Strategy Controlling
Strategy controlling - is it even possible?
Strategic management in a company is one of the most ambivalent processes ever. Annual strategy meetings on the one hand and the famous Windows-of-Opportunity on the other define strategic actions for many. The strategy process is placed in front of the planning process and thus - so the hope - influences the planning. A real transmission belt for the implementation of the strategy into the planning - no chance. The strategic ad-hoc decisions themselves torpedo the planning directly and find it difficult to find an orderly entry into the forecast.
Looking at the strategic instruments - from portfolio analyses, value chain analyses and experience curve concepts to competitive analyses - the instruments have undergone little substantial change in recent years. The most popular new instrument that analyzes value creation without market forces is the Business Model Canvas.
And finally, the balanced scorecard concept can probably be considered the last systematic attempt at transition to operational management.
The pragmatic approach to integration
If you want to try a meaningful integration that doesn't overtax the organization and the management, it will look like this: The foundation of the process is clarity about the business model. The business model Canvas from Osterwalder, Pigneur, is a very good pragmatic basis here. However, it is important to work out from this model those key performance indicators that indicate the successful implementation of the idea! These KPIs are also suitable for defining limits where the business model no longer works - similar to the warning marks and beacons of nautical navigation!
In the strategy process, all known instruments are used, from Porter's instruments and portfolio analyses to market and SWOT analyses. The analysis and documentation of strategic measures with regard to their impact on these key performance indicators, which are critical to the business model, is an important core point for attention in operational management.
If this change in the KPI is then transferred to operational management - i.e. planning, reporting and bonification - as a guideline, strategic management can finally go hand in hand with operational management.
Functional sub-strategies
In practice, the terms goal and strategy are often mixed and the question of area and functional strategies is often left unanswered. It has proven successful to see strategy as measures to achieve a target state. The measures and instruments include the design of the organization as well as the process design. It is then important to systematically break down the goals in the organization and then derive the functional sub-strategy - e.g. innovation strategy, HR strategy, IT strategy, logistics strategy and finance strategy. On this basis, each of the divisions then develops the target operating model (TOM) and, if necessary, division-specific KPIs and reports.
Summary
Strategy controlling in the sense described combines strategy and operational management via two bridges. The first bridge is the "real" business model-based KPI in the functions that assume the function of target values and guard rails in planning and reporting. The second bridge is tight controlling of measures. Driver-based planning can also make the effects of measures even more transparent.
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