SMO 101: Learn How to Design and Implement a Strategic ...

These dynamic companies transform their core management processes to integrate with strategy execution, by creating a dedicated corporate level office, called ... GetunlimitedaccessOpeninappHomeNotificationsListsStoriesWriteSMO101:LearnHowtoDesignandImplementaStrategicManagementOfficeExecutingstrategytherightwayisnoteveryone’sbusiness.Thereportedfailureratesforstrategyexecutionstandat60%to90%.Astudyoflargeorganizationsin8industrializedcountriesbyBainandCompanyrevealedthat7outof8companiesfailedtoachieveprofitablegrowthfrom1988to1998,andveryfewachievedtheirstrategicobjectivesandtargets.ThereasonforsuchastronomicalfailureratesforStrategyExecutionare,primarily,fragmentedandcumbersomestrategymanagementprocesses.Typically,theStrategicPlanningprocesscommencesbyorganizingaone-totwo-dayretreatatanoff-sitelocation,andconcludesafterperformingaSWOTanalysis,comparingnumberswithpreviousyear’sperformance,andreviewingthechangingmarketdynamics.Specificunitsdrafttheirownannualstrategicplans,whicharerarelycommunicatedwiththeotherunits.Forinstance,theFinancedepartment’sannualbudgetingistypicallynotlinkedtostrategicpriorities.Thereislackofalignmentbetweenthedifferentunits.Seniorleadershipspendstoolittleatime(somespendzerohours)oncorporateandbusinessunits’strategydiscussionspermonth.Theyaremostlyengrossedintacticalissuesandfire-fighting.Tomanagesuchhighfailurerates,manyorganizationshaveexperimentedwithutilizingtheBalancedScorecardasthefocusoftheirstrategymanagementapproachandaligningtheircriticalmanagementprocesses.Thesedynamiccompaniestransformtheircoremanagementprocessestointegratewithstrategyexecution,bycreatingadedicatedcorporateleveloffice,calledtheStrategyManagementOffice(SMO).Thelinemanagersandemployeeshavetheultimateresponsibilitytoimplementstrategy,however,SMO—asacentralcommandandcoordinationcenter—ensuresthatstrategyisneitherskippedfromkeyprocessesnortheprocessesareineffectualacrossthedifferentbusinessunits.TheSMOandseniormanagementinterpretthestrategyintoaBalancedScorecard(BSC),assistbusinessunitsincreatingtheirspecificscorecards,andaligningthosewiththecorporateobjectives.TheOfficegathersdataandoutlinesreportingprocessesfortheBSC,sharesthenewstrategyacrosstheboard,andkeepsthetopmanagementupdatedonanyissues(revealedbythescorecard)necessitatingaction.ToeffectivelyimplementtheBSC,theStrategyManagementOfficeshouldlead9keyStrategyManagementProcessesunder3distinctprocessgroups:CoreProcessesDesirableSMOProcessesIntegrativeProcessesLet’stakeadeeperlookatthe3processgroupsandthe9processesunderthem.CoreProcessesTheSMOisresponsibleformanagingthecoreprocessesasitisthenaturalownerfortheBalancedScorecard,andcaninitiatetheseprocesseswithoutinterferingwithotherdepartments’work.TheSMOensuresthatallmanagementprocessesarecohesive,andareinperfectalignmentwiththestrategy.Thecoreprocessesincludethefollowingprocesses:ScorecardManagementOrganizationAlignmentStrategyReviewsTheSMOfacilitatesintranslatingtheupdatedstrategyintothescorecardmapandobjectivesduringtheannualstrategymeeting.TheOfficeguidesthemanagementteaminidentifyingtargetsandstrategicinitiativesrequiredtoachievetargets,holdsperiodictrainingsontheBSCmanagementsystem;andcoachesprojectleadersabouttheBSCtools,terminologies,andmeasurementdefinitions.TheSMOsupervisesthedatacollectionandreportingprocess,selectstheBSCsoftwaresystemtodrawdataautomaticallyfromvariousdatabases,andensurestheintegrityofthereportedBSCdata.TheSMOalsoaidstheorganizationindevelopingaconsistentviewofstrategy,coordinatingbetweencomplexbusinessunits,andcommunicatingtheBSCacrosstheentireorganization.TheSMOalsofacilitatesinundertakingstrategyreviews,evaluatingtheBalancedScorecardperformance,monitoringprogressonplans,andtweakingstrategicinterventions.DesirableProcessesThedesirableSMOprocessesarealreadybeingperformedintheorganizationbytheexistingorganizationalunits.Theseprocessesshouldeventuallybeincorporatedintoacentralorganizationwithstrategicfocus,i.e.,theSMO.ByaugmentingtheroleoftheSMO,thedesirableprocessescanbecomemorecloselylinkedtostrategyexecution.Thethreeprocessesthatfallunderthedesirableprocessesgroupinclude:StrategyPlanningStrategyCommunicationInitiativeManagementThestrategicplanningfunctionperformsexternalandinternalcompetitiveanalysis,conductsscenarioplanning,organizesandrunstheannualstrategymeeting,andeducatestheexecutiveteamonstrategicoptions.Likewise,effectivecommunicationofstrategyandtheBalancedScorecardmeasures,targets,andinitiativestoallemployeesisvitalfortheircontributiontothestrategy.TheSMOshouldserveinacoordinatingrole—reviewingthecontentandfrequencyofmessagestoensurethesecorrectlycommunicatethestrategy—asatrainertoensurethatsufficientknowledgeofBSCisincludedinemployeeeducationprograms,andhelpincraftingthestrategymessagedeliveredbytheCEO.Duringtheyear,theSMOneedstomonitorallstrategicinitiativestoensurethattheyarebeingactivelymanaged.IntegrativeProcessesExistingdepartmentsretaintheprimeresponsibilityfortheintegrativeprocessessoastobenefitfromthedisciplineknowledgeandprofessionalexpertiseoftheconcerneddepartment.TheSMOensuresthealignmentofthesecriticalprocesseswiththestrategy.Theprocessesthatfallundertheintegrativeprocessesgroupinclude:Planning&BudgetingWorkforceAlignmentBestPracticeSharingWithoutadedicatedSMO,functionalplansaretoonarrowandtactical,makingitdifficultforanintegratedstrategytobeexecuted.Theofficeshouldcoordinatewiththefinanceunittoensurethatbudgettargetsareconsistentwiththosesetduringthestrategicplanningprocess,andthatthefinancialplansandbudgetsincorporatefundingandpersonnelresourcesforstrategicinitiatives.Similarly,theSMOhelpsinaugmentingthehumancapitalprocessesandlinkingemployeedevelopmenttostrategy.Likewise,theSMOshouldfacilitatetheidentificationandcommunicationofbestpracticesandideasacrossdepartmental,functional,andbusinessunitboundaries.StrategicManagementOffice(SMO)ImplementationFororganizationsaspiringtoimplementtheSMOshouldfocusonthefollowing2keyaspects:TransformingtheOrganizationalModelFulfillingResourceRequirementsTransformingtheOrganizationalModelThereare4differentorganizationalmodelsthathavebeenfoundtobeworkingatorganizationsstrivingtoimplementthestrategymanagementoffice,including:DirecttoCEODirecttoCFO(withdirectaccesstoCEO)IndirecttoCEO(minus1level)IndirecttoCEO(minus2levels)FulfillingResourceRequirementsInevaluatingSMOresourcingrequirements,takealookattheslidebelow,whichmapsthe9StrategyManagementProcessestotheirrespectiveSMOroles.InterestedingainingmoreunderstandingonhowtoeffectivelyexecutetheStrategyManagementOffice?OntheFlevymarketplace,wehaveaseriesof3editablePowerPointpresentationsontheSMO:StrategicManagementOffice(SMO)PrimerStrategyManagementProcessesStrategicManagementOffice(SMO)ImplementationDoYouFindValueinThisFramework?Youcandownloadin-depthpresentationsonthisandhundredsofsimilarbusinessframeworksfromtheFlevyProLibrary.FlevyProistrustedandutilizedby1000sofmanagementconsultantsandcorporateexecutives.Here’swhatsomehavetosay:“MyFlevyProsubscriptionprovidesmewiththemostpopularframeworksanddecksindemandintoday’smarket.Theynotonlyaugmentmyexistingconsultingandcoachingofferingsanddelivery,butalsokeepmeabreastofthelatesttrends,inspirenewproductsandserviceofferingsformypractice,andeducatemeinafractionofthetimeandmoneyofothersolutions.IstronglyrecommendFlevyProtoanyconsultantseriousaboutsuccess.”–BillBranson,FounderatStrategicBusinessArchitects“Asanichestrategicconsultingfirm,FlevyandFlevyProframeworksanddocumentsareanon-goingreferencetohelpusstructureourfindingsandrecommendationstoourclientsaswellasimprovetheirclarity,strength,andvisualpower.Forus,itisaninvaluableresourcetoincreaseourimpactandvalue.”–DavidColoma,ConsultingAreaManageratCynertiaConsulting“Asasmallbusinessowner,theresourcematerialavailablefromFlevyProhasproventobeinvaluable.Theabilitytosearchformaterialondemandbasedourprojecteventsandclientrequirementswasgreatformeandprovedverybeneficialtomyclients.Importantly,beingabletoeasilyeditandtailorthematerialforspecificpurposeshelpedustomakepresentations,knowledgesharing,andtoolkitdevelopment,whichformedpartoftheoverallprogramcollateral.WhileFlevyProcontainsresourcematerialthatanyconsultancy,projectordeliveryfirmmusthave,itisanessentialpartofasmallfirmorindependentconsultant’stoolbox.”–MichaelDuff,ManagingDirectoratChangeStrategy(UK)“FlevyProhasbeenabrilliantresourceforme,asanindependentgrowthconsultant,toaccessavastknowledgebankofpresentationstosupportmyworkwithclients.IntermsofRoI,thevalueIreceivedfromtheveryfirstpresentationIdownloadedpaidformysubscriptionmanytimesover!Thequalityofthedecksavailableallowsmetopunchwayabovemyweight—it’slikehavingtheresourcesofaBig4consultancyatyourfingertipsatamicroscopicfractionoftheoverhead.”–RoderickCameron,FoundingPartneratSGFELtd“Severaltimesamonth,IbrowseFlevyProforpresentationsrelevanttothejobchallengeIhave(Iamaconsultant).Whenthesubjectrequiresit,IexplorefurtherandbuyfromtheFlevyMarketplace.Onalloccasions,Ireadthem,analyzethem.Itakethemostrelevantandapplicableideasformywork;and,ofcourse,allthistranslatestomyandmyclients’benefits.”–OmarHernánMontesParra,CEOatQuantumSFEMorefromMarkBridgesFollowIblogaboutvariousmanagementframeworks,fromStrategicPlanningtoDigitalTransformationtoChangeManagement.https://flevy.comLovepodcastsoraudiobooks?Learnonthegowithournewapp.TryKnowableRecommendedfromMediumWilliamLiaoListenfirstP.LeeSpearsFivestepstomastertheartofcaringleadershipWernickeandBrocáTheonedayofnurse’slifeTilHarderinAnIdea(byIngeniousPiece)Expectingtheunexpected!HarrySeitzAngelofDeath:TheFateofEmploymentAndrésFelipeRoperoSantiagoWhenIwantedtobeaprofessorShareholdTeaminShareholdWhyBCWPrioritizesInclusionOverBelongingMukundarajanVNinTheDailyCuppaHowToViewtheWorkWeDoforaLivingAboutHelpTermsPrivacyGettheMediumappGetstartedMarkBridges347FollowersIblogaboutvariousmanagementframeworks,fromStrategicPlanningtoDigitalTransformationtoChangeManagement.https://flevy.comFollowHelpStatusWritersBlogCareersPrivacyTermsAboutKnowable