Strategic work also needs a structure (or rules) so that arbitrary changes are not made by arbitrary people in the company. The recognized structure for this are multi-year strategic cycles. In these cycles, phases of strategic planning alternate with phases of implementing the plan – strategic management.
Strategic planning refers to the development and elaboration of a strategy. After a detailed analysis, this usually includes a vision, a mission, goals and a concrete action plan. The aim is to define the direction of development for the coming years. The planning horizon is usually three to five years. Typically, management develops a strategy for the entire company – one could say the “mother” of strategies. However, this is not necessarily the only level at which such a plan can and must be developed. On the contrary, for individual employees, the corporate strategy can often be perceived as abstract, detached and of little relevance to their own activities. For this reason, it has become good practice for the central business areas, for example individual business units or central functions such as purchasing, sales, production, logistics, HR, etc., to formulate their own strategy. This has the function of a link: it makes it more concrete how the individual business unit wants to serve and contribute to the corporate strategy and is often much more concrete and comprehensible for the employees of this unit.
Strategic management has the task of implementing the corporate strategy and the goals that were worked out in strategic planning with the defined measures and tools in the company. The same applies to the individual business units: all actions and activities should be in line with the unit strategy and ultimately also the corporate strategy. The development of the internal organizational structure is thus just as much a part of strategic management as the design of internal processes and procedures. All processes should be planned and implemented in such a way that they generate the maximum output for the specified goal achievement. A central element of strategic management is always the involvement and leadership of employees: listening, explaining, motivating, supporting – this is what good strategic management does. Good strategic management makes an important difference between a successful and an unsuccessful strategy.