in. Ole Miss, for example, is in the business of creating and disseminating knowledge through research and teaching. Another example of an appropriate mission statement comes from Callaway Golf Company (CGC). “CGC is driven to be a world-class organization that designs, develops and delivers demonstrably superior and pleasing golf products that incorporate breakthrough technologies.”

The strategy statement is developed from a clear understanding of both the vision and mission statements and contains the following components: the products, goods and services (PGS) offered by the firm or organization; the customer and geographic markets or market segments where the PGS are to be offered; the distribution channels that will be utilized to bring the PGS to the various markets; a clear understanding of how the firm will be financed or capitalized; and finally a clear identification of what differentiates this organization from its competitors and what leads to a competitive advantage over the known and unknown competitors.

However, the real key to success for any organization is how well the strategy is implemented in the competitive environment. It is the leadership and motivation of the organization’s people, who are the most important resources in the organization, that determine whether an organization is successful or not. Therefore, keep this in mind: Live by the golden rule in all facets of your life, especially at work. This simple rule will help make you a success.