Analysts on Strategy Management

Readers of this blog will know that I have a deep affinity for a portion of Performance Management that has come to be known as Strategy Management.  The most obvious explanation for my passion is the fact that I ran a company often cited as pushing the envelope in strategy management.  However, I’ve also always felt that the concept of strategy management was largely misunderstood – often relegated to the display of a few metrics on a dashboard – and, as such, the potentially profound impact on an organization’s performance is usually squandered.

 

Since people misunderstand strategy management, they often equate performance management to better budgeting and planning.  The confusion is rampant and, until recently, was exacerbated by the market analysts.  Some firms, notably Ventana Research, have encouraged the use of strategy management for several years.  However IDC helped the industry take a huge step forward by using the term “Financial Planning and Strategy Management (FPSM)” to refer to the category and including strategy management in their market sizing.  But I was particularly pleased to see Gartner emphasize strategy management in this year’s preparation for the magic quadrant.  An abbreviated version of their description is as follows:

Strategy management applications provide a packaged approach to support strategic planning, modeling and monitoring to improve corporate performance, accelerate management decision making and facilitate collaboration. These solutions are usually tied to strategy maps or methodologies, such as the balanced scorecard. Strategy management comprises:

·         Strategic planning

·         Initiative/goal management

·         Scorecards and strategy maps

·         Dashboards (or cockpits)

 

CPM suites should at the very least provide dashboard capabilities to help display performance information in a way that is easily understood by users. However, more sophisticated organizations are implementing strategy maps (linked frameworks of KPIs) using scorecard software to link CPM to other aspects of performance management. Strategy Management is therefore becoming an increasingly important aspect of CPM suites [emphasis added].

 

I can certainly still quibble with their definition, as I think they are missing the fact that strategy management is not just about helping organizations develop the strategy and make better decisions based on the strategy but also for every employee to better understand the strategy and how they can impact it.  In particular, without sophisticated techniques for cascading strategy has the tendency to be trapped in the executive suite.  But the point is that Gartner, and many others, have begun to realize the importance of strategy management in improving an organization’s performance.

 

I don’t want to be guilty of irrational exuberance but maybe I’ll never have to write another post complaining that the market isn’t changing.

4 Responses to Analysts on Strategy Management

  1. Chris Clay says:

    Excellent blog! I absolutely agree that it is refreshing to see the increased awareness around COMPHREHENSIVE strategy management as a core component within any effective CPM/EPM suite. It is also noteworthy that in the latest release of Gartner’s Hype Cycle for Performance Management (which tracks the progression from inception to main stream acceptance of PM applications) Strategy Management was shown to be one of the applications very close to achieving mainstream acceptance. This is yet another sign that analysts AND organizations are rapidly recognizing and leveraging the value of effective strategy management.

  2. Rodney Brim says:

    Helpful observation on the changes in Analysist’s framework. I was struck in your last paragraph that strategy management, as defined by Garnter, is essentially executive in nature, if not financial in nature. You write that they are “missing the fact…” and I wonder if all of us, including myself , that wish reality were as you write, strategy management for the organization, not just the executive branch… are missing the fact.

    I think that as much as Strategy Management progresses in recognition, as long as it stays in the executive branch, it really doesn’t progress much, certainly not beyond the obstacles that take it from a reporting tool for executives to a organizational management tool. It would be interesting to see what the definition of strategy management from an organizational perspective would look like from a Garntner type group.

    Rodney Brim
    http://www.managepro.com/blog/index.php/category/strategy-execution

  3. Jonathan says:

    Chris: Thanks for the kind words but I’m not sure I’m ready to agree that Strategy Management is close to mainstream acceptance. This issue is actually captured in Rodney’s comment. Too often, Strategy Management is still limited to executives. To reach its full potential, it has to be focused on the entire organization.
    As a simple example, many organization still treat their strategy map as a secret that can’t be shown to employees, let alone to external audiences. (more in a later post) How can objectives be a secret? I would argue that even KPIs (their definitions, if not their actual values) should be freely available.
    While I know of several organizations with 1000+ active users of a strategy management tool, they are still the exception rather than the rule.

  4. […] critical assessment of the current market suggests that things have improved.  Most people acknowledge that performance management extends beyond budgeting to strategy management, profitability […]

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