Tuesday, May 27, 2014

Is Strategic Management a Process or a System

Strategic thinking is the system thinking in the new boxes whereas strategic planning, is process of thinking within the business model and the system to embrace digital ecological value. 

Digital means change, the speed of change is accelerated, however, it doesn’t mean businesses do not need strategic planning anymore; on the opposite, strategy may become the very core of management discipline than ever in order to adapt to the digital dynamic; and strategy-execution is no longer the linear scenario with sequential steps, but a cascading business continuum cycle. So from system thinking perspective, is strategic management only a "process" within the system, or is strategic management a system?

 Strategic thinking vs. strategic planning: Sometimes the strategic practitioners or theorists have wrongly assumed that strategic thinking, strategic planning are synonymous or interchangeable, at least in best practice, though they are interrelated and complementary thought processes that must sustain and support one another for effective strategic management. Strategic thinking is specified as being conceptual, systems-oriented, directional, linking the future with the past and opportunistic. It deals with "discovering novel, rewriting the rules of the competitive game"  whereas strategic planning deals with horizontal scanning environmental and social monitoring, distributed sensing capability, and knowing what to look for, how to set guidelines, when to make choices, and it is a natural extension of scenario planning. Most systems share common characteristics (supplied by Wikipedia), including: 
-Systems have structure, defined by components and their composition; 
-Systems have behavior, which involves inputs, processing and outputs of material, energy, information, or data; 
-Systems have interconnectivity: the various parts of a system have functional as well as structural relationships between each other. 
-Systems may have some functions or groups of functions 

When design a strategy, you need to apply system thinking principles; standing back and looking at the bigger picture, or get out of box in order to look through and look beyond the box. This has always been a rewarding approach. In systems thinking, typically processes fall within the system, part of systems engineering, and basically the interactions and critical path that defines the "system." Applying system thinking principles to strategic planning does not change the fact that the original and evolving thinking, over the strategies life time, are inextricably linked to standing back observing and understanding the system at any point in time. And that is also a process ‘outside’ the system!

Strategy management needs to embrace the digital cognitive ecological values. At the heart of the both system and process distinctions is people being empowered to grow in creative intelligence throughout their lives. For that emergent theory to be birthed, the old command and control of work production in systems thinking process is being redirected toward new digital cognitive ecological values currently arising in the breakdowns of traditional industrial era we are encountering. In the future, strategic management is real living skin in the games created where mistakes, failed launches are learning events in growing sustainable balance. The disparity in leading and following is collaborative cooperation where "trickle down" has ended and it's "trickle up" from the grass roots to building a new future together. 

Therefore, strategic management is both system and process, where strategic thinking is the system thinking in the new boxes whereas strategic planning and execution within which risk management aligns planning with execution, are the process of thinking within the business model.


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