Creating a Successful Office of Strategy Management: Roles & Evolution
Implement an Office of Strategy Management in your company and remarkably improve your strategy implementation and competitive advantage. Here we will review the OSM’s main roles, responsibilities and structure, and how these change as the OSM matures.
Why is there such a big gap between visionary planning and tangible results? Is it a lack of communication between those responsible for designing the corporate strategy and processes and those in charge of executing them?
Take a look at these facts:
- 95% of employees say they do not know or understand their company’s strategy.
- 67% of HR and IT departments are not aligned with corporate strategy.
- In 90% of cases, “frontline” employee compensation has no link whatsoever to the corporate strategy’s success or failure.
So, how do we close the gap between planning and execution? The answer is simple: by creating the Office of Strategy Management, responsible for communicating the strategy design to the rest of the organization.
Drs. Kaplan and Norton recommend establishing an Office of Strategy Management as a way for enterprises to close the gap between strategy development and implementation, as it gathers the people responsible for designing the strategy with the people responsible for executing it. Taking advantage of this mechanism remarkably improves the chances for a successful strategy implementation, thereby solidifying the company’s position and giving it a clear advantage over its competitors.
According to best practices, the Office of Strategy Management should have 7 main roles:
1. Lead the strategy design
It helps the executive team design the strategy administration system by selecting the objectives the organization needs to focus on, the indicators that it needs to measure performance, the targets to be pursued and the initiatives that will be needed to achieve the desired performance.
The Office of Strategy Management is also responsible for gathering the necessary data and establishing a common data recollection system for every area, therefore ensuring that it has access to updated information at all times.
2. Align the Organization
It ensures that all support and operation areas are correctly aligned with the corporate strategy to guarantee that they are all working towards a common objective.
It should guarantee that all objectives, indicators and targets are aligned to the corporate strategy. This way it can help identify and consolidate synergies among the distinct departments and business units.
3. Communicate the Strategy
One of the Office of Strategy Management’s most important roles is to communicate the strategy and its progress. It is responsible for having everybody in the organization fully understand the strategy. In many organizations, this function is delegated to the Internal Corporate Communication Department. However, this department does not usually have the necessary capabilities or information to adequately communicate and transmit the strategy’s evolution to the rest of the organization.
In order to communicate the strategy correctly, the Office of Strategy Management may choose to employ means such as corporate releases, messages from the CEO and employee training. Furthermore, by coordinating its efforts with the HR department, it can ensure that information regarding the strategy’s management and progress is included in the employees’ continuous development courses.
4. Monitor the Strategy
It organizes and leads the Strategic Review Meetings during which executives analyze the strategy execution’s performance and the outcomes that it generates for the company. It also documents the agreements and adjustments approved during the meetings for their follow-up.
We recommend having the Office of Strategy Management send the executive team the meeting agenda two weeks in advance, allowing them sufficient time to prepare the necessary supporting documents.
5. Adjust the Strategy
It regularly collects and evaluates new ideas (changes to the Strategy Map, indicators, targets, formulas, etc.) throughout the organization and discusses their implementation with the executive team.
We recommend performing an annual revision to the strategy, as it is a hypothesis that must be continuously tested to prove its validity. The Office of Strategy Management is responsible for leading such revision meetings.
6. Ensure the Execution of Strategic Initiatives
It acts as a liaison among the distinct areas to ensure that the initiatives receive the necessary resources and attention for their completion.
It can furthermore coordinate its efforts with other areas or management tools to guarantee the initiatives’ correct definition and execution.
7. Serve as a Facilitator Area for Support Units
The Office of Strategy Management is also responsible for making sure that the Support Units are aligned to the strategy. It collaborates with the Finance department to make sure that the budget contemplates the necessary resources to execute the company’s strategic initiatives. It also oversees the HR department to make sure that the employee compensation schemes and evaluation systems are aligned to the corporate strategy and their personal strategic objectives.
How big should the Office of Strategy Management’s structure be?
The number of personnel an Office of Strategy Management needs depends on the number of full time staff that the organization wishes to commit to strategy management. However, the average size oscillates between 5 and 10 full-time employees.
Who should the Office of Strategy Management report to?
In order to have enough authority to commandeer the strategy across departments and functions, the Office of Strategy Management has to report directly to the CEO. Not having the required level of authority may be a sign that the CEO does not see the strategy implementation as key for the organization’s future, or does not wish to commit the resources needed for its success.
The evolution of the Office of Strategy Management
As the Office of Strategy Management matures within the organizations, its roles and responsibilities increase over time, passing through three phases:
- Basic Strategy Management Functions
- Integrative and Administrative Functions
- Coordinating Interrelated Business Functions
During the first phase, the Office of Strategy Management works with the basics of strategy management: monitoring the strategy management system and functioning as the internal strategy owner (developing, communicating and monitoring the strategy) by using maps, indicator scoreboards and related items. They are responsible for aligning the organization as well as validating and managing initiatives and projects.
In the next phase, the Office of Strategy Management is also responsible for the strategy’s basic administration. In other words, in this stage it collaborates with Support Units (HR, Finance, IT, etc.) to ensure that the right mix of resources are being committed the strategy’s execution. Linking the strategy to the operation usually requires for the Office of Strategy Management staff to gain experience in the design and innovation processes, while focusing on quality management.
Once the Office of Strategy Management masters its second phase, it begins to play a larger role in the company, with the result being interrelated business functions. Special responsibilities such as risk management, project management, innovation, and financial control are assigned to the Office of Strategy Management which has, by then, proved essential for the company’s development. Its purpose is to manage and integrate these specific functions as they are crucial for the strategy’s development.
We recommend setting a growth plan in place to support the Office’s growth over a three-year or longer period. Making the Office of Strategy Management a continuous element within the company is important to successfully monitor the strategy’s execution.
How to create an Office of Strategy Management for your company
Despite the importance of keeping track of the company strategy, studies show that 85% of executives spend less than one hour per month discussing strategy.
¿How much are you investing in yours?
At TRISSA we can help you establish a comprehensive system to easily monitor your strategy. We can help you create and polish your Office of Strategy Management, as well as the underlying infrastructure it needs in order to orchestrate the company’s most important functions according to international best practices.
So go ahead, browse our webpage and get to know us better: www.trissaconsulting.com/en
Or send us an e-mail; our consultants would be delighted to answer any questions you may have: firstname.lastname@example.org
Author: Trissa Strategy Consulting
Kaplan, Robert S. and David P. Norton. "The Office of Strategy Management." Harvard Business Review (2005): 1-12. Online journal.
Norton, David P. and Randal H. Russell. "The Office of Strategy Management - The State of the Art." Balanced Scorecard Report (2011): 1-6. Online journal.